How to Price a Remodeling Job (Proposal Example Included)

Remodeling is the hardest work in construction to price, because you're bidding on two jobs at once: the one on the drawings, and the one hiding behind the drywall. New construction starts from a clean slate; a remodel starts from whatever the last three owners did to the house. Pricing it well isn't about guessing better. It's about structuring the number so the knowns are priced tightly, the unknowns are named, and the customer approved both before demo day.

This guide walks through that structure: the phase-by-phase takeoff, sub quotes, allowances for finishes the customer hasn't picked yet, a contingency that isn't padding, and the markup arithmetic that decides whether the job feeds the business or just the crew. For the universal quoting basics, see how to make a quote for a job; this is the remodel-specific layer.

Price by phase, never by square foot

Per-square-foot rules of thumb are how remodels end up underwater, because the expensive parts of a remodel don't scale with area; they scale with what's being moved. Break the job into the phases the work will actually follow, and price each:

• Demolition: what comes out, containment (dust barriers matter in an occupied house), bin rental, and dump fees.
• Structural and framing: any walls moved or opened, headers, blocking.
• Rough-ins: plumbing, electrical, and HVAC changes, usually subbed, priced from real quotes.
• Closing up: insulation, drywall, taping, priming.
• Finishes: tile, flooring, cabinets, counters, paint, fixtures, trim. This is where the money and the customer decisions concentrate.
• Project management: your time scheduling subs, ordering, inspecting, and talking to the customer. It's real labour; give it a line in your costing even if it's blended into rates on the customer copy.

Subs: real quotes plus a coordination markup

Never carry a sub trade at a guessed number. Get the plumber's and electrician's actual quotes for this scope, then mark them up 10 to 20 percent. The markup isn't profit-taking on someone else's work; it pays for the risk and labour of coordinating them, warranty-backing them, and rebooking them when demo reveals the drain stack is cast iron and the schedule slips a week. A remodeler who passes sub quotes through at cost is running a free general-contracting service on top of their own trade.

Allowances: price the decisions the customer hasn't made

Remodels stall on finishes, because customers pick tile slower than crews lay it. Don't let an unmade decision hold the whole price hostage: carry client-selected items as named allowances. “Tile allowance: $8 per square foot, supplied. Vanity and faucet allowance: $1,800.” If they fall in love with the $23 tile, the difference is a documented adjustment, not an argument. Allowances keep the proposal signable today while protecting you from champagne taste discovered in aisle five.

The contingency: name what's behind the wall

Every experienced remodeler prices hidden conditions somehow. The wrong way is silent padding, which makes your bid look expensive and gives the customer nothing in writing. The right way is a visible discovery clause: what kinds of conditions count (rot, mould, knob-and-tube or aluminum wiring, galvanized or cast-iron plumbing, out-of-level framing, asbestos-era materials), and how they're handled: documented, priced, and approved as a change order before the extra work proceeds. On older houses, some remodelers also carry a stated contingency line (5 to 10 percent of the job) that's only billed if used. Either way, the message to the customer is the same: surprises have a process, not a fight.

Markup vs margin: the arithmetic that quietly kills remodelers

If your costs are $20,000 and you add 20 percent markup, the price is $24,000 and your margin is $4,000 ÷ $24,000, which is 16.7 percent, not 20. If overhead runs 10 percent of revenue, that job netted 6.7 percent before anything went wrong. To earna 20 percent margin, divide cost by 0.8: $20,000 ÷ 0.8 = $25,000. Small difference per line, fatal difference per year. Price every remodel with the margin math, apply it to your fully burdened labour cost (wages plus payroll costs, insurance, vehicles, and tools, not the bare hourly wage), and let the phases carry it evenly so no single line looks inflated.

Payments and change orders: structure follows phases

Tie the payment schedule to visible milestones: a deposit to schedule and order materials, a payment at demo and rough-in complete, another at drywall or tile complete, and the balance at the final walkthrough. Milestone payments keep cash flowing through a multi-week job and give the customer a built-in progress report. Then the sentence that protects every remodel: all changes, including allowance overages and discovered conditions, are priced in writing and approved before the work proceeds. On a kitchen or bath, the change orders are not the exception; they're the second half of the job.

A worked example: hall bathroom remodel

Illustrative numbers for a full gut of a 5 × 8 hall bath; your market will move every line:

Notice the two allowances and the discovery clause: the three places a bathroom remodel goes sideways, each with a number or a process attached before the sledgehammer comes out.

The pricing mistakes that sink remodels

• Square-foot pricing. The cost of a remodel lives in what moves, not how big the room is.
• Guessed sub numbers. The plumber's real quote arrives after you've signed a fixed price.
• No allowances. Either you priced finishes the customer hasn't picked, or you're renegotiating in a tile store.
• Silent padding instead of a discovery clause. You look expensive and you're still unprotected.
• Markup mistaken for margin. Twenty percent on paper, sixteen in the bank, six after overhead.

From price to proposal in a minute

The pricing is yours; the document that carries it shouldn't take an evening. ProposalPro turns a short job form into a full remodeling proposal in about a minute: phased scope, allowances, exclusions, a change-order clause, milestone payments, and warranties, in a clean template your customer can accept online. Start from the construction proposal generator, or browse the six finished designs in the template gallery.

However you write it up, the pricing principle doesn't change: tight numbers on what you can see, named numbers on what the customer will choose, and a written process for what nobody can see yet. That's a remodel priced like a business instead of a bet.