baner

Difference Between an Estimate and a Proposal

Many roofing contractors offer a ‘Free’ estimate for services to your roof. From the homeowner’s perspective, this is a price to perform the services they explain. However, estimates are just that; in accordance with Webster’s Dictionary, estimates are “an approximate calculation or judgment of the value, number, quantity, or extent of something”.

In general, you want an accurate assessment of what it will cost to perform the services and supply the materials to do the work on your roof. What you really want is called a ‘Proposal’.

There are two distinctly different methods to present the cost to perform roof repairs and replacements. One is an estimate, the other is a proposal. The following will succinctly explain the differences between the two.

Estimates

Estimates are a verbal communication of value to the homeowner. In addition, estimates have restrictions and include:

1) Nonbinding, in effect, no offer is rendered with the verbal conveyance of value; AND

2) The value is typically plus or minus 20% of the final price.

The key is that estimates can be delivered over the phone to the homeowner. Many professional roofing contractors simply look at Google Earth and confirm your home’s attributes (number of buildings, height, surface area and logistics) and can easily identify the number of squares of work involved. The best roofing professionals use other software tools such as EagleView to quantify requirements. From here, they can easily and quickly estimate how much to charge. Again, it is verbal, nonbinding and generally within 20% of the final actual dollar amount.

If you want the exact amount, then you need a proposal.

Proposals

Unlike estimates, proposals are written and require a physical visit to your property by an estimator. During the visit, the roofing professional will want to know your concerns and perform a physical evaluation of your roof. Modern day roofing contractors can prepare the estimate right there on the spot depending on responses to several questions they pose. Many use software to prepare a written offer to perform services.

Take note of the distinct differences with an estimate. Proposals are written and they are accurate. In effect, a proposal qualifies as the first step in creating a contract between two parties. Since most states require a written document between parties when dealing with real estate, a proposal qualifies for two of the required four elements of a contract. This doesn’t mean you are obligated, it simply means the roofer has initiated two of the elements.

By the way, the four required elements of a contract are:

      • Offer – what the written proposal states;
      • Consideration – the price of the proposal;
      • Acceptance – the homeowner must agree to the proposal and price;
      • Performance – either party must either do the work or pay a deposit.

The National Roof Certification and Inspection Association pushes for integrity, not only with the roof but from its members. The NRCIA advocates that its members prepare proposals as a pre-requirement to creation of a contract. In addition, the NRCIA stresses to its members the value of providing options to homeowners, primarily a minimum of three different price levels depending on materials, warranties and substitutions.

In summary, there differences between an estimate and a proposal. Estimates are VERBAL, NONBINDING and an APPROXIMATION of the price to perform roof repairs or replacements. Whereas proposals are WRITTEN, ACCURATE and FORMAL OFFERS to the homeowner to render services.

If you desire to engage a roofing professional to perform work at your home, consider using an NRCIA member. Simply click here and fill out the contact form, an NRCIA member will contact you within 24 hours: NRCIA Contact

Author: David Hoare

Dave works as a consultant and regional representative to the NRCIA. He works closely with current members teaching and encouraging adherence to the integrity ethics of business operations. He is happy to assist you if you have any questions or concerns.