I’ve always been told (and practice this myself) that you get paid when the work is done. Yes, there are some exceptions to this rule, but I’m talking about small type construction jobs.
Here’s my question: I recieved an estimate from a roofing contractor to replace/repair some flashing around a chimney. Estimate was $480. I called to schedule the guy and the secretary then informed me that I’ll have to pay 1/2 up front before they start work. No where on the estimate does it say this (she claimed it did, but looked again and realized it didn’t). It does say however, “Balance to be paid upon completion”.
I finally just asked her to have the guy give me a call so we can discuss and she just about hung up on me.
So, what’s the standard practice here? For roofers, is it standard practice to pay 1/2 up front? Considering the estimate doesn’t have that stated on it, I’m of the opinion they get paid in full when they are done.
Please give me some input.
Matt
Replies
speaking of which, what do you guys usually charge for the jobs you do? I think many workers in my area charge twice the cost of materials for the whole job. But what do you guys do when the materials are really cheap, but the labor takes awhile....no hard and fast rule?
jfink,
Sounds like you are fishing for an article. If so, you can add this response. I never use that hard/fast rule for figuring a job. Around here it used to be said, 500 material means 500 labor. Never heard of the twice material one, but that seems more realistic. If they bid jobs with that much thought, I don't think the business will last. And by the way, how come no answer to the questions to your "you're famous" thread you started about Rhodefest. Good to see you posting, come back often.
minorly hijacking matts thread, sorry.Remodeling Contractor just outside the Glass City.
Quittin' Time
Calvin, sorry I didn't answer the "famous" threads questions, must have missed them....what did you ask?
Here you go.
http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=46548.1Remodeling Contractor just outside the Glass City.
Quittin' Time
Matt, I'll get many of my peers here angry at me but here it goes.
I would be embarrassed to ask for labor up front, regardless of why many different ways I would try to “rationalize†doing so.
If I feel the need to “test†you, I would just walk away from your project. Besides, any contract is a two way street. If I felt the need to test you, how could I be angry if you felt the same need?
On any job wither the material is less than about $200, I would just Invoice you upon completion - no deposit. In fact, I’ve done jobs for 2-3 grand without any deposit or payout until I finished the project. That’s also one of the ways I create the positive “brand†name I have and is also why my prices are rarely questioned. Reputation. I’m a businessman first, service provider second, and only a tradesman last.In effect, my “businessman†hat hires the “tradesman†hat to service you.
As for the price to be charged. I use a variable pricing structure. That means that my basic rate goes up depending upon things like roof repair (will automatically add $100 due to unsafe situation - on any roof). Rate goes up again if it involves liability, like warranting my work. Obviously a heck of a lot more damage will occur if I screw up than if I am painting a room, or hanging a door.
Bottom line is that we both must trust each other. If I get a bad feeling about you, I walk. If you get the same about me, you walk. Money should be the least of concerns for either or us. Relationships, in my opinion, always trumped money. Example: I once had a guy who stalled paying me a final payout for about 3 weeks, who months later had the cahones to call me to do a large remodel for him wit no other bids. I simply told him that he did not deserve the caliber of someone as myself, but instead, a contractor who had the same low ethical standards as he had. Money was not an issue - character was.
Calvin, you should read this post in Knots, http://forums.taunton.com/tp-knots/messages?msg=19162.1 , then reread JFinks post and your reply. They make a humorous trio.
jfink.. are you kidding or what ?Mike Smith Rhode Island : Design / Build / Repair / Restore
I've heard a couple of times in my life somneone doing moonlighting trying to price jobs this way. Never from a pro. Just plain rediculous to consider.
For instance-
wallpaper can run anywhere from $x per roll up to twenty times X p[er roll. Does the guy get paid more to hang it when the paper costs more?
my painter's bills can easily run twenty times as much for labour as for materials
my excavator doesn't always have any materials to charge for. should he work for free?
a remodelor uses far less lumber than a new home builder, but he works harder and ofetn has more skills to bring into play. Should he earn less ?
on a new home, a framing crew can burn up thirty thousand dollars worth of lumber in two weeks easily. Should they be paid 30K?
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so what's your suggestion for a moonlighting finish carpenter piffin?
job costing.
Keep yourself a record of all the things you do, want to do, and how long it takes to do them.
Then you can develope a price list for future estimates omn your labour. Learn to list amterials used too. Then estimate based on actual materials cost. ier. a door hanging takes more materials than just the door itsel. You have the sill pan, shims, spray faom, nails and screws, maybne hardware - watch out on that too to be specific. you can spend more on an entry set than on the door itself - or get by with the $29 unit.
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on a new home, a framing crew can burn up thirty thousand dollars worth of lumber in two weeks easily. Should they be paid 30K?
Ummmmmm Yes!
Actually Piffin, we now figure about 10k per week.
An old xpartner and I used to figure about 6k per lift of lumber....we didn't figure it that way, but it always seemed to work out...at that time we were doing either 12k houses or 18k houses.....just coincidence.
blue
If you want to read a fancy personal signature... go read someone else's post.
Common myth that unfortunately has made into the minds of many.
I bid based on the number of hours it will take to complete. Example... I can tile a floor with $.98 tile or $98 tile... makes no real difference to me (with the exception of possible breakage). It takes the same amount of time.... thus the same price for installation.
I have had several customers say "well the price of materials is only xx... so shouldn't your price be yy?" It somehow became ingrained that everything is based on materials cost. Definitely not so.
To the original post...
The "1/2 down syndrome" is common.... and sometimes "procedure" gets in the way of common sense. For flashing a chimney... gotta agree, not worth the bookkeeping to get a deposit (unless, as has been stated, to get on the schedule). However, common sense is not always the rule <g>
Just pay the man and get it done, IMHO. The secretary was following the rules as set forth to her by the boss. There is something to be said for "consistency" however... and if 1/2 down is the rule... then 1/2 down is the way it is.
You are right that somehow this "formula" has become ingrained. I think over the last 25 Years the percentage of cost has changed. I used to figure labor being 40-50 percent of a project now it is more like 60+. Do you agree? DanT
Thanks all for the input. Seems like the basic consensus is that
I should pay the 1/2 eventhough the estimate/proposal/contract (call
it what you like, I say contract because it has a place for me and him to sign.......and has terms and agreements verbage) says nothing about
that.
I not disagreeing that its probably their standard practice and the
secretary screwed up, but again not my problem. Do I trust the guy? Don't know him. He does alot of work around town and it looks to be
quality work. Thats mainly why I called him. I called 5 roofers and
only one came to give an estimate (dang contractors.....)
I've gone ahead and signed the proposal and faxed it to him. Now the balls in his court to call me and explain his practices and ask why I
didn't fax him a check for $240. I'd say considering his secretary was a bitch on the phone (I was all smiles and cream, she just didn't like the fact that I was right about the proposal not saying anything about 1/2 down), he atleast owes me a phone call to apologize for his secretaries behavior. We'll see what he decides.
Again, thanks for the responses. Thats why I like this forum.
Matt
Used to own/operate a storm window plant. Everything a custom cut/fit. I always asked for 1/2 down when meeting the owner. Never batted an eye. Did pretty much the same thing when I did small jobs. Always got it. Maybe it isn't printed on the contract but when the sale was made the customer got a copy upon which it receipted him for the 1/2 down. Secretary probably never made a house call so she was just reciting (wrongly) what she had been told. This handyman chain I did some work for were amazed that I always came in with a contract and a check. I think there may be some legal reason for paying at least some money with the contract to make it binding. It also "qualifies" looky loos from serious clients in a big hurry. Tyr
Currently, I'm averaging about 75% labor... but it really all depends on the project. Some projects are 25%... some are 99% labor.
I have tried to set up my business on a "return on investment" program, as opposed to the more traditional P&L "% of sale" basis. Sure, I keep a P&L... but more important is return on time and equipment investment. It's a bit more tricky to do it this way... but I find that I am able to plan much more effectively for the future investment in equipment, education, and better able to plan for staffing, etc.
"Currently, I'm averaging about 75% labor... but it really all depends on the project. Some projects are 25%... some are 99% labor. "
Specially on a small single shot project like this one.
I am doing of "handyman" fix up on a house for sale.
I had to replace $200 worth of bad low voltage track transformers. Other than the time find the transformers and speical order them I had more time in setting up and moving my ladder than replacing them.
But in another area there was track that was not working and the HO did not know when it stop or even remember what switches operated it. I probably had 6 hours into opening boxes and testing. Then after I ID'd all of the switches I found that the track did not work because it the track adapter was missing.
In the first case materials over $200 and less than 1 hr of labor. In the second over 6 hours and a $8 part.
one example to show how this wouldn't work...
say a customer is wanting a 10x14 deck with 4 risers...one option is to do all pt decking and rails, and one option is to do all cedar. now as a rule of thumb, cedar cost close to 2x that of pt..do i get 2x the labor money to do the same job?
...of course, if I can talk the customer into it, i'm not turning them down!
----------------------------
as to the downpayment, I agree with the thought that once you pay him some dough, you kinda own him in a way...enough to hold it over his head till he is done...
bummer about the secretary...I deal with one of those with one of my Contractors...you know the type...wife of the owner that thinks she....well...you know...
Edited 9/19/2004 4:06 am ET by charlie the singing carpenter
Most contractors that I know want money up front to cover materials. Most feel they are in the business of doing work, not financing it. But it should be written out so you understand it.
I charge 10% non refundable to get on my schedule, 50% of the balance to start work the morning we show up and the balance upon completion. I carry a bank balance and credit line large enough to handle my material up front. I just try to protect myself from non payment. If I get stuck on the last check I can usually at least break even on my base labor and materials. DanT
I ask for 1/3 down at beginning of project, 1/3 towards the mid point, and the last 1/3 at the end/approval of the project.
Renaissance Restorations
Antique & Victorian Home Restoration Services
http://www.renaissancerestorations.com
But the poster is talking about flashing a chimney, probably a half day job. And a $480 job at that. Seems silly to ask for half up front to me. Also seems silly to worry about it if someone asked me for it. As long as he was there prepared to get on the roof that morning, he can have his downpayment.
Now if he's talking about someone asking for half payment up front before he even showed up, for that small of a job, I'd be a little leery.
I wouldn't have a problem with 1/2 down before he starts the job except that it wasn't written on the contract/estimate. The secretary(?) on the phone blamed that on the previous secretary that was recently fired.
Additionally, when the owner came out to do the estimate, he didn't mention anything at all about his payment practices.
Soooooooo, considering all that, I don't feel they should be asking me to pay 1/2 up front. Yes, this is a nickel/dime job, but its just the simple idea of running a business in a proper way.
I agree with what most of you said about paying for materials. Being in the business I totally agree and understand. But, you have to make sure thats understood when you talk with the customer.
Matt
matt.. a contract is not binding unless there are two parts to it..
with me... i'll do the work, i'll sign the contract
for my customer, his part is to pay me money...
i want money down to see what color it is..
for that kind of job ... half down wouldn't bother me at all...
if it bothers you.. hire somepne else.. the secretary...... pleasantly or unpleasantly, told you what the company policy is... she didn't make it up...
if you want the job done... pay the deposit..and do it with a smile.. you can always frown later.. but smiles and money grease the waysMike Smith Rhode Island : Design / Build / Repair / Restore
Matt,
I would not ask for a pmt up front. Not for scheduling, not for material. The material on that job is not much, a roofer would have that stuff rattling around the back of his truck. I'm hoping he's pointing the chimney and maybe caulking the top cap/flue tile for that too.
Unless of course it's way up there and damn steep.
Make sure flashing isn't goop it up.
Pay him when he comes down the ladder...........
If you can get him to go up in the first place.
Remodeling Contractor just outside the Glass City.
Quittin' Time
I do mostly bigger jobs where the payment scheduling is dione differently and defined in the contract, but always wirth some money up front. I'm not interested in providing my expertise, my time, and my materials, as well as my money or credit. They need to provide me something. it is called a deposit, or earnest mnoney and a principle as old as the hills.
On a practical basis, most of the smaller jobs like this that I do are for repeat customers with a track record for good paymnent. I don't hesitate to jump on a little job like that without advance payment because of the bookkeeping time involved in tracking it all. But if a new customer gave me the slightest hint that I might have a problem getting paid, he would be fronting me money.
On the third hand, There was a time when I was so busy with a backlog of work, all the while, raising rates, that I instituted a policy of requiring a third down just to put a customer on the scedule and to hold the price. Maybe that is the sort of thing you have run into. The price doesn't sound bad - for not seeing the job itself. Pay the man.
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Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
If you trust the man I would not worry.
Look at it this way. He's committing a portion of his day (maybe all of it) based on his trust that the work will be needed and paid for. If you decide to have your BIL do it, he's out of luck.
The deposit keeps you wanting him because he's got your $240. Maybe not standard but I can understand the rationale.
I don't think the two checks would give you a problem with the books. Just cash them at the same time.
Jon Blakemore
when you hit a contractors site and ask how they should be paid,your going to get the answer ,pay me now. how many guys go to a auto mechanic or bodyshop and pay half down before the car is in the shop? as the owner of a bodyshop i'm going to tell you if someone hasn't got enough working capital to do the job and then get paid, it's time to get in the car and drive off. now if it's some large and drawn out resto job, he should probably get paid as the work is completed with final payment held until finished. i've been burned and seen other people get burned paying ahead. i've got know problem if a guy said hey i worked my 8 hours pay me at the end of the day,see ya tommorrow. larry
You are also not going to drive out of the mechanics lot with your car untill you pay him. What is the roofer going to do if he comes down the ladder and the guy refuses to pay? Go up and take his flashing back? Whats that going to help? Half up front isnt too much to ask. Hes asking you to trust him with your money and hes trusting you that you pay the other half upon completion. Lots of guys get burned on these small jobs because people know its not enough money to go to court over. Even if you do get a judgement you still have to collect.
"how many guys go to a auto mechanic or bodyshop and pay half down before the car is in the shop? as the owner of a bodyshop i'm going to tell you if someone hasn't got enough working capital to do the job and then get paid, it's time to get in the car and drive off."
Not a good comparison. When you finish working on a car, you still have the car and better mechanics lein options than a builder doing house repairs. When I work on the house, they still have it.
And while it is not so in the case of this example for 480 bucks, you will never have as much money tied up in an automobile as I can get tied up in a house renovation
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your right in the fact that you can spend much more time and money on a house than a car, and i don't object at all to paying as you go. and if you feel the need to be paid at the end of the day every day,no problem. now as far as getting paid on a car how it plays out is a guy brings in his 04 denali hit in front.you fix it and the bill is 12 grand, but he can't pay you.you then file mech. lien on it only to find out he has a 52k loan on the car. now you got a problem,i'm sure that can easily happen on a house also. i have seen so many people get in trouble with a shop by paying them before they start and the guy blows the money and the car just sits.i'd recomend to anyone to never pay until the work has been done.
on a little different note, i one time had a customer that was jerking me around pretty good,couldn't get the money etc but needed the car now. after about 2 weeks of this cr p i walked out with a grinder ground the paint and plastic off and told him to take his car! man being so independent can sure cost a guy a lot of money lol larry
Good points.
it's always educational to learn from other fields of work and business. Let's be gald we aren't surgeons. That would be a hard one to repossesss!
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yeah probably good idea i wasn't a dr. that whole thing about not screwing would catch me! but how they do it is if one guy don't pay they just charge double for the next one. larry