What is the “good faith estimate” in home improvement contracting?

The "good faith estimate" in home improvement contracting refers to an estimate that is based on reasonable cost calculations. This estimate is intended to provide a reliable projection of the potential costs involved in a home improvement project, reflecting the contractor's honest assessment of the work required, materials needed, and associated labor costs. It ensures that clients have a clear understanding of the financial commitment they are making and helps in budgeting for the project accurately.

This approach differs significantly from mere guesses or approximations. Unlike a rough guess, which could be arbitrary and lacks any basis in fact, a good faith estimate involves careful consideration and analysis of current market rates, material costs, and other relevant factors. It also stands apart from merely averaging competitor prices, as it is tailored specifically to the context of the project at hand rather than being dependent on the pricing strategies of other contractors. Thus, the focus on reasonable cost calculations emphasizes the contractor's responsibility to provide a trustworthy and informed financial estimate for the benefit of their clients.