Is this out of line?

[Farmboy1]

Originally Posted By: Farmboy1

Originally Posted By: 11-87

Just Curious.. If a contractor works by the hour What is the Current Rate?

I bill my Carpenters out at $50-60/ hour and my Laborers at $40-48 per hour. My rates are based on complete insurance, all fringe, and my overhead.

Not to get into specifics since it is not really anyones business, but to pay for fringe, insurance and benefits, it costs me about 2.5 times what they see on a paycheck. If I pay a guy $20/ hour ($41,600 / year), he costs me $50 per hour. I have some higher payed more experienced guys, but I also have lower paid less experienced guys that average it out.

I will problably lose money at this next year since my workers comp. insurance went up 4.5 times.

[Juneau4]

Thankyou, I appreciate your answering the way you did and it gives me a better understanding of the labor charges on certain work I have had done.

[sparcebag]

Wow farmb in my day not too long ago I thought it was exceptionally high at 2 times a wage! I thought it couldn't go any higher or busisnesses would start to falter!

[Farmboy1]

That is what we are struggling with now, we realize we cannot increase our costs, but then we take a hit on every man hour worked. Maybe just growing pains, but with insurance rates and taxes steadily increasing, it is the small businesses that pay the majority of this, and the small businesses that suffer the most.

We will be just fine in the long run, but this economy is going to hurt us for a while. I did read in a trade magazine that they expect 2/3 of residential contractors to be out of business in the next two years.

This is what really hurts when "trunk slammers" provide bids on a project. They have no insurance, or fringe, and problably pay their guys cash so do not have any payroll taxes. How can a contractor compete against a guy who charges $25 per hour and provides nothing to his employees? I know I have better service then that guy, my customers have safety knowing they will not be sued if something happens, and I provide a warranty on all services rendered, but to many people, it is simply dollars and sense on the quote. Sorry about the pun, couldn't resist.

[Parker]

I've been watching this for a couple days. Thought I would provide a consumers perpective.

I recently had my homes siding and roof redone due to storm damage. This is in the cities. I also am taking bids on some work that I need done up on the range. For both jobs, if someone said that they required a fee to offer a bid I would have said, "thanks, but no thanks." Admittedly, I was, and still am price shopping. I have absolutely no qualms about saying so. I've provide the requirements for the job. I think I have every right to see what is a reasonable fee. How else is a consumer supposed to know what is reasonable without getting multiple bids? How else would someone suggest that I know if I am getting ripped off or if I am getting a fair price? We price shop for every other good or service. I am surprised that this is seen as so unique. I realize there is a cost to providing a bid, but I think consumers see it as a cost of doing business.

One last comment. The bids I've received up on the range far exceed comparable work I've had done in the southern part of the state. At this point, it is cheaper to hire the same crew I had do the work on my house, bring them up to the range for a week (they are all willing - good fishing) and do the work than to hire someone local. And trust me, I would MUCH rather hire someone local, but I am not going to pay more money just to give a local guy a job.

[BobT]

Quote:

At this point, it is cheaper to hire the same crew I had do the work on my house, bring them up to the range for a week (they are all willing - good fishing) and do the work than to hire someone local.

I've considered suggesting that my mother-in-law do the same thing for similar reasons.

Bob

[Surface Tension]

At $75 a bid, I could bid high and make a living without picking up a hammer. I believe your M-I-L picked a roofing contractor that has a different theory as to how they do business.

That is not the norm.

First the phone has to ring, there aren't many contractors out there that would mess up a chance to come out and bid. It is their chance to make contact with you and sell themselves.

I get sales call at least twice a year from a National siding contractor to come out and give me a bid on siding my house.

Not interested? They'll give me my choice between a set of Cutlery or Gas grill just for letting one of their salesmen come out.

While that bid seems high I can't say without seeing the job and whats specified in the bid. I'd definitely get more bids and you won't have to pay for them either. Of coarse if there are allowances for rot, vents, soffit or fascia repair or replacement ect,ect then those bids need to include that.

[Farmboy1]

I also am taking bids on some work that I need done up on the range. For both jobs, if someone said that they required a fee to offer a bid I would have said, "thanks, but no thanks." Admittedly, I was, and still am price shopping. I have absolutely no qualms about saying so. I've provide the requirements for the job. I think I have every right to see what is a reasonable fee. How else is a consumer supposed to know what is reasonable without getting multiple bids? How else would someone suggest that I know if I am getting ripped off or if I am getting a fair price? We price shop for every other good or service. I am surprised that this is seen as so unique.

I guess I will have to disagree on shopping for every good or service. Construction is a SERVICE, it is very difficult to shop comparable services. We (our company) have made our reputation by providing a superior SERVICE. I do not try to compete with guys who can come in and do it cheaper and faster because I and my customers realize the inferior product they will be left with.

It is well within your rights to price shop for the best price. As a contractor I do as well, but when I do, I spend the most of my time confirming that my bids are apples to apples. This means they are using the same materials, time schedules, high quality workforce, and skilled estimators/project mangers. I will pay a premium for this, and I have no problems doing it.

When most uninformed or underinformed people price shop construction, they fail to take into account many important factors. Exterior siding, roofing, soffit and fascia vary greatly in quality. I can maintain my labor costs and provide an inferior product if I want and make more money. I choose not to do this, but there are many who do, and do it well. You are then left with a tailgate warranty, when the tailgate closes, there is no warranty.

There are also differences in codes between municipalities, something TC contractors may not know when working "up north".

I would not, and will not charge for quotes, but the company I used to work for would on residential quotes only. They eliminate wasted time, and can therefore put more time into each quote. This helps being that most residential jobs do not have specifications, drawings, or very much information and the estimators needed to prode clients for additional information. Most trade publications I read are pushing for this more and more. I think it works better for high end construction (not price point), but think it will be the way things work in 20 years.

[Tom7227]

I've read this entire forum and find it interesting. I do most of the work myself around the house but on occasion have had to hire some out.

In my experience most people don't know the difference between high and low quality. I have had countless co-workers come and ask me questions because they don't have a clue other than they need to re-side the house or get a new furnace. Even though they're going to spend thousands of dollars not many are willing to spend a couple hours learning something about the project.

IMO here's where getting a couple three contractors out can really make the difference. First of all it's a learning lesson - each meeting will teach you something about what needs to be done, the various material choices you can make, and if you're observant something about the company. Some doof with pucca shells and a free knife set has zero chance of getting the job and frankly is going to get packing within about 30 seconds of getting out of the truck. A good contractor will educate a buyer and hopefully that person will start to see the benefit of not simply looking to the bottom line.

But this is true of just about everything isn't it? Buying a lawnmower, a car, or a mortgage - you have to learn the differences to make an informed decision. I should think a contractor would make this part of any bid presentation.

I also just can't help but respond to Sparc's wow it only used to be 2X the salary. Sparc, that was back when construction guys were all unionized and were making top buck. That was before Workers Comp and every other type of insurance cost an arm and a leg. Them were the 'good old days' - to some at least.

[sweept]

Farmboy what area of the state are you from?

[Farmboy1]

Farmboy what area of the state are you from?

I work in the Rochester area.

[Coach1310]

Interesting thread. It really brings to light all the "extra" costs contractors endure on a daily basis. The one thing I will add is "just because they are cheaper doesn't mean they do poor work and just because they are more expensive doesn't mean they do better work."

Like many have said, get referals. Ask to see other work they have done. Doing a little homework and getting it done right is a lot less hassle then dealing with problems along the way and afterward.

[minneman]

We (our company) have made our reputation by providing a superior SERVICE. I do not try to compete with guys who can come in and do it cheaper and faster because I and my customers realize the inferior product they will be left with.

Farmboy, your kidding right?

[drowned minnow]

Been keeping track of this thread....and seems like all thoose who think estimates should be FREE should go learn the trade then go into business and then report back on how much time was invested and how much money was spent for FREE estimates and also how much FAMILY time was sacrificed because the potential customer can only meet you on the weekend or after they get off work or do not show up at all...or your the fifth estimate and I"ll get back to you....charge for estimate then if awarded the job, credit that amount back to the job...thoose are terms that both partys should be able to agree on.

[JeffB]

I think those who have earned a good reputation by doing quality work in a fair and timely manner gain a lot of advantages like being able to charge a little more for the bid and charge for an estimate. I'm no expert since I am not a contractor like many of you, but after recently building a house I know the contractors reputations were very important. I wouldn't have thought twice about paying a small fee for a bid from the top to contractors on the list.

[Farmboy1]

Originally Posted By: Farmboy1

We (our company) have made our reputation by providing a superior SERVICE. I do not try to compete with guys who can come in and do it cheaper and faster because I and my customers realize the inferior product they will be left with. [/quote

Farmboy, your kidding right?

Nope. I try not to bid on stuff that is open for public. Too many change order artists and guys who will cut their own throat to get a job. I do 90% of my work for the same customers who do not price me out. They know what we bring to the table. That is not to say I do not do it as cost appropriate (not cheap) and fast as we can, but I include items not shown on plans that are known will be needed, and do not walk in the door with a CO in my hand.

I also provide my customers with any money back to them at the end of a project that we did not use. I show my markup, and have no problem making what I show. Making an extra $1,000 on a job this year is not a big deal if I am not working next year.

IMHO this is why so many public bids are trying to get away from low bids and are going to a best practices policy (think of the 35 bridge). They are not tied into the lowest cost, and possible inferior product, but have a list of qualifications that need to be met before they award the product. Olmsted County (Rochester area) is just starting this process after receiving numerous "duds" over the years. University of MN is only using this process now, and more will use it in the future.

I will leave it alone from here out. It either makes sense, or it does not, and I will not change any opinions.

Just a heads up to the original post. Certainteed has increased it's pricing again by 10%. This puts a square of shingles to $115.43 after tax. Good luck.

[BobT]

Been keeping track of this thread....and seems like all thoose who think estimates should be FREE should go learn the trade then go into business and then report back on how much time was invested and how much money was spent for FREE estimates and also how much FAMILY time was sacrificed because the potential customer can only meet you on the weekend or after they get off work or do not show up at all...or your the fifth estimate and I"ll get back to you....charge for estimate then if awarded the job, credit that amount back to the job...thoose are terms that both partys should be able to agree on.

See my earlier post about how much can be spent doing quotations. Any contractor that thinks it costs money to drive 20 miles to look over a roofing project doesn't know what costs are by comparison. I expect that it cost our company well in excess of $10,000.00 to bid that job. Our air fare alone was nearly $5,000.00. We didn't charge for the bid up front but we made sure our bid covered some or most of the cost. Naturally, the bottom line still requires us to produce a profit.

Bob

[hanson]

Bob-

I fully agree with you.

If I ever have a contractor want to charge me for an estimate, that'll be the end of that contractor's possibility of working with me.

Its absolutely a marketing cost and it is up to that contractor whether or not they want to provide me an estimate. I would think a couple quick questions on the phone could rule out the tire kickers. A little prequalification would let you figure out which jobs are worth bidding and which aren't.

In the architecture business, we end up bending over backwards to get jobs. Responding to RFPs, doing presentations, interviews, and travelling long distances to meet with potential clients. Guess what... its all overhead.

Same holds true for commercial contractors who are publicly bidding jobs. You might spend 5-10k dollars and a months worth of time to bid a job with no guarantee that the job will be yours. Gotta sharpen the pencil and present the best number possible.

[sparcebag]

Bob-

I fully agree with you.

If I ever have a contractor want to charge me for an estimate, that'll be the end of that contractor's possibility of working with me.

Its absolutely a marketing cost and it is up to that contractor whether or not they want to provide me an estimate. I would think a couple quick questions on the phone could rule out the tire kickers. A little prequalification would let you figure out which jobs are worth bidding and which aren't.

In the architecture business, we end up bending over backwards to get jobs. Responding to RFPs, doing presentations, interviews, and travelling long distances to meet with potential clients. Guess what... its all overhead.

Same holds true for commercial contractors who are publicly bidding jobs. You might spend 5-10k dollars and a months worth of time to bid a job with no guarantee that the job will be yours. Gotta sharpen the pencil and present the best number possible.

Thats right and alot of those public jobs are pay a nonrefunded deposit just to bid!

I believe thats to show sincerity,integrity and capability

[Parker]

Looks like we have a difference of opinion. Some contractors think they should get paid for bids and consumers think the bidding process is the cost of doing business. We'll see which view wins out in the long run.

I am a consumer so I am biased. No way I'm paying for a bid.

[croixflats]

There is no way I would expect a client to pay for a bid.

But being in landscaping if I have to draw up a design plan you bet they are paying for that. I have seen it many times where the costomer has multiple bids and goes with the lowest bid and pick and chooses over simular costing plans. I would be out 2 to 4 hours of labor and they would get a free plan off my efforts.

[sparcebag]

I foolishly ran into that many times! Being a good guy and they ask can we have a copy of that,SURE being nice hoping to get the job they'd get a copy.Then I find out their doing it them selves with plans I drew that were used for a permit.

Detailed plans were NEVER used again! But it took a few times for me to learn.

[BobT]

My mother-in-law stopped in yesterday on her way to the airport as she's traveling to IL for a few days. I asked her what she got for her $75.

Now, bear in mind that I haven't seen the proposal myself and she very likely doesn't have a clue about what is really on it but from her description I got the impression that she basically received a document with a price. No materials estimate, no labor estimate, no disposal or cleanup costs, no start date, and no idea of how long the job will take. Incidentally, my wife has corroborated this.

A thought has occurred to me. If she paid $75 for an estimate, should she not also have received a real estimate? This is a proposed contract between the contractor and she.

If a contractor actually provided a client with a written complete estimate as I would expect, then I believe I could support the idea of paying for the estimate. The reason I say this is because now the customer could take that same contract minus any pricing and offer other contractors an opportunity to bid the job based on the estimate. These other contractors, not having to take the time to write up the proposal, could now be able to make an offer allowing the opportunity for comparison shopping.

At any rate, it's a good thing I live 200 miles away or I know that contractor would be getting a visit from me. In my book he owes her an estimate that is complete and precise. She deserves to get her $75 worth and I'm sorry but his logo on a piece of paper with a dollar figure just doesn't cut it. It's too bad she already paid him. Were it me, he'd have been run off my property and perhaps I'd have charged him $75 for parking his truck.

Bob

edit: Can you tell I'm really beginning to lose respect for this contractor?

[Parker]

...which shows that paying for a bid is a seen by consumers as a scam.

[sparcebag]

Call some contracters,Question them, find one who's chemistry you approve of,Ask for a bid after YOU approve of the person and their way of doing busisness.