As a new contractor, I am still having trouble trying to figure out how I want to present estimates and contracts to my customers. From most of what I read and hear, you should never give a detailed estimate, only one price for the job. A presenter at a JLC Live session I attended couldn’t stress enough of how important it was to eliminate giving out detailed estimates where everything is itemized, going so far as to say that if a customer insisted, tell them you’re gonna charge them $75 an hour in order to prepare an estimate that is clear, itemized, and understandable.
I don’t really understand why we shouldn’t give detailed estimates. Don’t we all sit down and figure out to a certain degree what each phase of the job costs? So why not share that information with the customer? I know everybody estimates differently, so its not really all that simple, but I feel there are several advantages to giving a detailed estimate.
1. Confidence- You can give the customer a price knowing that each dollar is accounted to a cost. If the customer feels the price is too high, you can easily back it up, showing the customer each part of the job and why it costs X amount for each part of the job.
2. Security- What happens when your in the middle of a job and, surprise!!!, something comes up that you didn’t expect so now your trying to explain to the customer they need to pay extra. When you have a detailed estimate, you can clearly see what’s included and whats not included in the price. it would be hard for a customer to think repairing a rotted sill was included in the price if it weren’t accounted for on the contract.
3. Accuracy- Lets say you’ve got a time and materials contract for a deck, and the footings are taking twice as long as you accounted for because you didn’t know there were big rocks right where you need to put your footings. You can say to the customer, “well I thought it was going to take X amount of time to do the footings,” as you look over your detailed estimate with the customer, ” but as you can see, because of these rocks, its taking a little longer.” so instead of just saying to the customer that the job is going to cost more money, you can show them exactly what is taking longer by comparing it to your original estimate.
Sometimes I feel like contractors don’t want to detail estimates because they are afraid of customers nit picking at little things. And they have a valid point. Lets say you estimated in the contract for 50 2X4’s yet you only use 45. Should you give the customer a refund for those five 2X4’s?
Maybe its just easier to give the customer one price and say this is what its gonna cost to do this. Period. Are we lazy? or are we just trying to protect ourselves and our customers?
Replies
Sorry, experiance has taught me the value of the Keep-em-in-the-dark-and-feed-them-mushrooms philosophy.
You will have a few clients whom may very well be grateful for your full disclosure, but this will be grotesquely overshadowed by the single one who forever attempts to weasel you out of your mark up, who swears they have enough paint that's been on the shelf for 12-13 years to cover the project, who feels you are being too overpaid for what little they perceive you are doing, not to mention that when they were working (with a masters degree in Bronze Age Sculptures, oh-by-the-way) they didn't make half of what you are charging. So you sit and go back and forth, defending what you have presented, getting exhausted for every moment that the drudgery continues.
Just once, that's all it took to convince me the value of the single number.
I give a detailed schedule of events and major steps expected, and a spec sheet (CYA) to delineate the specifics.
And just one number. They want more than that, hire someone else.
"I am the master of my fate, I am the captain of my soul." Invictus, by Henley.
"
Sorry, experiance has taught me the value of the Keep-em-in-the-dark-and-feed-them-mushrooms philosophy."
I think this is why most people want a breakdown of estimates. They feel like the contractor is trying to hide the numbers from them, and they feel like they are then being taken advantage of. But at the same time I absolutely see your point. That's the problem, I can see and sympathize with both perspectives.
What if the customer wanted to price out different materials, lets say decking materials. Wouldn't it make sense to have the decking materials as a separate item, that way you can easily compare different products, instead of having to submit a new price for each option. What about other projects that have more options like kitchens and baths?
Phases should be Payment Due Benchmarks; Start Framing floor Joists = Final Foundation payment due, Start HVAC = Final Framing payment due, etc.
One nickle and dime client can cause 100's of hours of heartburn inducing contract renegotiations. Every detail given is just one more lawsuit launch point.
"Lets say you estimated in the contract for 50 2X4's yet you only use 45. Should you give the customer a refund for those five 2X4's?" I garuntee that client will insist on a refund. Under estimate it, and he'll demand you stick by your bid, and, that you leave the excess for him, "'Cuz he paid for them."
Your Scope Of Work should cover your points #2 and #3 with an Unforeseen Conditions clause.
SamT
"Your Scope Of Work should cover your points #2 and #3 with an Unforeseen Conditions clause."
Very true. But I'm thinking in more of a "what would make the customer most comfortable" mindset. Wouldn't it be valuable to be able to point out things so clearly on a detailed contract so the customer won't feel like they're being taken advantage of? Without the details, the customer is basically just taking your word on some aspects, as opposed to being able to understand it by seeing the item in the contract.
If you're going to spell out everything in your contract specifications, why not attach a price to each part? If the fear is that the customer will now have a bunch of things he/she can complain or argue about, then I suppose the question is now, how detailed do you make your specifications? When do you include material quantities, how descript are you with the materials, how do you describe each phase of work. Now it seems you need to tell just enough that way it is clear enough "legally" as to what work is to be done, but at the same time, don't tell too much where the customer can complain if you have a sheet of sheetrock left and they want a refund.
I think consumers have been trained to always assume they are being taken advantage of. They naturally will act to protect their interests and you will have to protect yours. You could bill your customer for materials alone, provide them with the lumber yard reciept and some will still assume you are screwing them somehow. How much is the kickback from the lumber yard? The lumber yard pays you to install the wood right? Some people are malicious and unethical and will knowingly cheat you. Some will cheat you because they just don't get it. The really great customer that actually wants to see you make money and get ahead are few and far between. Sell your jobs in the best way for you to protect your bottom line. If that means full disclosure I would tend to think your are probably best doing T&M or cost plus contracts.
Jason
SpiderT3 Here's what I show the prospects. It's a "good-better-best estimate." The attached PDF file includes the section to the right that is invisible to the client and is my plan take-off work sheet that I thought you might want to see. The TO &est is real and is something I presented to a client recently, the name has been changed. The idea is to give the client a "menu" of items that they can choose from to get the project and budget they want while realizing that the way to get the budget they want is by adjusting the scope of work, not beating you up on the price. Blending roofing in with roof sheathing gives them a sense of the value of that work without giving them the quantity and price to go out and get competing bids. This eventually becomes the schedule of values we use for billing purposes and the prices are based on a "perceived value mark-up" structural items and foundations are marked up steeper than decorative items like paint, cabs and trim. (the effect of which is to harvest more profit in the beginning of the project than at the end which can be dangerous if you buy the girl friend a new sports car when your framing and later discover you need that money to finish the job. Been there, done that, it was worth every penny.) Our estimating system is based on the Home-Tech books and backed up by 8 years of tabulated and graphed job cost data. The clients don't need to know how many 2x4's you plan to use and neither do you until you have the footings in the ground. All you need to know is that the prices on the line-items make sense for both parties and that you both will feel comfortable signing a contract based on that schedule of values. By giving them options rather than a single price you give them the power to make the difficult decisions they need to make to get what they want at the budget they can afford without having to beat you up on the price. Everybody can come out of this one a winner.------------------
"You cannot work hard enough to make up for a sloppy estimate."
How can you look me in the eye and tell me you want to charge $18,916.20 for Cedar shingle siding? This weeks HD/Lowes/Kwiki-Mart ad says I can get it for $18,916.10.
You trying to rip me off? Maybe I need to look closer at the other numbers.
<<How can you look me in the eye and tell me you want to charge $18,916.20 for Cedar shingle siding? This weeks HD/Lowes/Kwiki-Mart ad says I can get it for $18,916.10.>>Not generally the reply I get. More like "wow, shingles sure add up! How much would it be if I went to cedar clapboards or hardiplank? Obviously my estimate doesn't tell them how many shingles will be required, how long I think it will take, or what my mark up is so no way for them to compare any thing but refrigerators and those I show my contractors discount price with a 15% stated up front markup. (which is less than my mark up for framing)Hope this is helpful.M------------------
"You cannot work hard enough to make up for a sloppy estimate."
I guess I should have put a ;) in.
Or, to quote Foghorn T Leghorn "That's a joke son, that's a joke"
<<I guess I should have put a ;) in.>>No sweat on that I knew you were joking but this is one of my pet topics so I couldn't resist the chance to spout off some more. I hope that some of the systems that have worked for me will work for others and help them to get paid what their worth and have more time to go fishing with their kids. And so... Attached is a data mining sheet on decks per square foot over the last eight years. I can now look at a plan, say "this deck reminds me a lot of the one we did on the Cook job" look up quickly what that deck cost per foot and check my price on the new project. In reality what happens is I run the estimate my usual way and then hand it off to my office manager who runs through and compares it to the historical data on about 10 or 15 items. She gives me a report pointing out any places where my estimate deviates from average and challenges me to defend my estimate before I show it to the client. ------------------
"You cannot work hard enough to make up for a sloppy estimate."
Spider,
I used to provided detailed estimates down to the roll of tape. No longer. Very few customers are sophistacted enough to understand that nature of such estimates.
I found out I needed to get myself and them out of the mindset that they are buying a item that is sold piece by piece. What it has evolved into for me is they are being provided the service to create the bathroom (Kitchen, deck, house, etc) of their dreams. I the contractor will provide the end product as specified in our contract. How I get there is not relevant except that I get there in time, on budget and meet all the items we agreed to. It is not relevant if I use 25 or 30 2x4's and whether or not I got the best price on the 2x4 (because HD 2x4's were 5 cents less than my lumber yard on the day I bought them)
When you buy a car-you do not buy it bolt by bolt, gasket by gasket-you buy the car. The same hold true for building.
When we are trying to find areas of expense or places to save, I usually give allowance. For instance-installing tile in the bathroom allowance for materials $400. They can buy $1.00/sf tile or $100/sf tile and we adjust accordingly.
The same issue holds true for doing work T&M. I have not encountered many folks who are able to deal with billing by the hour. THey start counting 5 minute increments.
As a result of my experience-we do everything fixed price with line items allowances for things that may have some opportunity for change.
I am not hiding anything. I show the client the contract, the drawings and the specs. This is what is it going to cost. Period.
Bruce
Edited 7/24/2007 3:06 pm by Hiker
very well said Hiker.
Stephen
And the same to you Stephen-referrals are the key
Bruce
Hiker, I really like your response, I understand the idea that we are selling the job as one job, not many smaller jobs under one contract. That makes sense to me. I feel like most people are missing that point. Most people are against detailed estimates because they "don't want to give the customer the upper hand," but really its not about that. Just as you said, we give a price to do a job, what my costs are involving how i get that job done are none of the customer's business. I like the car analogy you use. As long as I fulfill what is set out in the contract, and do it on schedule, that's all that matters.
I think most people misunderstand that point of view completely. I wonder how we can get customers to get it. If a customer asks for a detailed estimate, and you say "its none of your business" I can see why it might seem like you're trying to hide the numbers because maybe you're taking advantage of them and you don't want them to know. Of course that isn't true, but I can see why it may seem that way. Why is it so common for customers to expect detailed estimates?
Trying to get people to "get it" is an uphill battle. That why you want develop a referral base that gets you clients that already want you to do the work as mentioned by Steve Hazlett.
This has been brought up many times here and I know I have offended some, but I have decided I will not bid any projects anymore. If there are multiple bidders, the owner is more than likely going to go with the lowest bid (in my experience 100% go with low bid). Detailed estimates help owners compare apples to apples (even though it is usually not). I know I will not be the lowest bid-so why bother.
As Steve mentioned, make happy clients-they are the best marketing tool known to this business. Ask those people to get you referrals. Thank them for each referral. If you do great work, this is easy to do. In three to five years you will have more work than you will know what to do with. The referral client wants to know how much it will cost and when can you get to it.
Check out the past discussions-there is much to learn. There are multiple books worth of business advice in this folder-all specific for our industry.
Bruce
BTW-fill out your profile so we know a little more about you
Why is it so common for customers to expect detailed estimates?
It's not. In the past 5 years, I've had only one. Who knows, the one was an upper-middle class VP of some pharmaceudical, so who knows for class.
"I am the master of my fate, I am the captain of my soul." Invictus, by Henley.
I've not once been expected to give a detailed estimate to any of my clients.Most jobs I do are under $4000. All they are concerned about is the bottom line and when can you do it.
Frank
spider---what you are proposing will be counter to what you want to accomplish.
the customer naturally wants the best goods and services at the lowest price-------------------
but that is NOT what you are in business for.
what you propose-----encourages the consumer to chip,chip,chip away at you-----untill YOU are left with the riskiest,or most time consuming, or lowest profit portions of the project.
you are encouraging your customers to view you as an a la carte menu.
you will do better to concentrate on other things-----------want to re-assure a potential customer?-----NOTHING re-assures and encourgages them like a long track record of happy customers---imagine a prospective customer who got your name from THREE or FOUR other previous customers---ALL giving you a glowing endorsement BEFORE the prospective customer ever calls you.----work on developing THAT track record---one project at a time------because otherwise you are essentially just competing on price-----and someone else is ALWAYS available to do it for less.
stephen
1. Confidence-
What can and will happen is the customer is going to at some point ask is it really going to take XX hours to complete the demolition? Or, but I know you can by XYZ cheaper at this place… I saw a better price for that faucet online at faucetsdirect.com or some such argument.
The confidence you give your customer is by giving them a fixed price contract from start to finish through final clean up. What happens on most of my estimates I’ll over estimate how long one phase will take but it makes up for what I short putted on another.
Your customers are not going to understand all the cost of your being in business and educating each and everyone of them isn’t realistic or necessary. There are far better ways to build & sell confidence then breaking out your numbers.
2 Security-
That is where a detailed proposal comes into play. You should always spell out in writing as detailed as possible what is included and what is excluded, the surprises you encounter such has hidden bad wiring or rotten framing should be covered by a “Hidden Conditions†clause in your contract. Pricing has nothing to do with that.
You should also try to educate your customers about what un-expected items may pop up. Something like a rotten window sill in the open would be hard to miss, but if you had detailed to repair certain windows, it would not be hard to explain why a particular window was not included. As a general rule for me, the older the house the more likely we are to encounter something hidden and customers are made aware of that in the beginning, the same can be applied if I know certain builders constructed the house.
3. Accuracy
That goes back to a well written contract with a “Rock Clause†included for such events. With T&M work I will usually break out the cost a little more, because it is not a fixed price contract and they are entitled to know how the final bill was calculated.
Security and confidence you offer by other means then a broken out estimate. One of which is a fixed price, which in mind is pretty secure. It sounds to me you are trying to make up for a hard time estimating accurately by breaking out the price so much that you can go back and say, see that’s not included.
One bid of advice that I learned is do not try to cut your estimates as close as possible, build in some slack because you will encounter things you missed or something will take longer then expected. I tend to be optimistic when estimating and a lot more realistic when one of the guys starts a job…
Very interesting. See, this is the kind of reasoning that makes sense to me. Thanks for your input.
What about so-called "cost-planning service."? Do any of you guys offer this type of service, and do you itemize during this type of agreement? What about accounting for overhead and profit? Is it attached to each item or is it calculated separately and shown as a separate figure?
Give them one number.
For 'X' work = 'Z' money. Thats it.
My sparky does top end work and people know it. He makes a great list of what is required etc. As he does stuff right and according to code it costs what it costs.
then some cheapskates take his list and specs that he worked hard to produce and give it to some hack and ask if they can beat that. They do and my guy loses out.
If you find part way into a job that extra work is needed. Figgure it out and present them with 'This needs extra work and it will cost X'.... Thats IT
As for pricing different materials......Option A is $$$.......Option B costs $$$.....Option C costs $$$
I get the odd one who wants a break down. I tell them the cost structures are confidential company information. If they insist, I walk.
I told one guy to ask his doctor what his overheads and profits were. He started to get the idea then. I still wont work for him.
People talk about insanity like its a bad thing........
Do it however you want. Eventually you'll get sick of doing other people's homework for them, so they can shop your bid to their friends' friend.
"...an open mind is a powerful thing. The ability to listen to others is invaluable."
Jim Blodgett
I think you're getting a good deal here. Lots of good advice and experience talking and darn little fluff.
That said, I completely understand your thought process. Something coming to mind is understanding market and clientele. Things get done different from one place to another. Which is NOT an excuse to ignore good procedure in lieu of local practice. It is, however, also foolish to ignore it completely. You've got to find the balance between advice from outside, like here, what you know of your locale, which only you know, and what your gut says. Two of of those three are on you.
I try to walk the line, and I'll use the contract that got signed today as an example. This was bookcases, and a nice large set of built ins. Unbeknownst to me, I ended up estimating / bidding against 3 other people. Tell me that ahead of time I'm not even interested anymore. But there it is. I discussed what the clients wanted, I answered questions as to construction methods, and there were some questions as the built ins related to the rest of the work they're doing and the guy doing the trim. I gave opinion on all of that. The estimate though was pretty straightforward. This kind and grade of ply for carcasse body, poplar FF's, everything painted the color you pick, this price. Thats enough really for an estimate. I included one .jpg of a very basic Sketchup which didnt really show all the details, just a massing sketch to show the relationship of the built ins to the rest of that end of the room.
You can get into detailing those elements that the client thinks are important as far as scope or construction details go when you do a contract. I normally wouldnt list that something is a M&T joint or biscuits unless that had already come up as some sort of must have on their list and then I'd put that in the contract to assure them that this is what you're specifying. When I run into people that say I want a breakdown thats a huge flag for me (and theres my experiences talking). I'll give them the benefit of the doubt and inquire why, but 9 times out of 10 the "Run away now" meter pegs out and thats the end of my interest in the project.
I dont recall who made mention that people are expecting to get gouged and theres some truth there . . . we've all heard stories. But theres also just as many people looking very hard to find an angle to use to do the same to you. I dont like either of them. If its wrong one way, its wrong the other. If either party isnt ready to come to the table with a mindset towards building a relationship on trust, there's just no sense going further.
Real trucks dont have sparkplugs
several years ago my partner/brother and I were quoting a large 2nd floor addition. my brilliant brother gave the HO the complete set of plans and the take off spreadsheet to "look over".
from there the HO launched his brother-in-laws contracting career.
and, that was the end of our partnership
Figure out what the job will cost including paying yourself a reasonable salary then add a comfortable percentage to that. call that your target markup. things will come up that the percentage will cushion. if nothing comes up and everything goes smoothly then consider your business to have made a profit.
that percentage is also where you adjust your bid if you need to be competetive
dont treat yourself as the business and let all of the pitfalls come out of your pocket. treat your business as your employer, a separate entity, for whom you work and it is your job it is to see to it the business makes a profit
your business will never profit if you let the customer count your nails
In case anybody is interested in the homeowner/customer point of view on this topic...
When I get estimates I usually ask for some breakdown into detail but I'm NOT interested in knowing exactly how many 2x4s will be used or how much a box of screws costs. Here's what I do want to know and why:
1. Quantities of big ticket items (e.g. when I had my roof shingled I wanted to know how many squares). I don't care how much the contractor paid for the shingles but unless I already know the contractor well I will get more than 1 estimate and I usually like to understand why they might be different. Did somebody see 26 squares while somebody else estimated 23? Who's wrong? Did I forget to tell somebody something or was he not listening? Etc.
2. Relative cost of each phase or aspect of the job. This helps me spot flaws in my thinking. For instance I might find out that the "small" change in location of the toilet accounts for a huge part of the cost of the job. It's a "nice-to-have" for me and certainly makes the end result nicer but if I'd known it was costing me $BIG to move the thing 4" to the left, I would have just put up with the doorknob banging into the top of the tank. Or whatever.
3. What I ought to do myself or postpone. I don't have the luxury (read: $$) of hiring out everything I'd like. Usually it turns out that the things I can do easily or quickly are trivial for the contractor so it doesn't pay to insert myself into the process. But there are other jobs that I can do to save some bucks as long as I have enough time and patience (I DO have some skills) and some jobs that I can put off until next year. I want to be able to judge the relative merits of those things.
Usually if I ask the contractor to break things down along those lines and candidly tell him why, it works out better for both of us. Those things that add inordinate amounts of cost to the job are usually a pain in the butt to the builder (and sometimes they don't want to tell me outright that I have my head up my *** but the price will show it).
I've also found that most of the people I deal with don't have a problem helping me figure out how to afford things and get the best bang for the buck. The good ones recognize that it's in both our best interests to maximize the results for the dollars. But I have run into some who would like me to just write them a big blank check and go right ahead with the nice tray ceiling my wife saw in a magazine even tho it just added $8K to the job because of the hidden cost of moving those pipes I never thought about ... That guy I don't need.
Bob,I liked that so much, I copied it into my Business KB FolderSamT
"I liked that so much, I copied it into my Business KB Folder"Thanks Sam. I'm glad it seems helpful. But judging from other reactions here I suppose I wouldn't let my reply get too comfortable in that folder. :^)
Bobl,
when you had your roof shingled you wanted to know how many squares-------
how many squares WHY????????
how many squares WHAT?????????
which number do you want?---
1) the number of squares the roof measures?
2) the number of squares I need to order?
3) the number of squares consumed if my crew does the roof with 6 men?
4) the number of squares consumed if I do the project solo?
there are AT LEAST 4 different "number of squares" possible--------( ac tually there is at least one more--- but I already made my point-------
so----which of those 4 " number of squares" do you want?-----and how is it relevant to you?-----------since my price to you is THE SAME no matter which of those 4 potential "number of squares" answers I give you
how is this "number of squares" remotely relevant to you---since you aren't paying me "by the square" ?------and WHY on earth would I provide that number to a potential customer?
that number is of no positive use to the customer from MY persective------------however a potential customer ASKING that question just gave me a HUGELY important bit of info( that is---- I don't want the project!!!!)
Stephen
"which number do you want?---1) the number of squares the roof measures?2) the number of squares I need to order? 3) the number of squares consumed if my crew does the roof with 6 men?4) the number of squares consumed if I do the project solo?"What I was looking at was #1 - size of the roof. In that particular case, one part of my roof had been shingled the year before and I told that to each of the contractors. By seeing this number I quickly became aware that one of them didn't hear that and quoted the whole roof. I confirmed that with him. Without the number, I never would have known and neither would he (unless it was an intentional oversight, but I try not to be that uncharitable in my assumptions).Maybe you can educate me a little bit, if you don't mind. What are those other 3 numbers about? I can imagine an explanation for #2 - it seems reasonable to order a little more than you need to account for waste for various reasons. But why would the amount of material needed change depending upon the size or makeup of the crew? Note that I'm not criticizing here - I'm not a roofer and I'm just ignorant on that.edit: I guess a more concise way to explain what I meant when I said "quantities of big ticket items" is to say that I want something back from the contractor that shows me we both have the same idea of the scope of the work.
Edited 7/25/2007 6:21 pm ET by BobI
Bob,
Thanks for your contributions, its great to hear the other perspective of this topic. I definatley understand your reasonings for wanting a cost breakdown of different phases. I think this kinda falls into the "cost-planning" method I mentioned earlier. By having the contractor and the customer look at the job and the budget together you can make decisions that could potentially save the customer a lot of money and/or headaches.
The problem is most customers expect contractors to give free estimates. But there's a difference between bidding a roof that's relativly straight forward, and estimating a small remodeling job, where the job may not be 100% figured out by the time you ask a contractor "how much is this gonna cost." You may have been thinking about knocking a wall down to make the room bigger, but you're not sure if that's gonna fit in the budget. So now, the contractor has to spend a lot of time going back and forth running numbers to figure out what's gonna be best.
I feel there's a point where the customer should be charged for cost-planning services. (I know there are people who feel contractors should charge for ALL estimates given.) The contractor is giving his/her time and professional opinion to the customer in order to find what's best for the budget, the design, and everything else pertaining to the job. The contractor should be compensated for that.
So where do you draw the line and say, "hey Mr. Customer, we need to come up with a cost-planning agreement." What jobs require it, and how do you bring it up?
Hi SpiderT3,I definitely understand the concern over the cost planning problem. I personally don't expect contractors to do that work for me - in fact I do my own homework and try to do the cost planning myself. I consider myself reasonably knowledgeable for somebody not in the trades (I read this forum, Fine Homebuilding, I've done quite a lot of my own work including building a 16 x 22 standalone workshop building from the ground up). But every time I talk to a contractor I learn something I didn't know that has a material effect on my plan. I suppose even you guys in the trades don't know so much about everybody else's trades. So I'm always looking for hints that I may be out to lunch on some part of it. In a case like the one you describe:
"The problem is most customers expect contractors to give free estimates. But there's a difference between bidding a roof that's relativly straight forward, and estimating a small remodeling job, where the job may not be 100% figured out by the time you ask a contractor "how much is this gonna cost." You may have been thinking about knocking a wall down to make the room bigger, but you're not sure if that's gonna fit in the budget. So now, the contractor has to spend a lot of time going back and forth running numbers to figure out what's gonna be best. "I wouldn't expect a contractor to do that work as part of an estimate. To me that sounds like design work. What I might do in that case is ask the contractor for advice or his thoughts on what to watch out for and then go design it myself. But when I "design" it I don't try to do real drawings - just a sketch of what I want. If drawings are required either by the building department or by the contractor then I'd expect to pay to have them done. Most of what I do when I "design" is answer that question - can I afford to do it. Then I'd expect to hand my sketch to a contractor and ask what it would cost to build it. I'd feel guilty about asking him to do that twice for 2 different options. Usually I would just ask for an estimate on what I thought was most expensive. I guess if I really needed both (or he convinced me that real drawings were required for a single estimate) I'd consider it fair to pay for the estimate. To be honest I haven't had to do that. I moved my own walls. :^)For what it's worth, The only circumstance so far where I've paid for an estimate was when somebody had to get their hands dirty to find out what we're dealing with. I asked masons for estimates to reline a chimney. Because they had to remove an old metal liner, climb up on the roof, etc. they charged several hundred bucks to do it. I considered it part of the project that had to be done anyway and it was what they needed to do to get a decent idea of the scope of the job. Seemed fair to me.
If a customer wants a detailed cost breakdown for nuthing...I give them an order form for the Hometech remodeling cost estimator.for 200$ and a bunch of thier own time they might be able to learn something....
.
Pants???I Don't need No Steenking Pants!!!
We wuz hopin' you'ld find some pants that din't steeenk.SamT
Bob,
If a roof physically measures--say 20 square,----you know there is a waste a scrap factor
that's gonna vary depending on WHO does the installation and as huck pointed out--the complexity of the project.
working solo---- I will generally only have one bundle open at a time from beginning to end of the project----and off cuts I am mentally keeping track of to use in other locations on the roof to cut down on scrap--because it comes DIRECTLY out of MY pocket
but----if 6 guys are working--there are 6 bundles open-----and NONE of those 6 guys particularly cares what happens to the scrap because it doesn't come out of their pocket.
so--at the end of a project--working solo I might have a single open bundle--and any "leftover" full bundles I can return to the supplier for credit
but the 6 man crew---may have 5-6 open bundles---- none of which are returnable.
As an example------last week I finished a project which had a main roof of approx. 100 squares--straight gable, no valleys, no hips etc.
I roofed that solo( actually my son labored for me--moving bundles around etc.--but did NO installation)----that "100 square" roofed solo generated less than 1 bundle in scrap-----all the scrap from that roof could have easily fit into a 5 gallon bucket.
my usual crew roofed the attached office portion of the building--about 28 square--- hip roof, 2 skylights.--- a roof barely 1/4 the size----but much more complex----they generated many,many times the amount of scrap--- probably close to 2 squares of scrap right into the dump trailer
in general--- If a crew is doing the roof I will figure on 10% scrap----and hope it stays around 7%
if I personally do the roof-- i figure 3% scrap---and try to keep it well below THAT.
on some of the smaller houses I do-- i have done MANY of the same model( small "levitt town" style capes)---working solo I order 11 square because I know it's gonna take me almost exactly 10 and 2/3 square
but if the crew works that house---then i order 12 square.
BTW---absolutely ZERO reflection on YOU
But I am still furious----incredulous----- that Gene would attempt to inject race into this--- i think that was way out of line---------------
stephen
BTW- I forgot to mention----- if you, the homeowner told me the roof measures 20 square-- i would straight out ignore that measurement--------and measure it myself--- because I need my OWN material take-offs based on how I intend to do the roof--not how somebody else might do it.
also--- you might say it measures 20 square-- but that section over there was done 2 years ago so you don't want to re-do it------------ but I will almost certainley ignore that as well--- If I am going to do it--- I am going to do it MY way-not yours---- because experience tells me any problem on that entire roof in the future is gonna drop in MY lap-----and I am not taking responsibility for the guy who roofed THAT section 2 years ago.----sure-eventually we might get it sorted out--but only after a seemingly endless series of phone calls and money wasting trips on MY part to establish that the leak comes from the previous guys work.
possible exception might be a detached garage---just roofed a couple years ago----seperate structure---easy to steer clear of that responsibilty-- I wasn't even ON that roof!
Stephen
Edited 7/26/2007 8:24 am ET by Hazlett
Spider,
I don't give detailed estimates, broken down by stages. Mine are basic "what is going to happen" and a price to do it.
If a customer wants some clarification, I will do that, but it will be a give and take situation. What I am going to take, is a commitment to the number I presented. I am going to ask a "tie down" question to see how serious they really are.
Customer: "can you break this out into more detail?"
Me: " Yes I can do that for you, but overall is this a number that works for you?"
A customer asking for clarification and commiting to that number is a HUGE buying signal. It may not be me if there are other bidders involved, but I would guess that 98% of the people who have asked clarifying questions have moved forward with the project. You are out of the realm of tire kickers.
What they are saying is "I am willing to spend the money, now convince me that I am not being taken advantage of, and you are the person for the job." Nobody wants to appear to be an easy mark. With just a little more info, they can now make a "new decision" and go with you. no need to open the floodgates, just enough info to float the boat.
But I would never present a detailed broken out proposal in the early stages.
Bowz
In other words, you can't answer his question, because you don't know the answer, and won't know it untill the day you start roofing.SamT
again Sam--- you are speaking nonsense.
I can Certainley answer his question--------but the hypothetical customer hasn't defined WHICH of those FOUR "number of squares" questions he is really asking--the hypothetical customer doesn't even know there are at least 4 questions in play at that moment
but as I aready mentioned----- though I CAN answer that question-- I WON'T----as there is ZERO benefit to me to do so.
there are also many OTHER potential questions a prospective customer might ask--which I also would not answer
1) how much do you pay for liability insurance?( none of their business---although wether i have it and who it is with is certainley their business)
2) how much do the materials cost for this project?----- none of their business---although the "how many squares "question is usually an opening gambit to "try" and figure that out----without the realization that on many roofs all the vents, flashing, amd accessories are often more than the cost of shingles--so the "how many squares question"--is at best a misleading indicator of material cost.
3) what's your profit on this job?
4) do you own that truck outright-----?--- if not what's your payment?
5) how much do you pay your employees?
6) how much money do you have???
I have been asked all those questions by prospective customers at one time or another---just because they woulf LIKE to know---doesn't mean I have any reason to answer.
ya know sam-- i have admidted many times that i am not that bright----- but I don't think I have EVER given anyone an indication that I couldn't answer those questions----as they clearly fall within the extremely limmited range of what I DO know.
If bobs post was of value to you--that's great--- I am free to disagree-------------------------------------------------------------------------------------------------------------------------------- but don't try to paint me as a racist or imply I don't have a rock solid grip on MY numbers.
I don't know anybody elses numbers---and could not possibly care less about THEIR numbers---but i have mine down just fine.
Stephen
"but don't try to paint me as a racist or imply I don't have a rock solid grip on MY numbers."Where's this "racist" shid coming from?I never implied that you don't have a good knowledge of the four different quantities of material a particular job might take.I said that you don't know which one of the four applies until you 're ready to start work on that job.Maybe you should try some decaf fer a while.SamT
Thanks Stephen, That's an education for me. Incidentally, I didn't think to ask the roofers how many squares the roof is - the first couple of guys just wrote it on their estimates so I started comparing them. I didn't do a measurement myself but I did look to see if everybody was in the same ballpark. When one guy's price was way out of whack I asked him about it. I guess I could have just crossed him off my list and said nothing. Would that be better?Also, if I just had part of my roof done last year and I am confident that it was done well, I'm not going to pay somebody to do it again. If that gives you heartburn I can't fault you for it. You can bid the job any way you like but the bottom line is that it's my house and my money and if that's the only way you'll do the job then I'll thank you for your time and trouble and hire someone else. Unless you want to spend the effort to try to educate and convince me that there's a good reason for it. But then you'd better have the facts. Bob
I guess I could have just crossed him off my list and said nothing. Would that be better?
Or I guess you could have hired him - since he was the only one that figured the whole roof, which is the only way it could be warranteed. Would that be better?"...an open mind is a powerful thing. The ability to listen to others is invaluable."
Jim Blodgett
>> "Or I guess you could have hired him - since he was the only one that figured the whole roof, which is the only way it could be warranteed."Or maybe he had no idea what he was doing, or was one of those don't actually do any of the work himself, uses subs for everything, takes 50% off the top for himself for "finding" the job, and closes down his company every couple years so that there isn't any warranty liability.Yes they exist. I've run into them, as I'm sure you probably have too.Which is one of the reasons to request a decent breakdown for the bid. So that the contractor can prove that they actually know what they are doing.
Bryan,
that's actually an interesting perspective.
in application however- i don't think it would particularly effective in accomplishing what you want it to accomplish---because the type of predators you are trying to defend against are usually pretty skilled at coming up with plausible looking paperwork. I would think from a homeowners perspective--- it would be much more effective working from referalls---checking out previous work---actually looking for and checking out references etc.
stephen
Bob,---should you have crossed the guy off your list because his price was out of line with everyone elses?
who knows?-- from your perspective-- probably yes-- because he wasn't giving you what you think you wanted
however--------what if that guy came to you highly recommended-- in fact 3-4 people had given you glowing endorsements--------while the other 4 guys who gave you prices---were competing on price. Perhaps--the guy whose price was out of line---actually Knew what he was doing?
people operate on different business models---- you seem like a reasonable guy and i hope you will stick with me here and allow me to wander off topic a bit to illustrate a point------- :)
if you get cable or sattelite TV-- there is a TRAVEL channel-- with a show I love------------ Anthony Bourdain----basically the show features this trained chef--that travels to places I am never gonna get the chance to see---and eats at places I am never gonna get to eat at--and tells you about it----------
so the other night he is in Seattle or Portland--some where in the great "Northwet"
and he goes to this Pizza place--- he is amazed by it-- in fact he compares it to the episode of the Seinfeld show with the "soupnazi"--- basically this pizza place makes everything from scratch---mixes the dough by hand( which is apparently unheard of"--------- they will only allow you 3 toppings per pizza--- if you want more than 3 on your particular pizza--go somewhere else !------and here is the kicker--the pizza place opens at 5:00 pm and they usually sell out of pizza by 8:30 pm-at which time they close and go home----well,---while Bourdain RAVES about the pizza--he is kind of puzzled why they won't just stay open-make more pizza and do more" business"
how this relates to you and I?--------- you are gonna encounter contractors like that pizza place. In my own limmited way I have always tried to operate like that pizza place
I am selling a limmited commodity---and every year I sell out of it. that's my business model. I am not interested in selling MORE of it----in fact I am interested in selling LESS of it. since every year I sell out of it--- I am not interested in "Bidding"
so, in my business( roofing)--a prospective customer calls me with a problem---we talk about it a bit on the phone- i explain a few things to them---and then maybe I do go look at the problem, decribe how I will solve the problem,and give them my price for solving the problem.-- that's pretty much it--- the customer doens't have a lot of input into it other than choosing a color.- If i am gonna solve the problem, I am gonna do it my way, at my price. I couldn't possibly care less how somebody else might charge---or how the customer might want me to solve it.
now----- this probably looks kind of rude in print-- but in practice-remember that the prospective customer almost certainley was referred to me by previous,multiple customers-- they called me-not the other way around--and i realize I am selling a limmited commodity
so--that's the model i operate from. i have enough business--in fact i want less business( ironically-that attitude brings in even more business-something that I didn't know 20 years ago)
other contractors operate from a different business model---more the school of" the customer is always right--we want your business--how can we serve you?" school of thought. nothing wrong with that---it's just a different technique.
as you probally can tell, I am not personally suited to applying the " customer is always right" technique. we all have to operate from a model suited to us as individuals.
I would also point out-- I operate primarily within a geographically limmited area---- primarily a 8-10-12 block radius. for 20 plus years. If I go outside that radius--it's almost certainley on a referall from someone within that radius.So-------it's litterally impossible for me to leave my house at anytime without driving past the last 20 years of my work-- I can't go to the grocery store, the gas station, the library ,to church or basically anywhere--without encountering my previous customers. my work and my life are completely intertwined--and if someone doesn't have a consideration for the WHOLE picture-- my method might seem rude.
in your case---------4-5 guys come to look at your project----one of them has a price out of line with the others----perhaps he is somebody like me---operating on a business model more appropriate to someone 130 years ago in a village of 800.
It's a business model pretty much ALL the current business books will tell you can't work--- but it works for ME, in THIS location, in THIS trade.- It probably wouldn't work for me as well in another location, or in another trade.
interestingly-- i am having the front steps re-built on my home by a small company working much the same way-- who I encountered by sheer luck. I think once you find some of us "oddballs"-- you may tap into a whole network of similarly minded people who will do very nice work for you. We are all operating in a way that modern conventional wisdom tell you can't be done--but it can---- it's just that the modern consumer is not really conditioned to it.
good luck to you,
stephen
Hazlett, BobT gave you a great answer.
And your question to him was condescending. Grow up. Do you think that roofing is the only thing in the world that has degrees of material usage efficiency?
Wow. "I can be really efficient, working alone." And six guys, all brothers, named Gonzolez, cant? Gimme a break.
your question to him was condescending
Maybe I missed something, but I didn't see it that way at all. Only that he was making a point that homeowners can ask for information that they aren't in a position to understand the relevance of.
And also that a seemingly simple question can produce a lot of unnecessary legwork.
"Well, your roof has approximately 24 squares, but because of the numerous hips and valleys, I'll probably have to order 27 - unless I work alone, then I can carefully plan my layout to maximize efficiency, and get it down to maybe 25 - but if I'm swamped at the time, I'll have to call in my help, and my helpers are good but not as efficient as me, so I'm leaning toward 27 because I don't know what my schedule's going to be like when you call me to do this job.
"But if you let me know for sure when you want it done, then I can tell you for sure how many squares I'll be ordering. Hang on, let me check my calendar, so I can tell you if I'm going to be real busy on the date you want me to do the work. - Of course, things can change, so if the date is too far out there, then I can't really predict if I'll be busy then or not, so a closer date is safer, as far as knowing my schedule and workload. What's that?
"Why do I have to order more squares for the hips and valleys? Well, that's because the shingles there are cut at an angle, and so the remaining scraps are kinda wasted. No, you can't use them on the other side of the valley, because they would end up being too small, after you cut the angle for the valley. Yes, sometimes you can use the valley scraps by the hip, if you plan your work carefully, which is why I can often order a little less when I do the work myself.
"Oh - all you wanted to know was if I remembered that you only wanted a partial re-roof? I guess all you had to ask, in that case, was if I remembered that you only wanted a partial re-roof. And of course, you'll sign a waiver stating that I won't be expected to warranty the roof, since I'm only tying in to someone else's work?"
Its like going to an antique store, and asking the owner "how much did you pay for this item?" Without knowing the market, the circumstances, and a wide variety of other information, the answer is pointless. If you're interested in purchasing the item, then his price is what you need to know.
So anyway what I got out of it was that as long as the client clearly describes what they want, and the roofer clearly spells out his price to produce that result, why in the world would the client want to know how many squares?
Just my unsolicited opinion, free, and worth every cent!
"...an open mind is a powerful thing. The ability to listen to others is invaluable."
Jim Blodgett
Gene--- that's a pretty racist remark---which YOU injected BTW not me.
RACE NEVER entered my mind---and in fact is totally irrelevant here---but I think it shows more about YOUR state of mind than my state of mind.
i wasn't condescending toward bob--in fact I pointed out something he admidts he wasn't even aware of
and SINCE HE mentioned roofing---- I pointed out the downside to his reasoning in HIS example---------
no where did I mention or even imply applications to anything else
so-if anything Gene-- you owe ME the apology, LOL.-not that I expect one
Jeeez, I really don't know where you dug that racist ,B.S. remark out of----------
Stephen
Haz, what is your real beef? My apparent Latino-phobia, or my attitude to your arrogance? I suspect it is the latter.
Let's call those six guys your cousins, instead. The Hazlett brothers. Feel better? Of course you don't.
If I am GCing a build, I will tell someone quoting a furnish-and-install roof shingle scope, what I have figured for the NET area to be shingled. I also tell him or her that my figure is for information only, and that the job should be figured by them from whatever they can derive from plans and site measurements. Usually, at the time for bidding, we've not even framed the roof, so the roofer must use plans. What the roofer figures for waste and scrap, means nothing to me.
My software gives me the net areas right from the 3D model, and yields exact and correct info.
Most of the roofer subs here don't furnish material, so want to give a unit price quote. I won't tolerate that, and tell them so, because they will want to bill by quantity consumed and not laid. That means the more inefficient they are about material usage, the more they get paid, and I end up buying more shingles. Bad for me, good for them. We discuss, we argue, we discuss some more, then agree on a lump-sum price, and how I will discount the bill if I see more than the agreed-upon scrap and unreturnables. In my market, that works. It even worked when housebuilding was booming here, which is sure isn't, now.
You would not work for me. I can tell, and so can you. That's OK, finding a good roofer isn't difficult.
But a homeowner seeking a reroof like BobT makes a valid point when he says he is interested in hearing the bidder say how much area he's figured for the job. BobT knows his figure, and if he hears a number that sounds wild, it sets off an alarm. It weeds out the guys who flunked math.
Bob
Usually if I ask the contractor to break things down along those lines and candidly tell him why
I think you hit on something that's very important - communication!
I wouldn't have a problem giving something similar to what you asked for in a bid if you told me that that's what you wanted it for, hence the comment on communication, But you have to realize that we are susceptible to "cherry picking" and I don't want anything to do with someone that wants a breakdown for that purpose, usually no way for me to make decent money on those jobs.
Doug
Edited 7/25/2007 11:34 pm ET by DougU
I don't see anything out of order with your list of expectations. These things are valuable to know - and of course, that value translates into fees that are (obviously) well worth paying for.
How do you normally structure the amount paid for this extra homework on the part of the bidding contractors? Hourly, or lump sum? Do you pay the same to each bidder, or does it vary on how much homework they actually produce for the project?"...an open mind is a powerful thing. The ability to listen to others is invaluable."
Jim Blodgett
I guess I didn't see the breakdown I asked for as a whole lot of work for the contractors. I just figured it was a calculation they had to go through anyway, to get to the final number. It's been rare that anybody has asked me to pay for the gross level breakdown. Around my area (eastern Mass) free estimates seem to be common and as I said in another posting, if I needed drawings or design decisions I'd expect to pay for design work. But everybody has to try to be reasonable and fair. The problems arise because the customer doesn't know ahead of time if the contractor is a jerk and the contractor doesn't know if the customer is one. If somebody is, no amount of paperwork is going to make *that* job work out well.By the way, I also don't ask for or expect "to-the-penny" estimates on my remodeling projects. To me, an estimate presumes at least 2 things - that the contractor has added in some fudge factor to absorb the small stuff that comes up and that it's just an *estimate* - if he opens up a wall and finds a mess or if I change my mind about something, the price will rise. I don't try to nickel and dime somebody and I get po-ed if they do that to me. I'll never try to hold somebody to a fixed price when the job changes for some reason outside their control but I also expect that they anticipate the "normal" stuff that comes up. (Normal to me is anything under a few percent of the total job cost.) Similarly, if somebody came to me and said he made a mistake and he really needs 30 sheets of plywood instead of the 20 he estimated, I'm not going to try to make him eat it. If I'm close to broke I might scale back the job some other place to cover the new cost tho. But I hate to get a bill that has 1 extra sheet of plywood, 2 lbs of nails, and an extra hour of work on top of the estimated price. That tells me the person either is a poor estimator or he's trying to see what he can get away with.The other thing I should probably mention is that my house is an antique. Every project I've done has had additional costs along the way for unexpected stuff. Usually I was warned in advance about the possibilities and I just swallowed hard and paid the bill. One other time the contractor insisted on a time and materials project only. He gave me an estimate but we agreed it was only ballpark. That was a little nerve wracking for me but it worked out alright. The guy was not particularly fast and significant unexpected stuff did come up but I felt he was being honest with me and I could see results that correlated to the bills he was giving me so I had no complaints.
I guess I didn't see the breakdown I asked for as a whole lot of work for the contractors.
Maybe its not. Or maybe it is. But from my perspective, your approach raises some red flags, and I'll tell you why. First of all, if you want to make sure the subs are figuring comparable amounts, figure those amounts yourself, and include it in the handout you give the sub specifying what they are bidding. A good sub will double-check your figures anyway. But if a sub has to figure amounts for bidding purposes, that doesn't mean you're entitled free access to his math. To me that sounds too much like you are using his free bid to do your homework.
You ask for relative cost of each phase or aspect of the job, because "This helps me spot flaws in my thinking." Again, I don't see where helping you spot flaws in your thinking is something I owe you for free, because you gave me the privelege of bidding on your project. If you want to me to review your project to help you spot areas where the cost/benefit ratio might be disproportional, pay me a consultation fee. Otherwise, don't try to capitalize on my experience to get a free consultation under the guise of a "bid".
You want to know what you ought to do yourself or postpone. Ok, then again, pay me a consultation fee to discuss your skills and strengths, and how they might play into this particular project. Or better yet, hire me to do some work for you. Then if you want to discuss the possibility of future projects, while I'm working for you, great. I figure you like me, like my work, and plan on using me for the next project, but need a little guidance. Heck yeah I'd give you some free goodwill advice. But to a complete stranger seeking a free bid, then wanting me to work up a scenario utililzing his skills? No way.
You say you've run into some contractors who want you to just write them a big blank check - Wow, I've never in my entire life known or heard of a contractor who asked for a blank check. In California that's illegal for contractors. Although lawyers can ask for non-refundable checks for unspecified amounts of work, contractors can't. So maybe the laws are different in Maine? Anyway, I've run into homeowners who think that the privelege of bidding their project is a blank check for free advice, consultation, and guidance. I guess it works both ways.
"...an open mind is a powerful thing. The ability to listen to others is invaluable."
Jim Blodgett
very interesting nobody wants to break down the estimate to the homeowner yet generals want every nail accounted from from the subs
Sounds like you need to get out of tract work - its the same here, but custom, remodel, and T.I. are a different world."...an open mind is a powerful thing. The ability to listen to others is invaluable."
Jim Blodgett
Hold on! Some do. Some don't.
I ask for quotes and I know which subs I can bargain with, and which ones I can't.
I tell them to do the job properly.
I don't count nails, and I even give them to the homeowner "Hey, you paid for them, you keep them."Quality repairs for your home.
AaronR ConstructionVancouver, Canada
I just read your post (#27) and thought "there's a reasonable person I could work with".
A customer that explains themselves, as you seem to do up front, makes it easier for me to help you get what you want...buic
Edited 7/26/2007 3:01 pm ET by BUIC
On new work its often bid by the sq, I would expect to talk about the number of SQs, The price is a lot cheaper but theres also reasons for that, Its usually ready to go a good builder will have ALL the material there, I will not have material costs, No rose bushes to worry about etc, On the other hand with homeowners i dont think in 30 years i ever got a job with someone asking how many SQs, They are asking for there out of work relative or doing it themselfs, Like Hazlett thats a big red flag
Cool. what are you doing next month? :^)
Spider
IMO, the purpose of the "free estimate" hook is just to get a foot in the door and to gain an opportunity to sell yourself as well as to eliminate clients that you don't wish to have.
I have a fundamental rule that the potential customer gets nothing of value unless paid for. I adopted this rule when subbing for a guy who always used measurements that the customer received from other contractors.
When I give an estimate all the information I provide is wrong, except for the price which is only an approximation anyway. I have had one guy take my measurements, order $14K of custom sized windows, and find out that he would have to rip his apartment building apart to make them fit.
Estimates are just estimates, all the important stuff goes in the contract.