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Discussion Starter · #1 ·
Back in May I put in an estimate to replace the back sill, two sliding doors, a 72' PT deck and install vinyl siding on a single level ranch. I got a material quote from my supplier did the estimate up and sent it to the client who said they liked it and they would like to use me but were waiting on a home equity loan. I told her once the home equity process got started and it looked like it was going to happen give me a call and we could sign a contract. My estimates are good for 30 days. After almost three months I got a call and they would like to move forward. I called my supplier and materials have gone up some but not outrageously.

The problem becomes I went back and looked at my estimate and I must have been starving when I did it because it is low, really low. I must have missed something, because there is no way I can make money with the price I gave them. Do I simply tell them I will have to redo the estimate, send it to them and see what they say? I would hate to lose the job or start it on the wrong foot but I also don't work for free.

Any input is appreciated.
 

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If quotes good for 30 days, remind them of that. Tell them you're busier now and you'll need to revise based on your current workload.

I hate going back and looking at old estimates. It makes me cringe everytime.
 

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I'm The BOSS
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You might as well refigure your estimate and present it to them.
Explain the 30 days have passed and the increased cost is do to material prices and the currant workload.

good luck, at least you caught it before starting.
 

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Particulate Filter
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Contracts require offer acceptance and consideration. You gave an offer, they did not accept nor to did you accept consideration. I say if you want to say things have changed and have a new offer then do it. They may not like it but I think they would have a tough time in court.
 

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Thom
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I wouldn't phrase it "current workload". They will think you are gouging them because you can. Instead tell them, at the time you made that bid you were out of work and willing to work for no profit, pay the overhead yourself, and work for substandard wages. The construction economy has picked up a bit, though you are still working cheaper than you would like, you are no longer covering the overhead out of your own pocket nor are you working for sub-standard wages.

Remind them that in addition the other costs of the job have increased. Material prices are higher.
 

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thom said:
I wouldn't phrase it "current workload". They will think you are gouging them because you can. Instead tell them, at the time you made that bid you were out of work and willing to work for no profit, pay the overhead yourself, and work for substandard wages. The construction economy has picked up a bit, though you are still working cheaper than you would like, you are no longer covering the overhead out of your own pocket nor are you working for sub-standard wages. Remind them that in addition the other costs of the job have increased. Material prices are higher.
I would never make it sound like I was desperate enough I work for no profit.

Pricing is heavily dependent on timing. Most people will understand that.
 

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Discussion Starter · #8 ·
Thanks for the advice everyone. I am going to talk with them about it and see, hopefully we can come to a compromise. I would rather sit at home not working though then run the risk of losing money. I don't run my company that thinly.
 

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For a middle income family that just went to the bank and got all their ducks in a row......dont be surprised if they get another remodeler..I sure as hell would. Material prices on the job you're talking about aren't that much different. They trusted you with their finances...stupid them huh?
 

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I say give them the new estimate, and see what they say. Answer their questions, but don't over share your information with them. Obviously they will have some questions, but if you are honest with your answers (not oversharing) you will likely bring this one home.
 

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Fence Builder
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This happened to me this week. Did a 1600 square foot basement frame in in February and quoted the trim at the same time. Client called me last week wanting to get the trim rolling and when I requoted it came to over twice the cost I originally quoted. They added in some extras, I did a great job framing and they wanted me to do the trim. I called them up, explained the situation as well as the fact that they added some extras and they understood and want to pay the additional cost. It's ALL in how you deal with the client. Be humble, own up and explain in truth what happened and that you can no longer work for the previous quote for x reasons. If your client can no longer afford you it is their right to not hire you. On the same hand You also can't afford them, thank them for the opportunity get over it and move on. They have family to feed and you do too. Hope it works out for ya
 

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Doesn't sound like you're committed to anything, morally or legally, so that's good. There really isn't an easy out, explain to them that you may have misunderstood the scope of the job at the time and go over the job with them again. People are usually pretty understanding if you are straight forward and honest with them.. especially if you haven't started yet. They may not use you, but they won't shoot you either. I absolutely would NOT tell them i was too busy for them now and if they want me they'll have to pay.
 

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Any significant price increase will probably not be taken well if I know people, regardless the reason.

You could tell them that you gave her a winter rate, summers are when most people want projects done and winter is slower, thereby lower rates. Many motorcycle shops do that. Probably boaters too.
 

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Focusing on solutions.
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For a middle income family that just went to the bank and got all their ducks in a row......dont be surprised if they get another remodeler..I sure as hell would. Material prices on the job you're talking about aren't that much different. They trusted you with their finances...stupid them huh?

None of us like working for no profit, but as said above, you built trust with this client. Your current plan, shows you're not a man of your word & that you're not to be trusted.

I don't like working for fee anymore than anyone else, but sometimes it's the cost of building a long lasting clientele.

Personally, I'd go to them & explain just what you explained to us & base my decision on their reaction.
 

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For a middle income family that just went to the bank and got all their ducks in a row......dont be surprised if they get another remodeler..I sure as hell would. Material prices on the job you're talking about aren't that much different. They trusted you with their finances...stupid them huh?
It's Maine - there are only so many months to get things done outside (it comes close to shutting down for this type of work during the winter). The smart HOs know this and will be looking at signing contracts in January / February for work to start in the spring. First ones scheduled usually get a better price.

Anyone who is good around my area is most likely booked through October by now, but that really varies by location.
 

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Discussion Starter · #17 ·
I will be the first to admit it was a botched estimate in the first place. It was a referral and I just threw something together quickly. Now that they are looking at doing the work and I've looked at it more closely, as well as had them add and change some things I am in the situation I stated above. Hdavis, same thing happens where I am. I am booked out to end of Oct. but could bump some things to fit this job in.

To answer the question on %. After you take out the add ons and changes it is 16% increase. Basically my profit margin, which is why I would be working for free. Materials, disposal, overhead, labor, taxes would get paid at least.
 

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Grampy
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Just be honest, explain that you missed somethings as well as the materials cost. and the new price will be "***XX" Business is Business.
 
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