Navigating the Maze of Home Renovation Bids: Labor-Only vs. All-Inclusive

Instead of dreaming about your perfect home renovation, take control and turn your vision into reality. Navigating the world of home renovation bids can be overwhelming, but with this guide, you’ll gain the knowledge and confidence to choose the right contractor and secure a fair deal. Let’s dive in and discover the secrets behind home renovation bids.

At Sweeten, we’re experts at all things general contractors — we pre-screen them for our network, carefully select the best ones for your remodeling project, and work closely with hundreds of general contractors every day. So, we’ve tapped our internal expertise to bring you this guide.

Soliciting and comparing bids is a crucial initial step in any home renovation project. One major consideration is budget: how much do you need to spend to achieve your desired results? Many homeowners contemplate labor-only bids as a potential cost-saving strategy. Let’s delve into the pros and cons of both labor-only and all-inclusive bids to help you make an informed decision.

Understanding the difference in home renovation bids

In a labor-only bid, contractors will identify the labor costs associated with various parts of your project. For example, their bids will include line items such as demolition and installation related to various aspects of your project. We’ve included a sample labor-only bid for an apartment kitchen update in a condo building in the box below. This real-life example is of a 125-square-foot kitchen in Brooklyn, where the Sweeten homeowner was changing out many of the finishes in her kitchen but retaining the existing appliances since they were just a couple years old. She also kept the lower cabinets to create a dual-tone look.

Let’s take a look now at an all-inclusive bid for the same kitchen:

Which is right for you?

The bids are very different, but keep in mind the labor-only bid does not include the cost of materials, which you’d still need to account for separately. Let’s break down the difference between the two scenarios.

The truth about material costs

One of the most significant factors contributing to price differences in home renovation bids is the choice of materials, particularly cabinets and countertops. In this example, the new cabinetry costs $5,900 and the quartz countertops come in at $5,400.

It’s worth noting that the labor costs for custom cabinetry installation are typically lower than for modular cabinetry, making the all-inclusive bid more advantageous in this case. Additionally, countertop suppliers often include installation in their quoted price, eliminating the need for separate labor costs in the labor-only bid.

The question remains: can you find better prices than your contractor? General contractors often have established relationships with suppliers and wholesalers, allowing them to obtain materials and parts at discounted rates. While they’ll add a markup for their services, the final cost might be comparable to what you could find on your own.

Another note: If you plan to go with custom cabinets, they will cost more no matter whether you source them from an independent millworker or go through your contractor. Similarly, there are pricing variations on countertops, but they should generally be in the same range.    

How much time do you have for home renovation bids?

Aside from the comparison of the cost of materials, the other major consideration is time. Managing a home renovation can be as time intensive as a job, and labor-only contracts require even more from homeowners in terms of preparation, research, and project coordination than all-inclusive bids. This is because you, as the homeowner, are the de facto project manager, having only delegated part of the job to your contractor. You are still responsible for making decisions on materials, as well as sourcing and coordinating the delivery of all materials to the work site.

Depending on the size of the job, this can get very complicated. Some homeowners have shared that significant delays have resulted due to their own miscalculations or oversight about product delivery lead times. This is why some contractors strongly advise/request you let them handle the ordering and delivery logistics. While an all-inclusive bid does not guarantee that there will be no delays, it’s the contractor’s responsibility in that scenario to ensure that all materials arrive in time for each step in the process. As professionals, they are accustomed to all the steps and what needs to arrive when for the project to be completed on time.

So, while the total price of an all-inclusive bid may look overwhelming at first, it is important to understand what goes into it and assess whether it will save you an enormous amount of time, hassle, and frustration. Centralizing the responsibility with your contractor also makes the process more straightforward. Lastly, to make the decision simple, ask yourself these questions:

*Are you very organized?

*Do you have a lot of time to spend on this renovation project?

*Do you already have very specific ideas about where to source fixtures, tiles, and other materials? (E.g., you already have your eye on those Schoolhouse Electric pendants and have decided on a full IKEA kitchen suite.)

*Are you a designer or have industry connections?

*Is the bottom line the most important thing?

If you answered “yes” to all of these questions, you may be equipped to tackle a labor-only bid. If you answered “no” to any of them, however, an all-inclusive bid is your best bet for a smooth, turnkey home renovation experience.

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Post your project on Sweeten for free and make your dream home a reality. Sweeten puts you in control of your renovation, from finding the perfect contractor and gathering design inspiration, to using cost guides  to plan your budget wisely.