An allowance in a contractor estimate is a set amount of money included for an item that hasn’t been fully selected or priced yet. Allowances are common for things like tile, flooring, plumbing fixtures, lighting, cabinets, and other finish materials.
They help a contractor prepare an estimate before every selection is finalized—but they can also affect what your remodel ultimately costs.
HOW DO ALLOWANCES WORK IN A REMODELING ESTIMATE?
Suppose a contractor includes a $2,000 allowance for tile. If the tile you eventually select costs $2,800, the difference may increase your project cost. If your selection costs less than the allowance, how that difference is handled should be explained in your contract.
That’s why homeowners should pay attention to the allowance amount itself, not simply whether an allowance appears in the estimate..
WHY CAN LOW ALLOWANCES BE MISLEADING?
An estimate with unusually low allowances can make the overall project price appear more attractive. But if those allowances aren’t realistic for the products you expect to choose, the budget can increase as selections are finalized.
When comparing contractor quotes, check whether competing estimates use similar allowances before assuming one contractor is actually less expensive.
WHAT SHOULD HOMEOWNERS ASK ABOUT ALLOWANCES?
Before signing a remodeling contract, make sure you understand which items are allowances and whether the amounts are realistic for the products you expect to choose.
If you’re comparing multiple contractor estimates, differences in allowances can make two otherwise similar quotes look farther apart than they really are..
COMPARING CONTRACTOR ESTIMATES?
The Contractor Quote Comparison Toolkit helps you compare estimates side by side, review allowances, identify potential hidden costs, and better understand what you’re actually getting for the quoted price.
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