Charging For Estimates

Jamcojay

Was curious if this was the norm for residential remodels. How do you justify the estimation charge. Also does the pay for estimating cut into your bid acceptance.

I am not a residential contractor and on a personal note I bid on 50 to a 100 projects a month. Granted the bids are done from my office and not an actual site visit. But I do trade bids through subs where drawing disbursement can be 2 to 5k per bid that is not refundable through client. Just the cost of doing business.

I guess where I am coming from is I think if I called a contractor to visit my home to give me an estimate for whatever and the contractor said no joy unless I paid for my bid. I would immediately think this was a negative way to-do business and move on to another contractor.

Where is the positive side to doing business like this for the customer. Money being tight for home owners do you think that charging for estimates reflects negatively for you?

Like to see some opinions on this

griz

It does make sound business sense to be paid for your time when putting together bids, especially large complex ones.
I have seen it tried by others with no success. Everyone else is offering free estimates.

I have never even heard of paid bids on commercial or public works projects.

On a side note most subs I have used will have a lower price if I just send them to do a job with no formal bid.
It's worked well for me, but I knew the guys real well.

WiaW

Commercial bids and residential bids are two different things.
Commercial is a right off, for the business that you are dealing with, so the cost is not as important. Quality? well if you can get it done as soon as they want it, seems to be not important either.
With residential work, cost, at this point in time is the leeding factor. Quality, is some thing they regret later, and call in a proffesional to fix.
If you try and charge for an estimate in residential, I think you won't get a look in. I am done with price shoppers, so what I do know is go and look at a prospective job, and give an estimate based on the job requirements. If the HO likes the estimate, and want a firm bid, I will charge a percentage of the estimate, and then spend the time to give a bid.
If I don't get the job, I at least got paid for the time. Also in residential, the HO will want to see you. No bids from your desk, sorry.
Good luck with going residential. I was thinking of going back to commercial. Any reason for the slide, or just expanding?

Winchester

For residential:

I don't call them estimates anymore. I charge a fee to do up a detailed proposal with scope of work.

I can tell them roughly over the phone something like "a bathroom remodel like that is typically $10,000 to $20,000" depending on a lot of different factors (including design and material selections). Could even be much higher. I try to tell them a little higher range than I actually think it will be and also use a broad range :P then tell them about my fee if they want to move forward and schedule an appointment.

I use a broad range so they can't use that as an estimate. ("you said you could do it for this much...")

You need to use words like "on-site consultation, proposal, etc" and avoid "estimate". My estimate is my rough estimate over the phone or through email. If you charge a fee for an on-site consultation and then a meeting to go over the proposal, specify a time too. Like a 1 or 2 hour consultation followed by a second appointment to go over the proposal.

I have found that people understand that time is valuable and appreciate your "professional-ness". Some people are offended that we don't offer free estimates, but it definitely weeds out the tire-kickers and ass-wipes and the people you meet are actually serious and your proposal has value to them.

I have only done this a few times, since I've been too busy to meet with people in the past 3 months (and will be for the next 2 months), but it has worked great for me on weeding out the people who waste my time.

Most commercial bids are different. as mentioned above. free. In some cases however, I would treat it like a residential bid.

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buddy110

In my town there's a very succesful, top notch remnodling company. They charge for estimates that invlove any type of drawings. I don't think they charge for a siding estimate.

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shesaremonclus

would you pay your subs to bid on a job

peek-a-boo

been in buis. 17yrs. I recently started charging for bids. BEST THING I'VE DONE IN A LONG TIME. First visit free then a design contract. A simple bathroom could involve meeting 6-10 subs to get hardnumber bid together. Gas at 3.00 plus a gal!!! It also weeds out the people looking for a deal the only deal is unlicened peaple in our trade. All the projects I've used this method on have turned out great. Getting paid to get the customer what they want and a budget their happy with before you start demo. In the end everyone wins you paid for all of your time and customers can't complain to friends and family that there contractor had cost overruns that they couldn't pay for. GOODLUCK

carolinahandyma

I do primarily residential work and don't charge for estimates. I do charge for consultations if I go out to a site and do a lot of telephone consultation for no charge.

Much of what a residential customer is after in getting a 'free estimate 'is to meet someone face to face which weighs greatly into their decision to hire. The homeowner is trying to ascertain things like:
-Is the contractor personable, professional, and knowledgeable?
-Can I work with this person/Do I want this person in my house?
-What is the value this person brings to the price they charge?
These are some of the questions homeowners are trying to answer.

With commercial it's mostly about the $'s.

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Jamcojay

Some clarification I would never pay a sub for a bid. What I do on a regular basis is ship them drawings to bid on. Average cost for shipping and printing of scaled drawings can be anywhere from 2 to 5 hundred dollars. In the early days it was much more. But more contractors are purchasing their own repro printers or can download them from are server and have them printed.

I am not really moving into doing residential stuff. Since we are a National Contractor and never do anything locally. I was curious if we created a service division on a local level. What was the best way to go about handling job estimates? I know homeowners can be tricky and almost unsatisfying to deal with. I know I am unpleasant to deal with when my own men work at my home.

I was also curious where a charge for proposal help would your bottom line and if it reflected negatively on your business.

mdurbahn

i would just call the next guy if someone wanted to charge me for a bid.

Greg Di

Sounds like you paid attention in class, grasshopper.

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Leo G

I charge $1 for my estimates. I tell them that before I come and it actually weeds out a lot of tire kickers. If you aren't interested in parting with $1 for me to come over to your home and do an onsite consultation then you are not worth my time.

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naptown CR

I would give a free estimate in the same sense that Winchester will give one.
What precisely is an estimate?
Isn't it an approximation of a quantity or cost based on prior experience or knowledge. Look up the definition in the dictionary.
There is no mention of site visits, drawings, helping with selections of materials, writing of proposals etc.
I will make one visit to meet the client that is free but from there out they pay for my time. As Winchester said it weeds out the tire kickers. And think about this, you spend time gas tires brakes oil etc driving around giving free estimates. Who pays for that certainly not the people who wast your time but the ones who actually do business with you. Is that fair to them?

custrel

Well, it might not just be tire kickers that you are weeding out.

At first I thought your policy was pretty telling about home owners and I told my wife about it.


"Can you believe it honey? He's only asking for one dollar and the people never take him up on it!"

"I'm not surprised," she said. "I wouldn't take him up on it either. I'd get someone else."

"Why's that?" I asked. "You don't think you should pay for estimates?"

"It's not that," she said. "But asking people to pay "one dollar" for an estimate is just weird."

Leo G

Funny, I have plenty of work.

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custrel

Ball park over the phone. Charge for proposal in person. I like it.

custrel

I didn't say you were weird.

But if that was one person's reaction, the decision to refuse to take you up on your dollar estimate might not be solely based on cost.

In fact, you might even be selling yourself short with that shtick. If I were going to get an estimate on a kitchen remodel, which I knew would run me $30-50K, I'm not sure how seriously I would take a contractor that told me he was going to charge me a buck an estimate.

Trim40

Lately, if I got a buck for an estimate, I would be doing pretty good.
Too many with champagne taste and kool-aid pocket books.

shesaremonclus

does the realtor charge for each time he show a property, its his time and gas. Would you pay the repair shop $45.00 to tell you they will charge you $800.00 to do a repair that may cost you $600.00 elsewhere. Does the insurance agent charge you to prepare quotes on your insurance needs. Then why would you not pay a sub to prepare a bid for you, you just charged the HO for your estimate and you even might not be getting you hands dirty.

woodchuck2

I havent been charging for estimates but lately i have been rethinking this due to our economy. Alot of my jobs are fairly small so its not so bad but when i have to make 1-2 trips to the job and spend several hours working on figures and phone calls just to have the customer go with someone else then how does my pocket get compensated. If i get the job great, then i wont charge but for these folks that go with someone else after giving me a run around need to compensate something. Yes, a car dealer does charge a diag fee without working on your car unless it was already there for something else. This way the Tech is paid for his time if you chose to take the car elsewhere for repair. Hell, with a car you are taking the job to them in the first place for the diag/estimate and you are paying for it. When was the last time a customer brought their home to you for an estimate and paid you for it? Yet we are expected to drive who knows how many miles which is also time, spend time looking at the home/prints, discussing what needs to be done and what they want, go over payment arrangments and then go back to home/office to make phone calls, write up an estimate and either call/fax/mail/or deliver personally the estimate to the customer with no reimbursment at all. Since when do i owe someone my time and wallet?