About Penny Construction

Penny Construction has been remodeling and building for over 30 years. We have built New Homes, Remodeled Whole houses, Kitchen Remodels, Bath Remodels, built Additions, made Repairs, even Honey-do lists. We build because we are passionate about making it your home. We are sticklers for details, are picky, fussy, particular and our standards are extremely high. We like working with people who expect thoroughness, workmanship, attention to details; who expect us to be innovative, organized, problem solvers.

Here is a story of a project that was estimated/bid some 25 years ago.

The homeowner lived in Bellevue, Washington on an acre lot.  Their entire property had recently been relandscaped.  The house was about 30 years old and was in all different stages of it's life.  The owners wanted to overhaul and add on to their home and spend around $150,000.  They got 2 bids.  The first bid came in at $225,000.  The owners hemmed and hawed about what to do.  They commented to the first Contractor, "We wanted to spend 150K, now we are at 225K.  You can remodel our house for that amount, correct?"  To that the Contractor responded, "If I did not think that I could not, I would not have given you that price!"  To which the homeowner said, "Perfect!"

I gave the homeowner my estimate.  My price was $360,000.  The homeowner called me to express their concerns about the differential in price.  We sat down and went through and compared each of our numbers.  We looked at excavation; we both had excavation but only I had budgeted for some 250 yards of dirt export.  What happened to his dirt?  Expensive to remove from the site because it had to be done in single dump trucks and  hauled some 25 miles away.  Add $10,000.  We both had about 500 yards of carpet, he had $10.00/yard installed and I had $30.00.  Add $10,000.00.  He had a $1,500 budget for lighting which was impossible, ours $7,500 which was possible.  Add $6,000.  Add for cabinets, drywall, electrical, tile, on and on.  In 30 minutes we added 100,000 to the other price, at which time the owner cut off our discussion.  He knew the job could not be done for $225,000, not even less than $325,000.  They wanted to spend 150,000.

The first contractor's estimate/bid is what the architect and the owner had discussed with us.  When there was discretion on price, say carpet, lighting, or cabinets, the other contractors price was always rock bottom.  I had estimated/bid what I thought it would take to get the job complete with adequate budgets for the value of the house and what the owners might expect.  Both Contractors estimates showed a 15% gross markup.

Here is the quandary;  If the project had been started at the $225,000 level, the owner had moved out, the house torn apart and unlivable, and then the costs increase.  Does this place the homeowner in a financial predicament?  Would the project have ever started if the owner knew it would cost at least 300K?