What are Home Improvement Contract Allowances?

March 14, 2014 / by / In

If you are undertaking home remodeling or construction, you must have a clear understanding of what contract allowances mean up front.

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An allowance in your home improvement contract is essentially a budget set aside for particular items or work. Most contractors use allowances for items that the homeowner needs to select, such as plumbing fixtures, appliances, granite slabs, tile, door hardware, etc. The only way to know if the allowances will cover your taste or level of quality is to go out shopping.

Another consideration is that your choice of finish or fixture may impact the installation cost. For example, you might choose tile with a more labor-intensive pattern or a built-in refrigerator that has special installation requirements. Identify these conditions up front to avoid change orders in the field.It is common for contractors to understate allowances during the bidding process because it makes their price more attractive and they can close more sales. To protect yourself from cost overruns, ask for a list of allowances and vendor showrooms so you can make selections and see if the numbers are reasonable. If you already know what level of finishes and/or fixtures you want to use, make sure the contractor plugs in the appropriate allowance. Never assume their number is correct.

You may also consider purchase some of the fixtures or finishes on your own and ask the contractor to handle the installation. Once again, make sure the builder knows what you are providing to ensure there will not be additional labor costs.

Before you choose the contractor with a low bid, do your homework and take a close look at the allowances. Knowing what home improvement contract allowances are could save you thousands of dollars!

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