How to Estimate Building Materials for Home Construction: A Helpful Guide

One of the most difficult things for industry professionals and homeowners-to-be is getting an accurate estimate of how much house-building materials will cost. For industry professionals, getting an accurate figure of home-building materials allows them to create and deliver accurate materials estimates for building a house. This will enable them to work faster and secure jobs more easily, as clients ask for estimates during their initial consultation meeting.

For the consumer, having an accurate picture of the cost of home-building materials allows them to make the best financial decision possible for their circumstances. It also gives them a more complete picture of how to estimate building materials for home construction — allowing them to see where their money goes more in-depth.

But if you’ve ever wondered how house-building materials are costed, here’s your chance to learn. It will help you avoid some of the top mistakes in home construction. First, we’ll start with the basics.

What is a Materials Estimate?

A materials estimate, otherwise known as a materials takeoff, is the process of estimating the materials needed for a building project and can vary greatly depending on the size of the house being built and the types of materials needed.

Some construction professionals will use a laser tape measure to get accurate readings of the measurements of a room by square metres. If working with an architect, others will take the architectural square metre calculations as the basic materials estimate for building a house. These figures are almost always rounded up to the next metre and then multiplied together (LxW), to give the square metres of an area.

Afterwards, most contractors will apply a ‘ten-percent’ rule to the overall cost of materials to allow for waste. There are four different types of materials estimates for construction house building materials.

Different Types of Materials Estimates

Preliminary Estimate

This is the first stage of any estimating process, known as a preliminary estimate. This estimate can be completed before home design documents are drawn up and is based solely on the contractor’s previous experience of home building materials for a house of similar size. Preliminary estimates are always prepared with the expectation of a more detailed assessment being provided before work can begin.

Detailed Estimate

The second type of estimate is a detailed estimate. As the name implies, a detailed estimate is a breakdown of the cost of materials and labour that the contractor must pay to complete the job. Contractors will typically hire a materials cost estimator to complete this part of the estimation for a project, who will work closely with an architect to give a complete picture of the cost of materials and labour for a contractor.

At this stage, many contractors will decide whether or not a job is worth their time and money, as they have an estimate of the labour costs to their company. This detailed estimate is provided by the materials cost estimator only to the company, not their client.

Quantity Cost Estimate

Next, we have the quantity cost estimate. This estimate is based on drawings produced by an architect that indicate the square metres of a particular custom house. This is then broken down and simplified by each room and the required amount of home-building materials and labour required to complete each room.

For example, a carpenter will provide a quantity cost estimate for the number of pieces of timber required to frame a specific room in the house, that is, specific square metres, based on architectural drawings and the cost of materials plus the required labour.

This quantity estimate will also be kept internally, used only by the contractor to give them an idea of what it will cost him in materials and labour to complete a project. The contractor may use a digital takeoff tool to gain this information instead of manually working out how much it costs per square metre of roofing material (if the job is roofing a house). This will typically be aided by digital software that includes a building materials calculator.

Bid Cost Estimate

The ‘bid cost’ is what the prospective client of the contractor sees. This ‘bid cost’ will include the contractor’s costs for the project, including the cost of materials needed to build a house, the markup needed for the contractor to make a profit, and the cost of the labour for the contractor and other contingencies.

This bid cost estimate is what most clients will base their bid decisions on and what will be used as a template for costs to the client as the project moves forward. For example, some home designs may offer the same square metres as the next house but be built with more expensive or cheaper materials, providing the homeowners-to-be with different bid cost estimates.

Control Cost Estimate

The control cost estimate is utilised during the project to monitor cost changes as the project progresses. This can account for changes to the customer’s wishes regarding the project completion timeframe or changes in materials. The control cost estimate is a key part of calculating the cost of building materials. It is a good demonstration tool for contractors to use when customers change their minds about using a specific material and how that affects the cost of the overall project.

Traditional Way of Estimating

There are four parts to the traditional way of building a materials estimate for house construction.

Firstly, you’ll want to list all the materials needed to complete the job. Depending on what you do as a contractor, this list could be long or short. For example, a carpenter will list every piece of timber they need, estimates how many screws or nails they’ll need, how many drillbits and how much power they need to run their tools, etc.

These materials costs will then be added together, plus an estimate of labour costs. After that, a 10 to 15% charge will be added for waste and productivity loss time (rainy days for roofers, material shortages, delivery delays, etc.).

The traditional way of estimating a house construction cost calculation may have worked when one tradie was the only name in town, so people had no choice but to wait a few days or even longer for him to come up with an estimate. But nowadays, customers have much more choice in who they go with, and if they’re faster at estimating their costs than you are, you’ll lose the bid!
 This is why artificial intelligence and software have replaced traditional estimating methods to provide much faster and more accurately estimates. This saves time for both the contractor and their potential client.

The Basic Estimates of Home Construction

During bidding for any home construction project, a few basic estimates are provided to enable contractors to calculate the materials needed to build a house. These include material and labour costs and a 10-15% addition to the overall estimate for waste and productivity loss.

Home construction estimates are calculated by estimators based on the square metres provided by an architectural drawing and the prospective labour costs to the contractor to pay their employees, as well as profit made on his construction material costs.

Methods to Improve How You Estimate Building Materials

When it comes to how to estimate materials for a house, speed, accuracy and pricing are your main components. From the moment you get a call about an estimate from a client, you are on the clock because you’re not the only game in town. Although, you shouldn’t compromise accuracy for speed.

Conducting a materials estimate for building a house needs to be done as accurately as possible, bearing in mind your pricing – standardised pricing given to each client per square metre of their desired home, with more detailed pricing based on the client’s specified desires. For example, an oak hardwood dining room floor will cost considerably more than vinyl or laminate flooring.

But if you notice that you’re not winning bids for projects that you think you should have or that clients are frowning at a specific cost listed in an estimate, maybe your estimating itself needs to improve. Here are three methods to improve your estimates and win more bids!

Use Technology to Your Advantage

Maybe you’re an old-school contractor who does everything by tape measure and/or laser level but refuses to rely on any technology to do their estimates, minus the humble calculator. While it may work for certain things, sometimes your costs could be way off because you made a human error when measuring, or you underestimated how long it would take your team to frame a room or didn’t account for a week’s worth of rain and an incomplete roof in your ‘production loss’ percentage.

Using artificial intelligence to read a digital takeoff and make precise estimates based on that eliminates the possibility of human error impacting the final figures. Aside from the accuracy of the numbers, deploying digital estimating technology could provide you with an estimate in minutes and hours, rather than the days or weeks it may take manually.

Get Your Subcontractors Sorted Out Early

Once you know what a customer wants, ensure you line up which subcontractors you want to use for specific parts of the job and ask them for a Request for Information (an estimate of their price for a certain job) as soon as possible. Give them a due date for the RFI and stick to it. That way, you’re not losing time by waiting for replies from subcontractors who aren’t replying within the allotted timeframe and wasting your time and the prospective clients’ time.

Know Your Numbers

This is a part of figuring out your pricing beforehand, but you need to know your numbers and memorise them constantly. That way, if a client calls and asks for a price on a room – you can offer them “X per square metre” and then offer to come over and take some measurements. Knowing your price per square metre (updating that when necessary to keep up with inflation and cost of material increases) will help set you apart from the competition, who may take more time than you to respond to the client.

Digital vs. Manual Estimate
 When making estimates, digital estimation tools for materials needed to build a house are becoming more accurate, saving cost estimators and construction companies time and money. Digital estimation tools feature automated equations and formulas to provide accurate calculations that are extremely challenging for a person to do manually.

Digital estimation tools also now store all of the information in the cloud and are linked to a company’s construction software, allowing instantaneous access to information both in the office and on the job. This means that estimates can be updated in real-time.

On the other hand, manual estimates take much more time to put together and are prone to human error and sometimes even guesswork (such as labour costs). This can lead to human errors made in calculations that can have disastrous consequences later on the projection, such as overestimation, or worse, underestimation of materials and then having to order more, at the cost of time on the project.

Regardless of the size and scope of your project, having a way to accurately and quickly provide estimates to your potential clients will only benefit your prospective clients. Who will likely be impressed by the speed of your response and the accuracy of your estimate, meaning there’s little to no surprise for them.

If you’ve been racking your brains to figure out why your estimates are veering off into more waste than you bargained for, consider using technology when conducting a materials estimate for home construction. Contact Provincial Homes today to see if we can provide you with an estimate for your home construction project!