Last week we completed a roof replacement for a man. We originally gave him an estimate of 17 SQS at $125/SQ. This estimate was used by the insurance company (storm claim) and they did not send an adjuster out to confirm the measurements.
When we started tearing off the old roof, we discovered a second layer of roofing over most of the roof area. I showed him, told him it was 12 SQS, and it would be $35/SQ extra. He called the insurance company, who sent an adjuster out to measure everything. I did not measure the roof, only eyeballed (and figured in a PITA figure since the second layer was roll roof nailed 2″ OC). He verbally approved it, and away we went.
We finished, he was happy, and we were paid in full. He also received a line item invoivce (identical to the original estimate) that stated what was done, quantity, and total price.
Today he received the adjuster’s report, which stated the original roof was 15, not 17 SQS, and that the second layer covered only 6 SQS, not 12. He called irate and demanding I not only refund him the difference for the extra SQS of second layer, but also for the 2 SQS of replacement roof (15 vs. 17) I tried to explain to him that although the actual roof may only be 15 SQS, I had to use 17 to replace it (waste, ridge caps, starters, etc. so that is what I charged for. I ended by telling him, “Whatever man, I’ll send you a refund check” just to get him off the phone.
I’ll add this customer has been a d–k since the getgo (We also built a shop for him, underwent numerous changes that we weren’t paid for, and also fixed several things on the roof that we didn’t charge for.) I also gave him the roof at $125/ SQ vs. today’s price of $140/ SQ, even though he received a contract containing an escalation clause that I could’ve used.
I’d like to know who is in the right? Since he didn’t wait for the adjuster’s report before approving the work (and paying for it), is he truly entitled to a refund? It seemes to me that we overbid the job, he went for it, and he paid us for it. A little extra money in my pocket for all the money I lost on the shop, as far as I’m concerned!
EDIT: Oh yeah, he wanted to know if he could get a refund for difference of what I charged per SQ for the additional tearoff vs. what insurance was paying him ($35 vs. $26). I let him know real quick that I don’t give a s–t what he gets paid, I charge what I charge!
Jason Pharez Construction
Framing & Exterior Remodeling
Edited 2/9/2006 2:54 pm ET by JasonPharez
Replies
The first thing I ask a client is, is this an insurance estimate? If they tell me that it is, I tell them I do not work for the insurance co., that I work for the client, and the contract is with the client. Insurance companies just flat-out pizz me off, and I refuse to work with them.
If you have a signed contract and job change order, I don't think there's anything he can do. If you overestimated the job (eyeballed it with a very large magnifying glass) then you might consider refunding some.
On the other hand, it sounds as though you got back a little unpaid work from previous jobs, and if you don't intend to work for him again, you might just tell him to pound sand. Of course, he might diss you to any potential clients (shooting your referrals in the foot), but then, he might anyway.
I've refund some to a client when I estimated working on the project solo, but my son helped and we cut the time in half. So I refunded some, and got a bathroom remodel the following year for my trouble.
Good luck. Sucky clients make for a bad day sometimes.
"I am the master of my fate, I am the captain of my soul." Invictus, by Henley.
Nick, his insurance agent is MY agent. I've done work for the agent and his entire office staff. They know I do above average work at above average prices. Beyond that they know I am fair and honest.
I've often given credits to the client if we come out way WAY ahead, finish in half the time, or have two or three squares left over. Unfortunately this is the second time this "givingness" has bit me in the hind quarters. It's a shame that for all the good things I try to do for honest, understanding clients, there's a few who just nickel-and-dime you to the point where you're always on the defensive, and you say so explicitly in your contract.
As for him "dissing" my reputation, oh well! We've got too many good customers, and besides, after Monday we'll be new-construction only. Builders want WC and GLI certificates, not referrals LOL.Jason Pharez Construction
Framing & Exterior Remodeling
I agree with david and dustin. But where I really see a problem is you eye balled, shot from the hip, guesstimated the job knowing you would be paid by an insurance agent that would measure, dot his I's and cross his tees and the two may not be the same.
Further you made the decision to work for a jerk again and to do extra work and not recieve payment for it. Frankly I think you set yourself up for the grief all the way around. And finally you told the guy you would send him a check to get him off your back and now don't know if you are going to or not.
You seem like a decent guy but frankly from everything you said here I wouldn't do business with you. Not because I don't think you mean well or are out to cheat anyone but by being this inacurate and telling people things you don't intend to do you make yourself out to look like you are. I tell my customers exactly what I they are getting for how much. If I do something for free I note it on the bill and list it as "no charge". I also don't itemize my billing to that degree for just this purpose. Just give a price both on the quote and on the invoice.
And don't under any circustances tell a customer (whether he is an AH or not) that you are going to do something when you aren't. DanT
Dan
I agree with some of what you said, maybe not your delivery but your info is right on!
One thing I'm curious about, and I planed to start a thread on this in the business folder but I'm waiting to finish up the job before I do. If you don't itemize to a high degree then what keeps you and the customer from being confused as to the scope of work to be preformed?
eg. I'm installing a kitchen, the GC is taking it upon himself to make some decisions that I don't think he should, one that happened yesterday, he's having the electricians install the switch for the disposal on the face of the sink cabinet, right on my fake drawer front. I ask about putting a switch on the counter top and he says that would cost to much and I tell him to pass it on to the customer, he says that he cant because he bid the job with all the electrical, cant go charging for different things now, I tell him I think he's wrong and we leave it at that.
How do you, or should I say, how would the customer know what is in the scope of work and what constitutes a change.
I'm curious and that's why I planned the thread in the business folder to help me better understand this.
Sorry Jason for the hijack, oh, send him the money, you said you would, keep your word!
Doug
When we do kitchens we do the whole thing. So that issue is a non issue for us as we simply ask the owner where they want the switch and put it there. I am no help at all am I lol?
In my quotes I put down that verbage like this
Full <!----><!----><!---->Bath<!----><!----> Remodel:<!----><!----><!---->
We will provide the following:
Demolition and removal of old bathtub and faucet assembly.
Prep walls and shower area for tile.
Prep floor and lay underlayment for tile.
Set new cast iron porcelain coated 5” tub.
Install a new Moen Chateau Series single lever chrome faucet.
They know what I am going to do and what major products I am going to use. I don' t give measurments or amounts or man hours etc. The last line will be "this work will all be done for a price of $4,500.00."
I charge enough to cover any minor issues and do so. At the end of the job I list those items and state in the dollar column "N/C'. This way they recieve a little perk and feel good about it and I get a little credit for it. Any new request, unusual condition they get a written change order and we don't proceed without it. I will make up to a $50 change without permission to keep the job going if it needs to be done to keep the job flowing but nothing over that.
I see this all the time. Guys get up on a roof or in the middle of a kitchen and do a few "good deeds" and expect the customer to know what they did be really appreciative of the effort. If you are installing a new floor and decide that the trim should be pulled and re set in order to look good, and it is an item you didn't account for, so you do it anyway. You can't expect the customer to appreciate and be grateful for your effort. They wanted a new floor that looked good and that is what you quoted and that is what they got. So why should they be more grateful than before? You missed it and had to fix it.
Same with a roof. You quote a roof and get up there and find a few small items that add a couple of hours to the job. You do it anyway. When the homeowner questions your numbers, the ones you gave him, you blurt out about all the extra things you did for him. He goes out and looks at the roof and thinks " I wanted a new roof and that is what I got, where are the extras?" They don't see it, they see the final package because that is what you quoted and that is what they see they got.
Do I think there are jerks out there that screw us around and try to beat us out of money? You bet I do. And this guy sounds like one of them. But my point is and was that when you don't set yourself up to win, you won't . We can all sit around and say that it shouldn't be that way or that most of my other customers don't act like that but there is always the one that does and when we leave ourselves open we get screwed. Sometimes we do anyway. But coming back to the guy after he questions the job and trying to play the "what about these items I did extra" is no defense.
My answer to your question as to how are we on the same page with the HO? We ask. We work for homeowner 98% of the time. We make a list of items that need answering and either leave a list or call or stay until they get home. Usually the list works best as they can look it over and talk it over that evening with the spouse. Do we move something once in awhile because they didn't like where we put it? Sure but that is figured in the deal.
I personally would have not made the call your GC did because there is no going back withour ordering a new cabinet front. I would ask the homeowner or taken the route you suggested. But frankly if he low bid the job as many do he spends the job searching for ways to save instead of ways to please. For us and the method we use the worst customer we generally have is one that figures we will do little stuff and not say anything so they come up with a new one every day through out the job. Fortunately we don't have that often. DanT
Low Bid The Job And You'll Be Searching For Ways To Save Instead Of Ways To Please
I think I just found a Header for my estimating worksheet.
Thanks,
SamT
Great post.
Over the years I cannot think of a single high estimate that I've regretted. The happiest customer gets the job done with a few extras thrown in and the final bill under the amount of the estimate, even if just a couple of dollars. This gives you the reputation of being high priced but delivering complete satisfaction. I don't know of a better rep in this business.
Totally off topic and perhaps too late, but there are air actuated disposal switches that install a plunger in one of the sink holes. Of course you have to order a sink with a hole to spare. The plunger attaches to a switch box that the disposal plugs into. The switch boxes mounts in the cabinet and I think is hardwired.
It's a mistake to start itemizing and giving quantities on an estimate or an invoice. If you say 17 square and somehow he ends up thinking it's 15, then you owe him 2, in his mind. If you say 'replace roof, $6000', then he gets his roof replaced for $6000, no matter how many square it is.
I have never gotten anywhere by itemizing stuff on bids or invoices. It's a rare client who won't start trying to verify the quantities. I do best when I make the scope of work as long and detailed as possible, and give a single number as the price. Most people are able to make decisions based on a presentation like that.
I agree, I write a scope of work that doesn't include any dimensions, and a total price. If you itemize the list people will pick it apart.
The other thing I've learned is not to separate the garbage haul away. Sometimes you get a cheap customer who thinks they can save a few bucks, you leave a pile of rubble on their lawn, and the neighbors think your a pig.
How does he measure the sq ftg ? My 2,900 sf footprint used about 50 square of shingles.
I see two problems, One you guessing at the quantity, and it sounds like you guessed high enough to cover yourself but that is still a bad practice in my opionion.
Your second problem was telling him how much of the product you're going to use, a portion of customer's do not seem to understand "waste" or the fact that you might just bring extra "Just in case" so you do not need to make another run to the store.
It's good to be specific in your proposals however I try to avoid listing sqft or squares, or linear feet of anything unless it is to protect the company when we are doing limited repairs and there is a good chance additional may come up. An example would be replacing soffit, I might say something like "Replace Approximatly 20 linear feet of soffit on the east side of the house" Then if we get up there, and I see the next 20' are shot, but could not be seen from the ground I'm covered.
If we're replacing an entire roof or entire room of carpet etc, it's Replace roof over entire house using....... products. or replace all carpet in Bedroom A and Bedroom B with "name" carpet and "name" pad. This way the customer can never say you only used X square feet but you said Y in your contract, give me X-Y back. Not that it helps much but I have learned to love the word "approximatly" it buys a little wiggle room, not a lot, but sometimes enough.
Yes I agree with all of you in retrospect, I should not have told him about sending him a check. I guess that's what being called at 7 AM (before I'm "open") bent over in a lumber rack at HD gets you. LOL
The reason I give fairly detailed estimates/ invoices is as CAG said, to protect myself in case there's more than meets the eye. Since the hurricane, with the volume of roofing we've been doing, I normally ask (if it's an insurance claim) to see the adjuster's report and I go from there. Experience says we normally come in slightly ahead of the adjuster's estimate. That's an easy way to save time doing these estimates. (We were doing, at one point, at least 5 a day.)
In this case, we WERE the adjuster...the insurance company originally called me to confirm my estimate, and they found no fault with it.
I guess my whole problem was I didn't walk off the job the first day when we showed up to frame the shop and he asked, "Is it gonna cost any extra to put in these [8] walls?"
Thanks guys. You've confirmed (in a not so gentle way LOL) that I've been too nice about documenting change orders (and charging for them). And I mean that sincerely.Jason Pharez Construction
Framing & Exterior Remodeling
I don't think you should give in to this guy, especially since you said you already gave in on the previous job. He is just taking advantage of your good nature. You did what you said you would do for x price, and discovered some unforseeable curcumstances which you had to charge him for. For whatever reason the insuarnce company is paying for some of all of the roof, but you did not contract with the insurance company. This guy just wants something for nothing - or at least wants the insurance company to pay for most/all of it. As others said above some of your business practices could use some sharpening, but you did nothing wrong. On the other hand if you do end up sendig this guy a check at the very least I'd refuse to work for him again.
I did try to help him on his roof---you see, we only replaced the front side, b/c that's all the insurance company would pay for. When we got started on the job, I noticed significant curling of the back shingles, and I told the HO that he should get the adjuster out to look at so maybe he would get paid for the whole roof--that's the only reason the adjuster showed up in the first place!Jason Pharez Construction
Framing & Exterior Remodeling
Yah, I've already spent what little I've made paying my suppliers.
I wouldn't have taken the job, but it was the last part of the bigger job--frame and roof the shop, then reroof the house to match.
Jason Pharez Construction
Framing & Exterior Remodeling
What Dan said was a little harsh but it had good information in it if you can look past it .
I also agree with somthing you said which disagrees with most here .
So here we go,
I think folks should get the same deal on the same thing every day unless somthing changes.
I dont ever ever hand the keys to rental house till Ive got cash or a verified check which has nothing to do with this but I dont change rules.
I try to be concrete in what I say and the story doesnt change.
Everyone knows people pay by the sqaure and insurance companies lead the way. Thats business .
Since you gave a per sq price you should charge for the work described. Kinda like the stunt man who took a deposit to jump and had second thoughts . Its too late , he already sold his azz.
Tim
Jason, have you read How to Win Friends and Influence People?
You particular situation calls for using quite a few techniques! LOL!
I probably would have tried to get that guy on my side by telling him that I'd assist him in getting what is due him from the insurance company. Basically, he's getting the shaft from the insurance carrier and trying to collect his losses from you!
I don't think so!
The only duty that the insurance carrier has once a claim has been filed is to sign the check. They are not the contractor and they can't set rates for you or your company. If they want to discuss the rates that you charge to determine whether you are out of line, they can, but that still doesn't relieve them from paying the check.
Insurance companys will typically use lowball figures to payoff claims. Most people accept that amount without a battle and in the long run, the insurance companies come out ahead. If this guy has already signed the check, then it's probably too late, maybe not. In any event, I'd offer to write a letter or call the adjuster offering reasons why the claim was settled for too low of an amount.
Basically, make the insurance the bad guy...not you.
And...quit letting guys like that bully you. When you arrived and had to install 8 walls or whatever you should have immediately went into negotiating mode..andgot a check!
blue
I read you charge what you charge well that is good stick to your guns there
But it is your mistake for doing freebezz most ppl don't know a bargain.
so don't do free work if they like your work they will pay for it happily
If you work by the hour, and contracted on an hourly rate, would you charge for more hours then you actually worked?
No. But you kind of lost me, Sledgehammer. What are you getting at?TIPI,TIPI,TIPI!
I'll answer that, if only to dispell some people here's assumption that I'm not honest.
NO I don't charge for more hours than I worked, if on a T&M/hourly basis.
In fact I recently did the demo/framing/deck on my dad's house by the hour...not only did I not overcharge him, but I even figured out the rate for every single helper (and myself) so that if someone was absent, he did not get overcharged.Jason Pharez Construction
Framing & Exterior Remodeling
here's assumption that I'm not honest.dont expect you to be honest, your're a contractor a CON with a TRACTOR. If all the contractor did they job right all the time, it would put me out of business. I want contractor to cut corners. I expect contractor to cut corner. I do not hold it against them. You cant be totally honest and make money.I would of looked the client in the eye and said " No refund, dont call me no more" Hell, your kids need shoes too.. 2+3=7
Your client reminds me of my "kitchen from hell" client. I was subbing for a GC I occasionally work for.
Two months to put this kitchen (not my fault), and at the end of the job, the family "gangs up" on my GC and says they wont pay because the cabinets dont match. All the cabinets are new and from merilat (should be there problem).
Some people are just trash.
I once gave an estimate for a 15 sq. roof and at the end of the job the guy wanted a credit because there were two unopened bundles sitting on the ground. I explained I always order a little extra to cover starters and caps. He never got it so I credited him the cost of the materials.
That was the last time I gave the customer a bill of materials.
Tell him that even though the roof was more labor than expected because of the extra layer you thought you were being a nice guy for not asking for what it truly cost you. If the invoice were to be adjusted it would be in your favor.
Hah! If we have anything left over we always leave the customer what's left of the open bundle, or even a couple of bundles, in case they ever need to emergency repair or match their roof. 99% of customers think this is great!
I know wher you're comin' from!Jason Pharez Construction
Framing & Exterior Remodeling
Has this guy been a big source of referrals for you?
Hint. Stop itemizing materials in your estimates. Only in your final invoice. That way you can say that you always over order and the remaining materials go back to supplier as a credit to you. This HO sounds like a real dick.
NO--he was referred to me by his agent, who is also my agent.Jason Pharez Construction
Framing & Exterior Remodeling
With all the but heads we run into in construction who has a good retirement plan. U did a good job, U got paid next job please.
Without reading through the entire thread, I'll offer my opinion.
I do not give refunds. Any cost variances that arise during the course of the job are adjusted prior to final payment. It is extremely rare that I would consider crediting a client for labor, however I often do such for materials. If I make more on labor than was originally estimated, so be it, I win.....cause if I lose money on labor, aint too many folks wanna hear about it, I lose. Allowances are made for materials. Should I allow greatly more than final products chosen, I'll often credit the customer the difference.
Once I've been paid...it's done. That is what the contract is all about. If the client was willing to pay the price before the project started, they certainly shouldn't have a beef at completion and after paying.
As you said. During the course of a project, we end up doing things (usually small) that need doing, if only to allow the project to continue smoothly. We don't always charge for those things. I usually make a list of them and assign costs during the course of the job....especially if the client is a PIA. Should said client start demanding a refund, I hand them the bill for uncharged extras. It usually ends there.
J. D. Reynolds
Home Improvements
I like your thinking!
And I agree with what you say.
I plan on sending him a letter Monday detailing why we are not responsible for any refund, and should he prefer, we can credit his refund toward all the additional costs we incurred but did not bill for.
BTW, the AIQ (Amount In Question) is less than $500 on a $12K job.Jason Pharez Construction
Framing & Exterior Remodeling
You did promise a refund, so....
send him a check for one dollar.
Sorry for you problems. I don't know how it is charged down there but here roofing is not done like drywall and charged by the delivered boards. You measure a roof. I would have a problem explaining charging 17 sq mat and labor if it was 15 sq. I would have no problem charging for ridge, flashing, waste, felt, etc. (edit: I am not a roofer, only going by what I have had quoted/subbed out/done)
If you are going to charge a flat rate per square you need to figure that in. You got burned but you kinda lit the kindling. It sounds like you fanned the flames a little too. How can you justify an error of 100% on the amount of tear off square footage? Would defend price all day with the roll roofing and extra nailing over three tabs.
Like most have said it is a mistake to break things down too much. I think materials and labor are about the deepest it should go. The only real reason (IMHO) to break it down that far is there are some states where material is taxed and labor/services are not.
Bottom line is can you afford to not do what you said you would do? You said you were going to only work with builders now but that may change and bite you later. If this guy is the d**k you say he is (and it sounds like you are correct) I would bet money that you will regret telling him to stick it and not make some kind of refund (even not deserved).
Edited 2/10/2006 6:22 pm ET by rasconc
Rascon, first, I used to compute roofing estimates very categorically, as you mentioned. Again, for the sake of time (I was doing 3-5 estimates a day, in addition to running/working the jobs) we went with just measuring squares and charging somewhere near the average price per square.
As for the bottom line, I really don't care who he tells we are sh!t, b/c his was the last roof we are doing for quite some time, especially since I just cancelled my roofing GLI. I did this to get GLI and WC to frame new homes for builders, so again, working directly for HO's is not in my immediate future.
Add to that, even if I did go back to remodeling, 90% of our work was repeat/referral business w/ very little advertising; stayed busy and people pretty much said "charge what you think is fair and start when you can." Not bragging, just stating that when people can see your work (my own home being the prime example, with a $60K remodel next door) and they know you personally (we've done 40% of our work in my own neighborhood--thanks Steve Hazlett!), you don't need to be the lowest bidder, or even run an ad in the Yellow Pages.Jason Pharez Construction
Framing & Exterior Remodeling
Hey I was just point out some things. It is kind of how I look at ebay sellers feedback. I look at how they handle a neutral or negative response. Usually can see right through some idiot buyer's comments but if seller comes back with some real wise or uncalled rebutal I would steer clear. It is great that you have such deep base of referrals.
I just do not like to leave any bad comments or thoughts out there. You know you were rightly justified ( and I agree) but should not have said that you would refund. It is like jumping out the airplane door, chute working or not you are committed. I would really surprised that there would be as much money to be made subbing as doing it on your own. Surely a lot less hassle though. It seems like making a product and selling it wholesale thather than retail.
Sure can see getting away from roofing! Knees, back, and legs say stay away.
Only thing I would like to add is that this sounds like it was a job paid for by the insurance company. If that is the case, they would be the ones getting the refund if you do choose to give one. Throw that idea to your customer and see what he says :)
Bill Koustenis
Advanced Automotive Machine
Waldorf Md
Just do like Lowes and Hd does, issue him a credit on the next job, and then dont do anymore jobs from him. We both know people in this town are a little lightheaded.. 2+3=7
LOL BB, too many hurricane victims thinking they get something for nothing huh?
BTW Mr. Bill, thanks for your point--never thought about it like that!Jason Pharez Construction
Framing & Exterior Remodeling