ECN Forum Forums General Topics of the Trade Business Related Discussion Holmes on Quotes and Contracts

Many times I have had the thoughts of writing a book about what I see and deal with everyday....but, I feel most would not believe.

My sister always thought about writing a book about her experiences in Nursing.
She told me that we could all write books about what we do but we'd have to catalog them all as 'fiction'...because nobody would believe the stuff we have to deal with.

LOL

A friend is a roofer. I argued often that he was putting far too much detail and data into his [free] quotes- [he built 2 roofing jobs for me and I make his bespoke roof windows]. He stopped when it came to light that at least two clients had used his detailed quotes to source cheaper labor and materials elsewhere - on the basis that all the planning work had already been done, they could source special offers from his lists and employ amateurs!

I opened this thread putting forth the published opinions of Mike Holmes. Whatever else you might say about Mike, he's a real contractor with a real business, so he is certainly qualified to speak.

I had other reasons as well.

One is that I have seen comments like Alan's here several times, and Mike's is directly opposite.

Now, as I am in the customers' shoes, remodeling my house, I need more from the contractor than just a dollar amount. It's not that I'm looking for a shopping list; rather, it's that I need to know if he's pricing by using a Yugo or a Porsche.

Bid details will also identify the scope of the job, possibly underscoring where there are misunderstandings, and clarifying who is responsible for what. For example: is that a high efficiency furnace or a standard one? Does the price include a cememt pad and steel cage for the air conditioner? Etc.

Case in point: Adding a new window. One guy wanted $1000 more than the other. Care to guess which one included the framing, and which one simply planned on slipping the window into a hole made by someone else?

Another point shows the difference between home inspections, usually performed by private-party HI's, and a "Holmes inspection" documenting evidence of inspector negligence during the charitable-foundation remodel.

The viewer is shown the empirical incompetence of Home Inspectors in North America, who repeatedly fail to provide any negotiating leverage before buyers purchase these residential train wrecks.

If sellers wait for the right buyer to miss the defects and pay cash, mortgage insurance is also avoidable, and no record exists of any previous failed inspections when performed by private HI's.

What Holmes does not explain, is how buyers can convince sellers to let city or fire-marshal inspectors (AHJ) on premise after private HI's find problems, so public records and corrections are enforceable.

With public-budget crisis taking cue from the private sector, and eviscerating labor and experience in building departments, the superior experience of the AHJ inspector may also become less clear.

Getting, perhaps, back on the topic of quotes ...

I had an interesting chant with some folks yesterday. While the 'technical' part of the job involved replacing a roof, the story brought up some points regarding quotes.

Just how do we arrive at our pricing? How do we present it to the customer?

Now, I'm accepting the story at face value, only because it underscores these questions. The Story:

Bruce contacted R&R Roofing (Names are not actual names) to replace the roof on his 1960 ranch house. For Bruce, this was an 'insurance' claim, where the insurance company would reimburse him directly. Price quoted was $8000.

About the same time, Mark called R&R for a quote on replacing his roof. Oddly enough, this was also a 1960 ranch house, just a few blocks away from Bruce. Mark, a retired man, was paying this out of his pocket. Quote was $5000.

Then came a holiday weekend. At the family BBQ - Mark happens to be Bruce's father in law - the two discovered they were both looking to replace their roofs. They also noticed, for the first time, that their houses were exactly the same, except that they were mirror images of each other.

As you might guess, they were a bit puzzled at the large difference between the quotes.

Bruce called R&R and protested; R&R offered to cut maybe $200 from a quote that was $3000 higher than what had been given for Mark's roof. Bruce, naturally, found someone else to do the roof for $6000. That's still more than Mark paid, but much closer than the price R&R had given him.

Let's sum it all up. Here are the priced for the SAME roof:
$8000 for Bruce, from R&R
$6000 what Bruce paid someone else
$5000 For Mark, from R&R

Now, that's quite a spread.

Why?

If there were differences in the roof conditions, or the material choices, R&R failed to explain this to Bruce. Even finding a 'math error' in the low bid would have reassured Bruce. As it stands, Bruce is convinced that the only reason for the higher price is that he had told the guy he had insurance.

As for R&R .... just HOW did he arrive at his prices? Did he simply make a guess, or did he have some sort of method? Surrounded by tract homes, and having been in business for quite some time, R&R ought to have a very good idea as to his expenses for replacing a 'standard' roof.

So ... coming full circle ... how do you arrive at your pricing? How do you present it to your customer? What would you say if a customer responded "You quoted my Father in law half of that?"