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How General Contractors Calculate Home Addition Costs?

By: Mark J. Donovan


When General Contractors develop home addition building costs for a home project, their estimate usually consists of two parts - Labor and Material. There is also a hidden cost factored into both these numbers as well - General Contractor Profit. Typically a General Contractor is looking to make between 20-30% profit margin on his material and labor costs.


Typically the General Contractor should be able to turn around a home addition cost estimate within a week as they frequently have a database of material costs and they know their labor rates. Frankly, once they have your requirements on your home addition project, they can plug the specifics into their home addition cost estimator or calculator spreadsheet tool and have a good home addition cost estimate on your project within minutes.


Carefully read over all of the specifics of the home addition cost estimate, looking particularly at the high price material items. Frequently you can negotiate on these costs or you can consider alternative materials, e.g. window manufactures or types.

Regarding the labor costs, you may consider providing your own sweat equity to reduce these costs.

Also consider purchasing HomeAdditionPlus Bid Sheets for your next Home Addition Project. HomeAdditionPlus Bid Sheets are Home Addition Bid Sheets that help you through the contractor selection process and will save you money. You provide the Home Addition Bid Sheet to the prospective contractor and they fill it out and return it to you. Questions are written so that you can assess if the contractor is right for your project.


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- How do General Contractors Calculate Home Addition Costs -

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