If you buy a car there are all sorts of places that will tell you what a car costs.. consumers report and a dozen other magazines will tell you which is better than the other..
Heck you can find all that about vacummm cleaners and sewing machines.. Why are houses so differant?
Ask anyone for the starting point to design a home and you get vague answers.. it depends and what if’s..
We are adults here, no one is offering to build making formal signing of a contract.. Why can’t we discuss costs in a reasonable fashion..
For example why can’t we discuss framing costs?
a simple three bedroom ranch is this much per sq.ft. (on average) here in (city) Add some cavots if you are worried. normal flat lot with a square foundation.. etc..
then if you wanted you could add what you normally charge for bump outs and etc..
I can get those costs by using a construction estimater program but why not have someone offer to give their average per sq ft costs on a simple one story ranch?
added charge for building with 2×6’s? OK list it..
Then another city could chime in and so on etc..
same with electrical, what do the sparkies charge to bring in 200 amp service to a house in your community? (new construction so we should be talking about straightforward stuff)
This isn’t about getting the lowest or cheapest,, just typical ideas..
My sister wanted to build a new house a while back, she couldn’t figure out what it would cost.. no idea..
she didn’t know if this contractor was giving her a decent deal or anything.
In the end she bought a house from a couple who were getting a divorce.. it wasn’t what she wanted, it wasn’t where she wanted it and the only thing about it that she liked was there were three other houses in the neighborhood to compare to and she knew what she was doing..
Replies
I think regional considerations are a big part of it.
My sister lives in KY. I went down there to help her do work on her place, the drywall crew charged $8 an hour. And they aplogized for charging so much.
Here in CT...you don't even want to know. Taboo discussion.<g>
Pick up my house and move it to San Fran and it's a $1.3M house. Move it to Alabama and it's yours for $200K.
I do mention costs in my posts, but I also mention location. It makes all the difference.
Plus it's tough to compare a one-off stick-built house to a factory produced peice of durable equipment.
Which would you rather own: The Milwaukee drill manufactured in the USA...the same model made in Mexico...or the same model made in China? Are the differences between the three actual or just perceived?
Which would you pay more for: the Hyundai made in the factory outside of Seoul that carries five passnegers, gets 30mpg, and it painted silver, or the Mercedes made in Germany that also carried five passengers, gets 30mpg, and is painted silver. Both move the same number of people, have the same legroom, and realize the same mileage. They perform the same, thus they are the same, right?
Probably poor analogies there, but...
There is a reason that decades ago manufacturing and factory jobs left the northern US and moved south. There's a resaon those same jobs are now leaving the southern US and going to Mexico, Asia, etc. A shirt or a VCR can be easily shipped anywhere, thus cost advantages can be realized by using an inexpensive local labor market.
Housing? You build where it has to be built, and you pay the local rates. Doesn't mean you're neccessarily getting better...but you're definitely paying more. Perhaps as modular houses become more popular and the labor portion becomes more transportable, you'll see a change there.
I dunno.
I,m sorry, move it to alabama and its 55k
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
and be thankful they ain't moving it to MississippiMike Smith Rhode Island : Design / Build / Repair / Restore
alot of people don't beleive it but really mississippi is one step above alabama. Ever since they got the casinos they have really improved the state. Mississippi not bad.
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
Or Arkansas.
Tim Mooney
SOLD! Now move it back up here to SE PA. On the double now, move along <g>
CurlyHand Hewn Restorations Inc.
Restoring the past for the future.
As I said, location does matter.. I'm courious for example about the differance between the city and the country.. Here in Minnesota the city/ suburban framers all seem to be around $7 to $8 dollars a sq.ft for example while outstate they can be under $5 a sq.ft.
Sure there are variations between crews.. Some crews can knock out a typical house in as little as 4 days while it's a three week drag for other crews.. Basically the same house..
Land costs seem to be a major part of costs and I doubt we'll ever get a consistant number for that. Recently myself and neighbors are flooded with requests from realestate brokers looking for a property around $1.1 million, frankly it's doubtfull he'll find someone.. yet across the street you could by a shiney new house for well under $500,000 Actually some of the houses across the street are nicer than the ones on the lake, there is that much of a premium..
Yet it should cost the same to build identical houses on either side of the street.. Thus we aren't comparing Honda's and Mercedes. As for labor.. It wasn't that long ago where a hispanic working construction was a rare exception.. Now it's almost the norm.. So perhaps we are importing our labor as we imported cars and radio's.
i love to talk about money, and as a native californian i always wondered why some areas of the state paid higher wages when development costs, including land, is very close. take for example santa barbara area and san francisco bay area. in both areas you can find similar priced lots, and the finished same house will sell for same, but wages are not as much in santa barbara as san francisco. where does the difference in money go?
i have also noticed that as a contractor i always have to haggle with suppliers, if i just go in and hand over a lumber list i get price x, if i hand them a quote from home depot i get a much lower price, and this happens every time and not just with the lumber. but you gotta ask the question, how much?
in california home prices are appreciating so fast that when you do a sensible well thought out remodel or addition for a homeowner you make them money on paper. a simple granny unit can easily bring $400-500 a month over what the payment is to re-finance and have it built. that will usually convince a homeowner, may as well get some help with the mortgage. talking about money usually makes me some.
So what are framing costs in Santa Barbara? what about San Francisco? How does each compare for sheet roockers and electricians etc..
I've noticed the thing about using Home depot to keep the lumberyard honest, but then why not use Home Depot? Is it because the lumberyard will float your costs or the delivery thing?
in general about $5 dollars less per hr in santa barbara area vs greater bay area, although there was recently a boom in residential work in SB so wages went up some there, but work booming all over cal so.... the point was that land, materials,development costs are similar, but wages are lower further from major metropolitan area. also it seems that san francisco has a stronger union than southern california (LA), which also lends itself to wage differences.
the reason i like to bring it up is that a lot of people think that if you lower wages prices will go down, but i don't think thats the case, developers will sell for whatever market value is. if you pay a higher wage to people who work it doesn't end up costing the homeowner as much as it reduces the profit of developers. when it comes to money i would like everyone to know what it costs, and who made what for doing what. for someone like myself who works for a living, that usually means i make more money.
When it comes to water, you bet location is everything.
A couple of years ago my brother was house hunting up in Maine for ocean property. While he was renting at the beach we went and visited for a couple of days.
We stumbled on a small cottage. Very small. On the inland side of Ocean Ave. It was just coming on the market. We actually bought it, which seemed like a total mistake at the time, because over the course of the previous year I was trying to unravel and simplify (read: SELL<g>) my real estate dealings as well as exctracate myself from construction. Simplify and download.
That quaint little 3-season shack more then tripled in value over the next three years. Insane. Zero logic to it. Bought it for $142K, put about $14K into it, sold it this past summer for $478K. Absofrickinlootly ludicrous. Especially considering that when we put it on the market the initial price was $425K.
Houses across the street, which are on the ocean, went from about $400K to over a million over the same time frame.
Pocketed a fair amount of change when we sold, plus we'll now stay at my brother's place (he bought as well) when we hit Maine each summer. Double bonus for me.
Up there, there is a significant water premium. Last year, being within two streets of the ocean (easy walking distance) seemed to be worth around $50-$120K. Being on the ocean side of Ocean Ave seemed to add another $400-$450K.
It'll be interesting to see if the market holds up over the next few years. Honestly, I just don't see the value.
I'm on a lake here in CT, but it doesn't affect values nearly as much as it does in your location. It's a non-combustion engine lake, so it's very quite, which is fine by me. North of me is state land, which makes the entire north half of the lake wooded. Across the lake it's unbuildable due to shoreline wetlands, so the waterfront is not developed. Still, if the waterfront adds 10% to the value of my property I'd be suprised. I really don't want to know, though...I'm planted here for the long-term.
When I lived in Wisco, lake properties were indeed valued at about twice as much as similar houses with no water frontage.
I think we've beaten "location" to death...<g>
Edited 11/29/2003 12:38:07 AM ET by Mongo
Here in Minnesota the city/ suburban framers all seem to be around $7 to $8 dollars a sq.ft for example while outstate they can be under $5 a sq.ft.
That not only wood pay for a framing crew , but just about every body else here.
Tim Mooney
"Which would you rather own: The Milwaukee drill manufactured in the USA...the same model made in Mexico...or the same model made in China? Are the differences between the three actual or just perceived?
Which would you pay more for: the Hyundai made in the factory outside of Seoul that carries five passnegers, gets 30mpg, and it painted silver, or the Mercedes made in Germany that also carried five passengers, gets 30mpg, and is painted silver. Both move the same number of people, have the same legroom, and realize the same mileage. They perform the same, thus they are the same, right?"
Mongo,
Good point, and not to vear too much off the topic. But...Once you move production offshore, the biggest source of reducing costs (raising profits) is raw materials. In the USA, let's say (like in building a house) they account for 30% of the finished product.
Move offshore to a developing country and...... OK,now that $300K house now only costs ~$101K to mfr. and 99% is raw mtrls. cost. Now, there is TREMENDOUS pressure to lower your raw mtrls. costs. So now you can really boost your profits by sourcing cheaper mtrls.
My point is that the two go hand in hand, Just like fine furniture makers don't build stuff out of knotty pine (except for the eccentric with money) The mtrls used oversea's are not the same as those used here.
Are imports a better deal? For many yes, and for many no. Personally, I buy really good stuff when I need it, and cheap when it doesn't really matter.
Jon
Mongo "Pick up my house and move it to San Fran and it's a $1.3M house. Move it to Alabama and it's yours for $200K." I couldn't agree more. Geez if I could pick up my house and move it a mile and a half up to the top of the hill from where I live now to the neighborhood where Ralph Lauren, George Soros and Martha Stewart all have houses (or are building as in Martha's case) it would be worth at least a million more. Same house, same size it is now. There's a house up near them I've been in that's the same size as mine on roughly the same 1 acre size plot stuck in the middle of all of them and I would bet that million that it would sell for a million more than my house down near the interstate. That's all just prestige and land costs differences though but still it makes talking PRICE difficult and confusing at times. People post all the time here saying this cost this or that without ever saying where they are regionally or providing enough context for any real useful answers.
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Jerrald,
Your point about location is correct.. But if it takes 1000 man hours to build a house in city X then building that same house three blocks away will take the same 1000 man hours. (all other factors being the same)
Now if you have a really fast crew and can build that same house in 850 hours then you have a competitive advantage and you can earn extra profit.. (and you are right, it's nobodies business except you and your crew) On the other hand if you consitantly take 1200 hours to build that same house you will lose out...
But we aren't talking about that.. rather a simple way for someone to make a starting budget and know that it should be a fairly accurite starting point.
Frenchy-"if it takes 1000 man hours to build a house in city X then building that same house three blocks away will take the same 1000 man hours. (all other factors being the same)" True, very true....
"Now if you have a really fast crew and can build that same house in 850 hours then you have a competitive advantage and you can earn extra profit." Well maybe sort of, but still yes, but not for the simple reasons one might think of when first looking at that. That really fast crew that can build 15% faster may cost you that 15% in higher wages paid to them since they are obviously more skilled ( and probably know it). Your extra profit comes from not form necessarily making more on a particular project but due to the fact that you are doing more projects per year. Your total volume of profit goes up not necessarily your profit percentage.
"But we aren't talking about that.. rather a simple way for someone to make a starting budget and know that it should be a fairly accurite starting point." Well okay but the only way that I know of to do that is a good solid Unit Cost or Systems Cost estimate. There just aren't any good accurate shortcuts out there otherwise everyone would be doing them and not using Unit Cost estimates for anything at all. If you want to use SF estimating for a preliminary budget that okay but the chances of the real project coming in on that number are slim. And according to Max Wideman, a well know project management guru, there is a much higher chance that the project will err on high side than the low side and to make things even worse I even think he weighs the potential variances differently too saying a SF estimate can be +25% or -10% off so you still have to take that into consideration. In other words there is a much higher chance your project will be 25% higher than your SF estimate than there would be for it to be 10% cheaper than that estimate.
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"Frenchy-"if it takes 1000 man hours to build a house in city X then building that same house three blocks away will take the same 1000 man hours. (all other factors being the same)" True, very true...."
I never thought I would disagree with you in this area but I must on this point to both you and Frenchy. Maybe someone will learn something here . Probably me , but here goes ;
From what I can understand you take past data to figgure your work . I dont . I go after it different than you . I finally settled on looking at business like an investor and I probably wont change because it works for me. I hire all I can out and I dont keep a crew. I dont believe in it for me. There are subs and single tradesmen who will work cheaper by contract labor than keeping a set of men . If I could take the best five men I know that would actually work for wages full time , I would be crippled in my efforts. Its time for me to fess up my point before I make you upset , which isnt my intent. Time to back it up.
I take what they give me each day , each week , and so on . Basically Im for sale for the highest paid deal what ever that might be tomorrow. I have found that there are crews to do a certain job that may be faster than another crew that does the same thing and charge less to boot . Sometimes an older sub gets comfortable and doesnt raise his price after sinking a lot of money in equiptment and a lot of time in a crew that dont need to talk about what they are going to do. They are forever more fast for two reasons . Experience together and lots of equipment. Normally a one man show sub isnt nearly as capable for man hours because he doesnt bring the equipment to the job , although he may be better , but rarely faster especially if the crew has a good leader. A lead man cuts hours wasted if hes worth his salt and uses each man to his best potential. But the equipment is the great equalizer because it beats men . I know that because thats how I gain my edge . I was the only man in the town I live in for sevewral years that owned an airless years ago. I had one of two sets of automatic drywall tools in the river valley for several years. List goes on , but the man hours are different on projects. Ive seen different supers beat others in the same area also.
Tim Mooney
Tim I think you may be taking what I was saying out of the context in which I was saying it with regard to what I think this topic is about. That being why is it so hard to talk about COSTS and PRICES. But then again I'm also a little confused on some of the things you were saying too. This might be hijacking the topic a little but here goes...
When you said "From what I can understand you take past data to figure your work . I don't . I go after it different than you . I finally settled on looking at business like an investor and I probably wont change because it works for me." Why wouldn't you still want to consider historical records and industry benchmarks as an investor? It's done all the time in the big world of Wall Street (investment) and in the management of the companies they are investing in.
" There are subs and single tradesmen who will work cheaper by contract labor than keeping a set of men ." Cheaper? Is that your real criteria? Or even the best criteria? Or is hiring a sub or single trades person that can do it BETTER than you could more important? And just what does "cheaper" mean? (Just as an sort of off topic aside I think the GCs that hire independent solo operators as "subs" just because it cheaper because it skirts around requirements of having to pay for workers comp are morally repugnant. They are robbing those workers of protections genuine employees get just to put a few more cents in their pocket but like I'm inferring that is a whole other topic to debate)
"If I could take the best five men I know that would actually work for wages full time , I would be crippled in my efforts." I not sure what exactly you mean here but it been my own anecdotal observation that a lot of contractors while good technical craftspeople are terrible people managers or production managers (which is different than project management) and therefore just shouldn't have employees and are better off aggregating contractors and services as GC (project management). The disciplines of keeping a group of employees working economically and productivity are different in many regards from those of a project aggregator (GC/Project Manager). And then again it seems to me a lot of GC/Project Managers suck at that too and would be better off as a trade specialist. I hate to say this because I say this all the time but... it all depends.
" I have found that there are crews to do a certain job that may be faster than another crew that does the same thing and charge less to boot ." Okay yeah I got that
"Normally a one man show sub isnt nearly as capable for man hours because he doesnt bring the equipment to the job , although he may be better , but rarely faster especially if the crew has a good leader." Yeah I've found that's true a lot of times for a lot of reasons. (Those one man subs are often chosen by GCs though solely because they are cheaper per labor hour than the individuals that are part of a sub contracting company primarily because of that workers comp issue I mentioned above).
"A lead man cuts hours wasted if hes worth his salt and uses each man to his best potential." Yup that's for sure.
"But the equipment is the great equalizer because it beats men ." Nah,... it doesn't, that's not necessarily or categorically true. Sometimes yes, sometimes no and that's another worthy topic all together too. In my own company that's often very true and we do leverage that too but it not true everywhere.
My point in agreeing with:
is that for something like I mentioned earlier: .842 labor hours to "Install solid or architectural pre-hung interior door" (no hardware or trim) that's going to pretty much be true everywhere with everyone. Personally I hang that kind of doors slightly faster than that and someone else might be slightly slower but what I what I was trying to illustrate in my post (msg#37232.35) was that while we can discuss that .842 figure we can't really discuss it if we extend it out into a dollar based cost since there are too many other variables that make that extended number virtually meaningless.
I think what you are talking about is something akin to where we used to make a certain railing part by hand and that part took on average about 12 labor hours per foot to make. Now thanks to some new tooling we can make that same part in about 2 or 3 labor hours per foot. (I don't recall exactly off hand what the new number is). Making the part by hand and making the part by machine are two very different things in just the same way that finishing drywall by hand is different from finishing drywall by machine. Under those circumstances and in that respect you are absolutely correct that 1000 man hours to build a house in city X is not the same as a 1000 hours elsewhere.
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I dont have any real objections but Ill answer since you did such a fine job.
You and Frenchy both said I was out of context , probably so. Didnt mean to .
The reason I dont use historical methods is that its constantly changes. I can practice to run a race for a long time , but the only time it counts is D-day. If their is something to go wrong , it will on that day .[ Joke ] On one of my projects, [that I own] I dont make a money decision until I have to pull the trigger. Before that , I simply might not have all the data to make the decision . I dont really see what happened 3 months ago is going to have an impact on today. Bill might have taken a bigger job and material might have dropped or soared through the roof. If Bill doesnt do the same job he did for me 3 months ago , it wont have much impact with Joe doing it. All it gives is a ball park in that area. On the other hand , I do know my stuff in my head which is historical. I know how long it takes me to do peice work that I excell doing , but not remodeling for theres too many plusses and minuses. I do appreciate you doing it because it goes with what you do better. I take bids.
"morally repugnant"
Well, maybe so . That is my playing field where I live. I will build you a 3 bedroom 2 bath ranch for 40.00 per sq ft . Several others will too. Will you build me one? If you want to work here , thats what it "sells" for and you do the math. You ever hear about the dynamite and the game warden? You gonna talk or you gonna fish? On the other hand Im glad a lot of you live where it can be done . Here , Walmart pays better money. We are becomming the economical retirement place . Its not a great place for tradesmen unless they are retiring.
You wrote a very good post as usual and I appreciate the response. I would like to visit with you at a fest . Maybe Smiths place . Would be my pleasure for sure.
Tim Mooney
"You and Frenchy both said I was out of context , probably so. Didnt mean to ." Out of context! Like I never make that mistake or hijack a topic. Yeah right. I do it all the time too. I was just hoping to clarify things a little so that's why I said that. I thought we weren't really in any disagreement on the point you were making.
"The reason I dont use historical methods is that its constantly changes." Well yeah but if you track it you can start to identify patterns that occur and reoccur and you can begin to use all that as a guide to help with planning and estimating.
"I can practice to run a race for a long time , but the only time it counts is D-day." Interesting that you say that in that I am very big on planning and one of my favorite and perhaps most important quotes come from Dwight D. Eisenhower:
"I dont really see what happened 3 months ago is going to have an impact on today." Oh I don't know about that at all. I was pulling out data the other week to look at again from the very first project I did when I formed this company eleven years ago. I am talking with Frenchy trying to help compile and compare some useful numbers on timber framing yet I have not worked on a timber frame project in 15 years.
Yeah I know there is a voice here that stresses that we are always building "prototypes" so that's why estimating is so tough and demanding. I think that's whining BS and just an excuse for weak record keeping, poor analysis, and underdeveloped estimating techniques.
With my company we really do build one of a kind or first of a kind types of projects. Especially when we are building trade show exhibits and theatrical scenery and yet in all that work and all the more standard building and remodeling work that we do too I see tons of processes and patterns that repeat themselves over and over again and often estimating is just taking something you have done before and recombining it with other elements you've done before on another project and then just readjusting the quantities (well there is a little bit more to it than that but I'm trying to make a point).
"On the other hand , I do know my stuff in my head which is historical." I have found a lot of times what we recall in our heads is often based on how we want to recall it and not on what really happened. For example about a year or so ago I created a little timecard program that would work on my Palm Pilot so I began to record everything I did not just the trade work. What it showed me was I was spending literally 50%-60% of my time just driving around! I knew I was driving a lot but if you had asked me to plot it based on my memory I would have guessed 10-15%. I don't trust my head.
"I know how long it takes me to do peice work that I excell doing , but not remodeling for theres too many plusses and minuses." Once again I think those plusses and minuses can be plotted and then subsequently planned for. That .842 labor hours to "Install solid or architectural pre-hung interior door" (no hardware or trim) that I keep on mentioning stays pretty true but you might add a line item to modify it for a remodeling project where carrying the door through a finished and decorated house might add time etc. The actuall hanging of the door (or any other activity or task) pretty much stays the same it just that in remodeling activities there are lot of other little "micro-activities" that are tied to and/or wrapped around tasks that are the plusses and minuses I think you are refering too.
"That is my playing field where I live. .... On the other hand Im glad a lot of you live where it can be done . Here , Walmart pays better money. " Where is here? And if Walmart really did pay better money I would go and work for Walmart.
The same thing regarding builders hiring solo operators as subs to skirt around worker comp goes on here too. It's still morally wrong and builders that do it are treating those solo operators as chattel and cheating them out of the protections that workers comp provides and helps them skirt the laws regarding overtime too.
" I would like to visit with you at a fest . Maybe Smiths place . Would be my pleasure for sure." Rhode fest? Yeah I'm sure going to try and make that fest. I think it would be really interesting to put faces and bodies to all these posts I read here online and see if they fit what I envision these personalities really look like. I would certainly be my pleasure too.
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Hahahahaha. I had to come back as you take things out of context . LOL. Actually i did a poor job of explaining .
Walmart stands for Walmart Distribution . I dont know how big that building is but Im guessing 40 acres. Not the retail store. Sure enough once a feller figgures benifits plus incentive pay and such stuff as the roof over your head , it figgures better than a carps wages with no benifit help. Chew on the price I gave you and tell me you will build the same where you are . That price is for real. Rural Arkansas. I dont run the show we are talking about as the realators are doing that by being mass builders. I guess I could try to change it , but Ive done moved on anyway. I wont compete with them anymore because its too little profit for me and they are buying their listings. Ill probably fire up a commercial crew when I get to feeling better and yes Im legal.
Tim Mooney
Tim Mooney- "Chew on the price I gave you and tell me you will build the same where you are . That price is for real. Rural Arkansas."
Awww come on Tim you should know by now if you've read anything I write that I don't even know Square Foot estimate costs. But I have a pretty good hunch that wont even build you a garage around here (Katonah NY). Yup things sure are different around this country. I'm just glad I don't live in California.
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Fair enough,
a 25% error most likely on the low side when using a per sq.ft. price still gives a starting point..
Assume my banker tells me that I can afford to spend $250,000
The currant system is to call in some contractors and have them give you an estimate.. Assume that you are reasonable and get 4 or 5 bids.... that means that four or five contractors will need to go thru the education process and meeting and all that only to find out that they are over his budget..
Remember,
he's looking for a deal. (who doesn't ,especially on the most expensive purchase many of them make) he's also confused, why are there such differances in costs? Isn't it the same house on the same location?
If they vary by over 20% why shouldn't he keep looking to find that really hungary guy who will work just to keep a good crew together and not lay anyone off.. Why not ask for another few bids?
After all so far they've all beeen free and he would automatically discard anyone who charge him a bidders fee up front.. plenty of guys out there and maybe someone needs to make an equipment payment..
Since we aren't talking here about a work of art that only one artist is capable of doing (at least in his mind) but what he percieves as a standard three bedroom walkout (or whatever)
If he knows what a fair price should be he's much more likely to do a little reaserch and find out who does quality work on time and on budget. thus only a couple of bids are required..
Price two Lulls for me, Frenchy.
The first one you sell me will be a new from the factory and you know what you will have into the deal and a good idea what the factory incentives, if any, are. You can quote me a price for me to take to the bank pretty easy, right?
The second oine is a little different.
I want you to assemble it on my property with no shelter from the weather.
I will change my mind a couple of times during the process about what options I want.
You will need to manufacture some of the parts from scratch. Some of the steel will be good and others will have extra knotholes, oops - boltholes, and will rust too quickly.
This one will be different from the last one you built, and some of the parts will have changed and others will no longer be available at any price.
My banker and I would like to have your price by wednesday, if you don't mind.
Excellence is its own reward!
First I don't sell Lulls anymore.. I got tired of all the recalls the factory had from booms bending, frames cracking, and various other troubles.. That's the same reason I don't sell Cats anymore. weak carriages and tlit assembles, tippy jerky controls and a trouble prone brake system..
I sell Ingersol Rands.
(incidently if you want to call them a genaric name they are rough terrain teliscopic fork lifts, or variable reach fork lifts)
second.
When you are bidding on a house you take into consideration the difficulty of the job. I've never seen a bid where there is a penalty if something doesn't go according to plan.. here in Minnesota the price per sq.ft. (of framing for example) is the same & weather isn't factored in. 40 below wind chill or a foot of snow it all pays the same. Conversly there isn't a reduction in price if it's a wonderfull day and the birds are singing...
Now before you jump all over that, each framer usually visits the site and examines the blueprints before bidding.. that way he can factor in if the site will add undue burden or the blueprints are extremely complex and will require a lot of interpitation..
As for things changing. change orders cover that subject...
I realize there are a lot of varibles in a house or remodeling etc.. but there should be simple formulas for predicting things..
Framing costs for example.. framing in general costs x in new home construction and y in remodeling.. now you can factor in the variables and since they are subjective.. The young starting out framer doesn't see that hill as a trouble while the experianced pro would...
sheet rockin' for example should cost x per sheet or sq.ft. (added cost for complexity of course)
and so on..
Thus if I live in Minnesota for example and the local rates are .... I should be able to have an idea of what a house will cost to build..
If that is outside of my budget well then I won't waste a lot of contractors time, On the other hand maybe I can get a house built and evan have room in the budget for the garage..
decades ago when I was selling cars, it amazed me that some people came into the dealership and had no idea of what cars cost. I made a lot of money by being able to quote monthly payments (which is how most people buy cars) seemingly of the top of my head..
If the costs of houses were as easy to find out as the cost of cars etc. How many more homes would be sold?
frenchy... the difference is... you were selling the cars, but not building them... your income depended on selling them..
as builders, our income depends on maximizing the return on our risk... if some are content to make building into a commoditiy ( like bushels of wheat ) ....
god bless 'em !...
but that is not what the successful tradesman is doing.... it took me along time to figure out that i was not competing with the other builders in town.. if they choose to compete with each other... good for them...
i'm into delivering satisfaction to my customers... not competing with other buildersMike Smith Rhode Island : Design / Build / Repair / Restore
Mike,
I have no problem if you chose to market yourself at one price level or the other.. I assume if you charge more that somehow you justify that additional cost..
Good for you.
However, there needs to be a starting point..
It's not a case of how high is up or an unlimited supply of customers.. rather what is the basic charge to frame a house.. (hopefully here you'll refer to the first post) what is the basic charge to sheet rock a house,, what does the electrician make for the basic connection etc..
If I were to ask you to do something for me, I'd like to have an idea up front of what I'm getting into.. I'd know for example that I can afford the basic... and if your price differs I can then make a judgement if I feel that your charge is worth what you ask..
The rationality is the only way is to have a commodity price to compare things with and then compare the added value of what is offered.. That or I can get 30 quotes and have 29 people waste their time, or worse find out that no-one can do what I ask for the money involved..
Here in the metro area I would have no difficulty getting 30 quotes, perhaps in a smaller town or rural area that wouldn't be possible..
frenchy... you might get 29 quotes.. but if mine is the 30th, you won't get that..
i'm NOT selling commodities.. if i wanted to do that , i would have stayed in the new home market..
my customers know just where they're going before we start.. but if they tell me they're getting prices from others that i know don't perform to our quality level.. that is the end of our conversation..
Mike Smith Rhode Island : Design / Build / Repair / Restore
Serious buyers are familar with not showing their hand before playing.. If they get 30 quotes they are serious
What I used to do was shoot them in the foot.
That's salesmen Jargon for giving them a too low price that brings them back to me. Once they've spent a month shopping and are ready to buy I sit them down and spend some time with them.
I need to listen very carefully to what they are saying.. often the reason they are price shopping is because they don't know. They assume that quality of features are the same and need to understand why it's not.
This is the real art of selling.. pressure tactics don't work here nor will any "pitch" you need to relate one on one to someone in a very real way to fill their needs.. seldom is it really low price.. When you tell me that, I hear that you need a lesson in value.. (after all, how many Yugo's were sold?)
After spending a month shopping many of their illusions are gone and they want to deal with reality. It's a skill to disillusion people and still do business with them but that's what makes a pro worth his salary.
It works today for the contractor who grabs one of those equipment trader papers or goes on internet sites. They see used Variable reach forklifts for around $30,000 and assume that anyone selling one for more than that is somehow cheating them..
So they fly off to Texas or Penn. or whatever and go look at it.. A couple of trips later they learned that, "Hey, the price quoted was actually a decent value"
The fun ( or should I say the expense) begins when one of them buys either site unseen or doesn't know what to look for and brings it home.. ..
The sales dept that I have worked for in every company for the past 25 years seldom breaks evan.. usually they are supported by the service and parts dept.. Since most companies charge about the same to work on equipment the reason they do it is to generate service and parts business..
Some companies evan go outstate and buy those "bargins" and sell them as is.. Their reputation suffers but what the heck their service dept becomes profitable..
In construction, if someone is getting thirty bids, they are not shopping for a house, they are shopping for a price.
I don't sell pricews, I sell craftsmanship and satisfaction.
I'll still be trusted three years after the fact.
Not interested in selling a chance to upgrade later comparable to the service dept profits you mention.
Excellence is its own reward!
Piffan,
could it be that they need an education? They don't know enough about construction to accept anyones word for things so they find out for themselves.
PS the real pros don't tell you that you are number 30 anymore than a poker player would show his cards before the bettin's done..
In case you think I'm wrong here, how do you buy a car?
I am going to try and combine your questions, "why not figur it out for them" and "How do you buy a car" in this comment.
I just bought a van.
I spent a few weeks gathering information. Looked at leader pricing in the flyers for new ones, but I knew that if I went new, I would be ordering it with the fixins I wanted to make it MY custom for a twenty year run and that it would cost anywhere from 20 to 50% more than I was seeing in those ads. I was shopping price to get bracketed.
I stopped in at one dealership and he found ne a rig close to what I was thinking of, but after just skirting bankruptcy, I was not ready to bite on easy payments just yet. Figured I could limp along on what I have for another year or two OK.
Then I was roading along and the deal of a lifetime fell into my lap. Sometimes God provides when we slow down enough to let him. Got a sweet one owner '85 with 87000 miles for $2500.
That dealer only had to click a few buttons for three minutes to tell me price, availability, and payments.
it would take me two or maybe three weeks to figure a price to build a custom home for somebody.
That ois why I don't just figure it out for them.
If I built the same home over and over, I would have historical data for THAT home. I could quote it in a couple of hours.
If someone wants a ballpark only - they can go to Means online and enter their data..
Excellence is its own reward!
OK, You are the educated buyer type.. you need an education so you do research.
I'm certain that before you bought a new home you'd do the same.. go to the library and get books on the subject, check the adds in the papers, maybe go on line and ask the question etc..
AS you said you know that you can't get a custom van for stock prices so what you need is an idea of what a stock van costs..
Hmmm. sounds exactly like what I've been asking for..
Notice I didn't ask you what you would charge to build my house.. or any particular house, just an idea of what a stock van would cost.. err framing or framing or sheetrockin' etc..
Since I'm building my house so wierd compared to any that I've ever seen I know better than askin about myself.. but like I said from the start and repeated constantly it's not a particular house or whatever.. no one says that this much costs this much..
OK that's clear now, so you need to ask somebody who builds stock homes for a stock answer..
Excellence is its own reward!
what I notice during my construction: The material prices was changing daily at the supply house, just regular economic so it was hard for me to lock down a budget. I really don't see how yall do it. I came in about 15% higher than what I first figured. The small items killed me.
.
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
Edited 12/1/2003 7:52:53 AM ET by BROWNBAGG
One final point Mike,
Don't for a minute think that your income doesn't depend on selling the homes..
Untill you sell something, nothing happens..
frenchy, It is not possible to do custom remo or building for manufactured home prices or under that kind of pricing structure.
But just for the sake of discussion,
Al Trellis is from your part of the country. He is a consultant now, don't know if he stiull has his fingers in a building company or not. But he recommends pricing and selling the way you are describing. He is more of a marketer than a builder, from my point of view.
He gave a talk at the show in Worchester last Feb and as I remember, he recommended having only six homes to sell with a few variations with options of that home. He prices out all those options ahead of time.
i.e.
Four colours of carpet available.
You want blue?
Sorry, Can't help you
three kinds of kitchen cab package available
You want beaded board?
Sorry, Can't help you
We have this, that and those. Pick one - there are the prices for each.
<me again>
In building a house, there are an infinite number of variations and options, often with each influencing others.
For instance, If I put together a bid for a basic package, in your floorplan, and then you want to built it with travertine in the kitchen instead of vinyl, it is not only the cost difference in finish materials and installation that changes. It changes the framing also in order to have the load bearing capacity and the same finished elevation. There is almost no single change that can be made without changing some other connected item and adding cost.
If you want to average it out, go ahead. I need to make money and I can't provide for my family with averages, especially at three projects a year. I need profits to feed us.
The Ingersol Rand Factory can do it because the make how many thousands of units per year? They make no money on the prototype. Every house or remo is the prototype, unless you build more than six or ten of the same one every year..
Excellence is its own reward!
Piffin,
What you just said would be taken by most as "sales ptich" ... I know it's not so because I understand both building and selling..
No place have I said that you should sell something for less than a reasonable profit..
The world is filled with people who want homes.. how they by them varies. Some may say build it this way I don't care what it costs, (Darn few) some may take the time to learn enough to make an informed decision (darn Few) some get a couple of quotes and hope for the best ( a fair amount) and most want to know what it costs and what they'll get..
Now why not figure it out for them?
Frenchy, I haven't read the whole thread, but one reason pricing isn't discussed in forums like this is US anti-trust concerns - discussion of pricing between competitors can look like "price-fixing."
And, yes, it's stupid to think a bunch of small time contrators with too much time oin their hands could actually fix prices, but sponsors of forums like this pay big bucks to high priced lawyers who tell them "don't take a chance - just responding to an anti-trust inquiry from the justice department is way too expensive."
And heck, if you're going to be willing to pay someone a few hundred dollars an hour for their advice, you'll probbaly be willing to take it.
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Your concern about anti trust while far fetched, probably has merit..
Yet I don't hear tauton press ask us not to discuss such things..
The question begins with who can you trust?
I'm certain that every contractor claims they are honest and all of them do above average work, some evan do exceptional work.. I've never in over 13 years heard a contractor tell me that he does cheap work or that he's alittle careless in his work. Yet visit any development and you'll find a lot of examples where that is indeed exactly what has gone on..
But this isn't about selecting a contractor.. It's more about the start of the process.. How does Mr. and Mrs. Joe Average decide a home budget? It doesn't do anygood to find the best contractor if the budget can't afford him.. nor does it do any good to just go price shopping (at least untill you know prices).
If you go into a contractor and say, "I want a home and this is how much I have to spend." it's a lot like showing your cards at poker before the bettin' starts..
I couldnt resist this one.
You have made this pretty spread out . Youve compiled what contractors pay subs with the base price of a home and thats two different ball parks. You can get a home priced through a MLS system using a broker if you want to buy one. The customer has no business knowing what our cost on a project will be , only what we are selling the job for and thats the business as I know it. The mechanics in town shop pricing at the parts houses and they get great discounts so Ive heard. I dont get any discount so I trade at a big parts house thats nationwide and they dont give anyone a break. [kinda like walmart] The private business selling parts is going away because the mechanics are now in line with me. Same as Lowes and Home depot . The builders end up in the same line and not too much discount offerd to us .
On the other hand a home owner wants the same price getting his or her drywall hung as a contractor pays ? I dont think so. A contractor is bread and butter through hard times. A homeowner is a place for a sub to make it up. The pricing is not the same where I live , even if the material is close to the same . Yes we get deals on materials HOs dont get but it takes constant pressure.
My statement is this ;
Contractors get paid for knowledge , not giving it away.
Tim Mooney
Tim,
You are takin' bits and pieces of the conversation and twisting it around..
It isn't about cheatin the system..
please get that straight.. it's about makin the decision to build a house or not..
If you want to tell me your costs well,... good.. I guess. But that's not what I'm askin'
What I would like is a starting point..
How can I calculate what a house should cost? Where are the price breaks, should I build a two story or ranch, which costs more to do? by how much? Maybe if I like a ranch I make a trade off, buy more land further out where it's cheaper. 0r less land but closer in.. that sort of question needs answers
Let's say that I said yes build me a home..
Someplace and some size and I 'll tell you after bids come in how big and what design to make..
It's a chicken and egg thing.. I want a house. You want me to decide where and what kind. I don't know untill I see cost projections,, Hmm,... too expensive let's start all over again..
Same applies to remodeling. I can spend my money adding an entertainment room on or go on vacation, or buy a new car etc. .. which do I know up front how much it will cost?
Remember fear of the unknown is terrifing to most people.. they will do without rather than venture into the unknown..
Wow I've been away from here for just a few short days and it seems a whole lot if interesting stuff has popped up. My own thought on this...
"Heck you can find all that about vacuum cleaners and sewing machines.. Why are houses so differant? " First of all talking about the COSTS to build a house and the PRICE that a house sells at are two different things and as I think some of the comment I've read in this discussion alone are evidence that we aren't that clear when we talk about money if we are talking about COSTS or the PRICE and my own observations in talking and working with other contractors I have often found that a lot of contractors don't understand the differences in what those two terms mean either.
As for more specifically addressing "Why are houses so differant?" well for one thing they are all very different in among themselves. There may very well be 5000 different models of vacuum cleaners built by 100 different manufacturers to compare to each other whereas with houses there may very well be several million different versions of homes in the US built by several hundred thousand different contractors.
Another problem is regional. With what a contractor in Dallas Texas charges as his marked up billing rate I may not even be able to hire a carpenter for here in NY offering that as a just a wage.
Regarding "For example why can't we discuss framing costs? a simple three bedroom ranch is this much per sq.ft. (on average) here in (city) Add some cavots if you are worried. normal flat lot with a square foundation.. etc.." Well talking about square foot construction costs even if we account for the regional differences and even if we talk about a typical simple standard type of home (and what the heck is that too?) still doesn't work since SF building costs (due to the inherent statistical and mathematical nature of a SF costs) are notoriously inaccurate. They are often described as typically being ±20%. 20%! Right there that's a lot of variance and I know from both my own experience and how that ±20% is derived (it's considered to be one standard deviation) that the high and lows are even greater than that.
I got in a debate with a fellow back in September of 1999 in the old Remodeling Online forums over the relative merits of Square Foot Estimating versus Unit Cost or Systems Estimating and I swear ever since then I been looking and looking for a discussion in forums all over the net (not just here) where the discussion of Square Foot Estimate numbers provides worthwhile or useful information that I could use for something, for anything, and I have yet to ever see such a discussion.
You'll recall the other day when I asked you if you were a Timber Framer well that was because I was hoping ( and I still am) that we could talk about the COSTS of timber frame fabrication. However, as I just inferred above, I think talking about those costs in terms of the the size of the structure, in terms of SF, is sort of useless. But talking about the labor hours assigned to a database of tasks and activities related to timber framing then we're talking about some valuable information.
And you'll notice that I'm talking about Labor Hours assigned to a task, not dollars, and that's because I wouldn't be at all surprised if my labor costs here in Westchester County NY aren't twice or close to twice what your paying for (I've been under the impression you're in the rural midwest??). I created an estimating program that in it's database it says cutting a Sill corner joint, half-lap joint with through tenon is figured at 2.780 labor hours per joint. Your cost per Labor Hour might be $38.00 per hour whereas mine might be $52.00. Your cost for the joint would then be $105.64 where my cost would be $144.56 (36% higher). And then again since we maintain a shop whereas you might not so our markup on that might be higher again like 1.64 as to your 1.5 so the PRICE to the end user, the client aka customer, would be again potentially very different. $158.46 to $234.18. Now it's a 47% difference! So you can see all the potential variables taint and distort the information data pool when we are talking about money.
So any discussion of money is sort of pointless unless I know what your paying your staff and what your overhead and markup are. However if we talk Labor Hours rather than the monetary extensions of that 2.780 labor hours figure to cut a Sill corner joint, half-lap joint with through tenon....
That we can discuss and share notes on!
Am I making any sense?Talking about the Benchmark Labor Hour figures for tasks I think is the only worthwhile discussions we can have and even then there is tons of room for differences in interpretations and debate as to whether or not the figures are the correct ones to use or not.
Did you ever read my short explanation about The Hidden Dangers of Square Foot Estimating? Don't get me wrong though I do think Square Foot estimating has its place. It's very useful for setting up project budgets and parameters when projects are still in the planning stages but in terms of using it to determine final bids or selling prices I think it fails and I think it fails miserably.
Another reason that I think there isn't much talk about costs, production rates, and pricing is that unfortunately there isn't a whole lot of real solid knowledge in the contractor community on the subject. Sorry to say but most of us are in this as a business (and I use that word loosely) to create jobs for ourselves and we are often working for wages. How many contractors do we see in these forums running so called businesses that don't really understand what a COST is or the concept of FIXED and VARIABLE OVERHEAD and just what constitutes a "professional" markup? Hey I know they are out there because it wasn't all too long ago I was one of them too.
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Your point about costs VS price is well made. English is such a slippery language that we sometimes use them interchangeably.
OK for the record.. Profit isn't discussed here. People earn what they earn,, This isn't about cheatin' anyone of their profit, rather it's about learning what is a fair price to pay for something..
I know I'll repeat that another thirty times at least..
Second I'm trying to eliminate the variables..
We aren't talking about finished houses or anything that I can buy.. What we are trying to do is establish a starting point so someone can make the decision to add a room or buy a Porsche, go on vaction etc..
Think of it this way.. you don't decide to install a GPS system in your Porsche untill first you decide to buy a Porsche.
Once you've decided to make that purchase then you'll listen to he cost and benefit of a GPS system.. untill the decision is made frankly you don't care..
Fear of the unknown causes a lot of people to avoid building..
what is a fair price to pay for something..
Define "fair price". It has been said that a fair deal is when both parties walk away equally pissed or happy.
Second I'm trying to eliminate the variables..
Can't be done.
2 identical floor plans side by side could have a $5000 difference in window costs, $20,000 in roofing, $50,000 in kitchens.
If you are really set on trying this (for a sales technique, maybe), talk to the bankers in your area(s) and figure out what some typical prices for typical homes in typical neighborhoods run. Of course, you understand that if you do this you will not see any clients who want anything anywhere near typical until your data is out of date (|:>)
SamT
Sam T
Once again,
eliminate the variables.. we aren't talking about a specifc house or windows or drapes..
we are discussing what it costs to frame (for example, a square box) If It takes three hours in memphis and three hours in New York then the only varible is is the differance in labor costs.
Or If you want to talk about whole houses, then simple basic ranch type house with no frills.. No problems and we aren't adding land and other costs in..
Years ago one of the lumberyards sold the material packages for various houses.. (heck, they may still do it) I remember at the time a ranch house cost $11,000 some odd dollars.while a larger two story cost $18,000. Had picture up on the wall with prices & changed on a weekly basis..
Add the labor involved and now we have a working number.. (NO it's not gonna cover everything but If I'm trying to decide between a ranch and a two story there's the material costs, there's the labor, and the rest should be roughly the same..)
What I did was count evert 2x, plywood, window, door, counter, insulation, yd of concrete, block, dirt, etc. Every nail and screw to build the house. everything. Then I went to Lowes, Hd, etc and got prices. Threw in 10% for tax 25 % for extra, and I was no where close. I had no labor because I did it myself. I controlled cost like scrooge and was still not close. The daily price increase at supply houses, killed me. About 10k over on a 50k house
Figure how much you can build for and add 50% thats materials only. On labor about $1000 a day. and thats lowball. then you got equpiment rental, delievery charges, permits.
You want to know how much, start counting.
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
When I did my house I did the same exact thing.
I drew the plans to show not the finished exterior, but instead, the framing skeleton. Studs, joists, rafters, etc. Counted all the pieces, priced them out, and came up with my costs. Did that through the whole shebang. I got bids for, and subbed out, the excavation, well, septic, foundation, and drywall. Did everything myself.
For the most part, most segments of the construction came in as I predicted. Some a few hundred more, some a few hundred less. Overall, came in 2.3% under budget. Mostly due to the lumberyard being less than HD on some items, then hitting HD on the match minus 10% deal. Bought a few things through HD, but I wouldn't dare run a business off them. Those few 10-percents added up to a few thousand, and when I was building my place I was financially as tight as a drum, always looking for the financial bogey monster to come and stake a chomp out of my budget. Forunately, it never happened.
Spent that 2.3% on bigger and better appliances.
frenchy... one of the things that makes it impossible is that you lump new construction and remodeling and additions in the same basket..
they're not.. they bear almost no relation to each other..
new construction also has several subsets: starter homes in large tract developments
so-called "custom homes " in tract developments..
real one -off custom designed homes by custom builders
custom homes by tract builders
when you get into additions.. most additions do not have an economy of scale that allows for a lot of subs... a lot of framing crews do not want to worry about tying in additions to old structures that are out of plumb, out of square.. need corrective surgery due to rot or faulty foundations..
we do a lot of additions.. when i have a potential customer.. we sit down, i listen to their wish list.. we look at our presentation book with typical jobs.. i mention different prices of those jobs.. real world.. real other customers... real numbers..
i might say.. "based on what you told me.. you project seems similar in scope to mrs. jones house that we did the addition for last spring... their project cost $170,000..
yours should be a little less... or a little more..."
then we talk about design.. and budget.. i get a design contract to design their project based on a budget range of construction..
the construction phase PRICE will come AFTER the final design.. and at that point they can choose to hire me or not... but they will have already paid for the design..
anyways.... construction costs are not transferrable from one type of project to another... new house, flat ceilings.. skimcoat plaster & blueboard might cost $1.00 / sf...
a new ceiling in bathroom might cost $6 - $20 / sf..
another way of looking at it.. if you want to know how much a road will cost, you don't ask a homebuilder... and if you want to know how much a house will cost, you don't ask a roadbuilder... and remodelers can't run new construction jobs as efficiently as new home builders can... nor vice-versa..
now, sometimes, a customer will hire a particular contractor because they like the way that contractor operates.. or they like his integrity... or some other non-quantifiable reason..... i get a lot of jobs based on non-quantifiable reasons..in other words .... cost is a small part of their concern... it is a large part of my concern.. so it is up to me to convey to my potential customer how much this is going to cost them... i always find a way of doing that.. so do most contractors that have been in business for a while..
but if you call me up and say .. " hey , mike.. what do you get for sf. price on additions?"... i 'll politely tell you that i don't use sf. pricing, but i'll be glad to sit down and discuss your project..Mike Smith Rhode Island : Design / Build / Repair / Restore
Once again,
I'm not trying to lump anything to gether.. I asked for a basic box price simply as a starting point.. of course there is a differance.. no one is disputing that.. yes we can beat to death the varibles such as trim cherry or MDF,. Brick or stucco and gloss or flat paint..etc. etc.
should I list the varibles that influeance the contractors price?
does he need to make equipment payments? is the crew gonna break up if he doesn't land another job quickly ? is he in it for the short term and just needs to earn a wage or a long term and worries about how he will be percieved?..
Does he have good credit so he can get the job started quickly or is his credit so messed up that will delay the start.. Is he an experianced old guy who knows all the solutions or is he a fresh young face who just wants a start.
Does he pay a fair wage or just hire off the bench (barstool) does he have insurance or is he scaming that too..
None of the above will change the numbers of rooms or the square footage, yet they dramatically will impact the houses cost..
Please get beyond that!
Someplace there is a starting point..
someplace a nice couple needs to figure out a budget for what they want and know that when they got it they paid a fair price for it..
what a bunch of BS... the people who are responding to you don't take jobs because they need to make an equipment payment..
and taking work to keep a crew going is skirting with disaster..
you arn't going to get any pricing that will suit you here.. you can certainly get it the way you described.. but you can't put "good credit" and " taking a job to make an equipment payment" in the same list of attributes of a good contractor..
what you are really looking for is predatory... trying to find someone dumb enough or desperate enough to take money out of their pocket and make a donation to the homeowner's equity...
i've done that in the past.. so the school of hard knocks has taught me to stay away from what you are looking for..
i already told you how to get your starting point... set up a meeting with the company you would like to do the work... but if i think i'm just being used as a stalking horse... it won't be meMike Smith Rhode Island : Design / Build / Repair / Restore
I agree with that .
Tim Mooney
Mike, I didn't say that,, what I was trying to say (isn't language a slippery thing?)
is that one contractor may make a desperation bid while another contractor is busy and wants a reasonable return for his efforts..
In either case the sq.ft. and the type of house are the same.. To a one time home buyer it would be hard to understand why two guys could be so differant in the same house..
BUT!
That is much further along the process than I'm talking about..
Again I'm talking about the start of the process.. where the guy wants to decide to buy stereo equipment or build a new house..
frenchy... the start of the process requires some homework... you cruise until you see something you like, you stop and ask who built it.. then you call them up and say " how much to build one just like so-and-so's over on Whittier ?" on my lot..
most will oblige.. and even give an update for inflation..
there are so many components to the process that ballpark figures just don't make sense... are we talking about the little league park down the street, the triple-A park in Pawtucket, or Wrigley Field ?
someone has to go one-on-one with a builder.. and THAT builder can relate historical figures about what they've built in the past.... and adjust for inflation..
but if the prospective homeowner isn't going to be forthcomming with a budget, then both parties will be wasting their timeMike Smith Rhode Island : Design / Build / Repair / Restore
Mike,
You are asking an awfull lot of someone who only may have an interest.. You assume someone will ask (most won't) you assume the builder is right there (you can't make profit on a house you've already sold) You assume that the buyer is willing to disclose a budget (see my comment about showing your cards before the bettings done)
Ever hear of marketing? That's the study of the ways people buy things.. when you are talking about low ticket impulse items you can sell by featuring features and benefits (or do an even better job by having a pretty girl smile and hold the product up..)
Major ticket items seldom are impluse items they need motivation and justification..
part of that justification process is cost benefit ratios. back we go again to what does a house cost.
The harder you make it for people the less you will sell.
I see it all of the time,
Green Arches estates from $285,000 Mill Pond town houses from $175,000 Pleasant Meadows from $895,000..
and so on..
Remodelers have a particularly difficult time of it.. Often a couple will see a development and the prices are posted right there.. Should they consider doing a remodel or just sell and buy in the new development?
One way they have an idea
the other is full of unknowns..
Oh they realize that they won't get a house they want for the price that's posted, but it's a start..
The budget thingy.
This goes along with at least part of your point in this post I hope. I appreciate Jerrald doing his leg work keeping up with historical happenings in his trade because Im sure it has helped him for repeat work. It works for him and its good advice for those that do the same things. I slept over that and the budget thingy. Seems you are doing the same thing also . [doing repeat] My wife runs three plants for one boss . He wants a budget. She can do sales projections, cost analasyis , etc. In her view a budget sets her in a track . She doesnt want to be in one . To her its a coaching job in major leauge in sorts. If she is not getting results in one area she plugs another option in and then another till something works. [ thats my words] Her way of describing it is that she juggles decisions . Its a day by day process that changes daily. Nothing has remained the same , even the bottom line. She and I both think that each day offers a chance at another deal , at least they are passing by us. If I live to be a 100 , [ doesnt look too good for that ] I will never understand how a budget works to the best advantage in sales . It reminds me of sg ft pricing.
As Jencar says : what ever works
Tim Mooney
ramble
I've found this thread very interesting, for two reasons.
1. we've been thinking for a couple of years of an addition, but don't have any idea of what it would cost.
2. i was thinking of starting a business post retirement to provide this kind of estimate.
the business idea went away for the most part because the cost of producing a reasonably accurate price (say within 10-15%) would be too expensive. if possible.
the first (our addition) has gone no where because i've spent too much time on this forum and am afraid we'll waste someones time to find out if we could afford what we want. never mind finding someone. a major part of that. and what compromises would be necessary to get what we could afford so that we didn't compromise our wants away, ending up unhappy.
I'd love to be able to "play" with options to find out what we could afford and then go talk to someone about building the addition.
in case you're curious i'm talking (generally) 20 x 20 L addition to a 24x40 ranch full basement, sloping lot north west of Boston. the addition is a kitchen/family room, cathedral ceiling. there are lots of complications, like we already upgraded the appliances. would like no lally columns. etc.
i'm posting because the situation frenchy describes is a real one. can we get what we'll be happy with for what we can afford. can we find a remodeler who will charge a "fair" price. what's that? what we feel is good value for the $.
being able to know whether u are in the same section of the ballpark as your remodeler and the cost/price of the project is important.
there is/was a recent thread about someone getting a sprinkler system installed in a building. prices had ranges of $30k to $70k. that does make u wonder what the? so many variables? why do reroofing estmates vary so much. that's retorical i don't expect answers.
when i worked for uncle we would do an estimate/should cost, and when the proposals came in tried to figure out why the difference. but at least with our estimate we had an idea of where the ballpark was.
end of ramblebobl Volo, non valeo
I mentioned there was a need alright . I also said it would help me . The thread has merit in thought , I just dont see it happening. I think the reasons of why its needed and why its not out there has been answered. I dont think your situation is a ramble. Its an important discussion in my mind if we could settle it to do you and Frenchy some good. I think that honesty would be the way to approach it in contacting a contractor. I wouldnt mind ball parking something if they lived in my town. I will ask how others feel , but one thing for sure , it wouldnt hurt to make the call and explain it to someone you trust. Not trusting makes a problem I can see.
Tim Mooney
Tim.
think of both budgets and forecasts as the sights on a gun.
they help tell you where you want to go but don't actually aim the gun..
A duck hunter knows to lead the duck but it's his judgement as to how much.
What I do is start the year knowing what my income levels need to be just to pay the bills, then I add what I think I want to achieve this year and what it will cost..
If I hit the target great..
if not (depending on if I'm above or below my goals) I may use some equity to meet obligations or add to equity if there is a surplus..
If Ma and Pa Kettle want to plan a house they need to know about what it will cost.. if more or less than their funds, they can add or subtract accordingly..
No one would do like I'm doing with my timberframe.. Start without knowing what it would cost.
I had no idea and really didn't care..
To me it's just a matter of time.. If there isn't enough money this year, well then, I'll do more next year or take additional time to do it.. My only deadline is to finish before I die...
Somehow people think that either I'm so rich it doesn't matter or as I run out of money I'll do things cheaper and cheaper..
Neither will happen, the only varible as far as I'm concerned is time..
But how many people have that approach to things?
OK, so why can't anyone give you a straight answer? Because there is no straight answer.
You're right- you can go online and find out within a few pennies what a new Porsche, vacuum cleaner, Winnebago, etc., will cost- but a home is a different thing. There's no such thing as "typical" in homebuilding, unless you want to buy a tract house- in which case you can stop at the sales office and get a hard price.
Companies such as Means have compiled cost data for homebuilding for years. Remodeling magazine does it's Cost vs Value report every year for remodeling. These are great places for a potential buyer to get ballparks for what they might be spending- but they're just that- ballparks. If Means says your 2,000 SF house should cost about $90/SF to build, it may be $70/SF, it may be $110/SF (assuming it's the quality level the Means price is describing). At least those figures will tell you if you're out of your mind for thinking you can build your house on a $20/SF budget, or if you're plenty comfortable with the $200/SF you have available to spend.
So how does the buyer come up with a budget, if no one can give them pricing to start with? Well you need to determine what you can afford. If you can't figure that out, why would anyone spin their wheels wasting time priceing something for you? The most you can expect from a contractor in that instance is a quick ballpark- if you haven't invested any time in figuring out what you want, or can afford to spend, why are they going to invest time in pricing options for you until you find something that works?
Am I missing something here?
Bob
No Bob, you had an answer..
If one source claims it will take $70.00 it and it may take $70 or it may take $110.
That's a starting point..
again we aren't signing contracts here. we need to know if Ma and Pa Kettle budget about this much money they should be able to get a house built near that price.. Plus or minus all of the varibles..
If later Ma and Pa decide they can spend more they can ask about cherry trim or a better neighborhood etc.. If they discover they can't afford it No poor contractor has to spend hours doing work he'll never get paid for..
Frenchy,
Your best bet is to call a modular outfit and ask them about pricing. If anyone can deliver a factory-made, uniformly manufactured product that can then be field assembled in a week...
And if they can't give you fixed/binding/accurate pricing info, no one can.
Forget the contract will you?
Fixed pricing isn't what is asked about..
We could be just dreaming, or what-iffing
Think about the million or so reasons that someone would want to know what something cost.. Planning their next move or wondering what to do with the pay raise they just got..
The original source for the question is my sister wanted to move to the area and I didn't have any idea what it would cost for her to build a house..
Ever price a Lear Jet? Or anything you didn't later buy? Did you get serious about it and try to negotiate or just want to know?
Once in a great while I find something I want at a price that seems reasonable to me... But untill told the price how would I know?
>>The original source for the question is my sister wanted to move to the area and I didn't have any idea what it would cost for her to build a house..>>
Talk about withholding information...........
You're asking folks all around the world what a SF price (ball park starting figure) would be and the only concrete info you have given so far (right now) is the general location - your area.
Now you need to go further. What side of the tracks in which section of town and on which piece of property. On or off grade. Slope of property. Basement or slab. Single or multi story. Block, frame, ICF, Rastra, straw bale, Siding?? Rooms - how many, what size, what function?? Ceramic Tile?? Sheet vinyl?? Peel and stick?? Garage - attached, detached, how many cars?? Carport?? Porch?? Windows?? Doors?? Kitchen sink - Kohler or Sterling?? Tub - cast iron, steel, acrylic, fiberglass?? Cabinetry - Mills Pride, Kraftmaid, Custom?? Drywall?? Plaster?? Paneling??
And the list goes on and on and on and on............
Then, when you have supplied all the info, a price would be given and then, for that particular house and only that house, the price quoted can be divided by the total square feet selected and a SF price known.
But it all starts just as Jerrald Hayes has posted numerous times.
Yes, I have priced aircraft. What you see is what you get because all the questions have been answered right down to the color of the carpet and the Bendix/King package in the panel.
Ralph,
you couldn't be more wrong!
Talk about taking one sentence out of context and focusing on it..
The matter about my sister is over and done.. an early post pointed that out.. It's not relavent except as to the motivation to ask the question.
like many others you want to skip the information stage and go right to contract signing..
I've repeatedly asked everyone to
Please forget the details!
to repeat again,..
Imagine you are Mr.and Mrs. nice guy who got a raise or bonus ...whatever, he's considering maybe adding to his house or building new. (or buying a Porsche, taking a vacation or whatever)..
the only way he can get numbers to work on is if he calls a contractor in and if he's the kind of guy who worries about things get several bids/quotes.
Like most people he doesn't want to show his cards untill the bettin's done so you won't get to feel his wallet before you make a bid..
since you are a complete businessman you'll ask a million details about the very same thing you pointed out.. tile or hardwoodfloor etc.. Not knowing the relative costs of each he may put in what sounds nice and if he winds up with a too expensive house he can always buy the Porsche instead.
Land too big a varable? Fine leave it out. Remember we aren't signing contracts here, we are gathering information.. leave that varible out.. need details to make a well informed quote, fine! leave them out. again we aren't signing contracts here we are talking budgets..
worried about the difficulty of the jobsite, fine leave it out..
we aren't signing contracts here we are gathering information..
Imagine if the rest of the world did buisness your way.. How do you wants your eggs cooked? Overhard? that will be an extra 2 cents, So you want your bacon extra crisp, I'll have to check gas prices before I can give you an estimate. And you'll have to tell me what kind of jelly you want on your toast before can have my secratary type you up an estimate..
I just came from where a contractor with a signed contract is squirming because Daddy doesn't like the cabinets. Legally the contractor is right.. He does have a signed contract with cabinet choices signed off.
however he's a good businessman who'll find a solution. But that is my point..
The most accurite quote in the world with signatures and everything do not make the deal yet!
Regarding a Lear Jet,
I glanced at a couple in trade a plane and sighed, won't happen in this lifetime.. but that was all it was.. a mild interest..
However if the plane I'd selected would have been affordable, things then would have gotten a lot more serious.. Cost of maintinace, fuel hanger etc. Then a decision would have been made to make the call.
What contractors and builders are doing is holding the basic information and waiting for the call first..
bs... you started building your house without knowing what it was going to cost because you either didn't care.. or you didn't want to spend the time to figure it out..
i spent my youth holding people's hands and helping them with their budgets.. and wasting my time..
it is easy to expend anywhere from 40 to 100 hours developing a firm price for a new house... how many 40 to 100 hours can you throw away ?
not me... no more.. i am very helpful.. but not if i detect the type of tirekicking going on that you are describing...
i'm not selling lulls.. or ingersol-rands , either..
i'm selling one -off custom designed projects... if you want one... let's talk turkey
if you want low price.. go someplace else.. you won't find it hereMike Smith Rhode Island : Design / Build / Repair / Restore
You are correct when you say you don't have 40 to 100 hours to throw away.
So I suppose that every time you've made a bid you've been successful?
Don't you have a method of screening out tire kickers?
Why not share that method?
The easiest way I know of is to give rough ballpark numbers and ask if that's within their budget..
you need a way to get those numbers..
that's what I'm asking for here..
The surest way to offend someone serious about building a home ( or blow off a potential client) is to ask them to prove they can afford it.. (especially since they have no idea of the money involved)
Frenchy,
As far as new construction is concerned, What you want already exists-just call Pulte Homes, Ryan Homes, Wayne Homes, you can get a firm price on a particular house in one of their developements. But even those people won't give a firm price on one of their established models if it's to be built on your lot, until they have met with you on your lot and assessed what costs will be involved with your lot.
And as everyone has told you a thousand times, in remodeling, there is no such thing as a standard job. No matter how many different ways you ask, that one fact never changes.
It baffles me why you can't understand that, especially with the project you have going for youself.
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
around here, if you want a house, you find the one you like and then go to the contractor that own that plan. Most contractor build the same house over and over. If you want custom you call the guy on TV that velco the trim boards on.
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
Frenchy,
You need to talk SF estimating here, there is no other way to do what you want.
The numbers you need are $90.00 to $500,000.00 per SF, not counting land or legal costs. Legal cost, include, for the sake of this discussion, all costs mandated by any authority.
which brings us to the next point...
define SF.. is it ?:
1st floor footprint,
all floor footprint,
total heated space,
all heated space with a 4' ceiling ht,
what about basements,
and garages,
and porches,
do enclosed porches count the same as heated space?
uh, oh..... who's making the rules ?Mike Smith Rhode Island : Design / Build / Repair / Restore
That is another can of worms you opened.
Our town uses 'heated space w 5' height' as the defining factor. Saved me a few $$, for when I finished my attic (850sqft) I didn't add heating. I do have ductwork for AC and general circulation, but didn't add heating. I have RFH in the rest of the house and the attic is so well insulated, with a few lights and a body or two it hangs at about 68-72F. It's pretty cozy. Some new talk about changing sqft to be defined as 'conditioned space...'. I'd say my attic is 'conditioned'.
So, according to the current tax rules, for taxation purposes my attic is 'free'. Every little bit helps.
We did have a somewhat high-profile case in the next town over last summer. Owner contracted for a house, believe it or not, at a sqft price.
"House is gonna cost me this much per foot?"
"Yup."
"Okay, make it this big."
Things got hairy at the end when the builder tagged on 32K for septic, about 4K for the well, roughly 5K for underground utilities, and another 4 or 5K for an asphalt driveway. Came close to 50K in extras.
Mike,
by my rules you measure the outside and add the number of floors..
(unless we're talking taxes here and then I count only the inside actual living spaces not counting closets, attics, garage etc.)
Frenchy,
Just an outside-the-box thought........
I wonder if you might get some good ballpark information from local realtor and a local banker who deals with mortages. These people see a broad spectrum of building activity and usually are pretty savy. They've helped a lot of people wade through the process, and they've probably dealt with most of the area's contractors. They should have a good picture of the local economy. It's their business to know what things cost.
Old Fred
Fred,
It's not for me..I'm building my own place* so frankly I don't care what things cost..
It's just that we're 87 posts into this discussion and nobody is willing to talk about the most taboo of subjects, the cost of a home...
* since it's a double timberframe using Black walnut timbers etc. I doubt it's relavent to the discussion anyway..
Edited 12/4/2003 4:16:35 PM ET by frenchy
frenchy, I think what we have here is a faiure to communicate.
You have never stated what you want to use this figure for. It is obvious to me that you don't want the cost of a specific home. I thought that maybe you wanted a way to educate YOUR clients so they could be prequalified. Then I thought you wanted a way to help them design a home.
Our friends here are trying to tell you (as if you did not know) that there is no way to give specific numbers without having a specific plan.
What do you want to accomplish with this information...the cost of a home?
How are you going to apply it?
.
.
.
Are you just playing devils advocate and trying to teach us something, because the train of thought you seem to be following here just does not sound like you, someone who has been around the block and around BT as long as you have.
If you are just being a DA (devils' advocate/dumb a$$), stop, because it is insulting to me that you don't think that I can, or that I am not willing to, talk about what is really on your mind.
SamT
I think you hit the nail on the head. Frenchy's approach is insulting. He talks as though none of us would sit down with a customer and have a frank discussion about costs for a project they are seriously considering.
That is absurd. And so is the comparison to looking up the costs of manufactured items whether they are Porshes or hi-lifts.
Sorry Frenchy, you might be the hottest salesman in the free world. But you don't design the equipment you sell, you don't build it, you don't service it, you don't have to set up the production facility, you don't have to purchase the equipment necessary to build your products, you don't have to hire, fire and manage the labor force that builds your product, you don't have to deal with the governmental authorities that moniter the construction, application, regulation, and taxation that your products involved, you don't have to deal with Worker's Comp, Bureau of Employment for your employees.....I could go on and on.
You're just the salesman. We however, must do all the things I mentioned above, and more.
You act like we have all the time in the world to expend on sales. If we don't sell, we don't eat. We know only too well how important sales are. But we are risking far more than a lost commission. When was the last time you had to fork out your money to cover the miscalculated manufacturing cost of one of your products?
When was the last time you had to pay an attorney to defend you from an injury lawsuit on the production line?
When was the last time you had to defend yourself against an OSHA issue on the production line?
When was the last time you had to make the payments on your customer's equipment out of your pocket or risk losing the entire cost from your bank account, without any possibility or benefit of reposession?
Sorry Frenchy, in our world, evrything doesn't revolve around the sale. We can't afford that attitude.
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
Svenny,
Nothing happens untill something is sold..
Nothing..
you won't need those lawyers or won't have to design or build anything..
Nothing..
You seem to worry about justifing your profit.. well you are wrong.. I hope you make a fair and decent profit and retire with adequit finacial security..
Hopefully my point will help you get there..
"Nothing happens until something gets sold" Well duh....thanks for the eye opener.
Guess you didn't read my post entirely. I paid homage to sales. I stated that if we (builders and remodelers) don't sell, we don't eat. How can I state that more clearly???????
In your world sales are the be all and end all. You make the sale, you get the commission. That's it.
If you get an #### hole customer, when your check clears, you're finished with him. We may be stuck dealing with him on a daily basis for a year!
I'm not justifying profits, I'm pointing out the fact that we have about a million more things to consider before throwing out a price than you do.
You seem to ignore the thousands of people that are required to come up with those handy catalogue prices you like to bring up all the time.
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
Svenny,
what you don't know about sales amazes me..
I have customers who on a weekly basis call and talk about equipment I sold them 12 years ago.. I have to take care of them because repeat business is how I make my living.. Many times contractors sell only one house or one remodle to a customer.
Have you ever talked to another contractor about an equipment supply house or a supplier or equipment dealer? Of course you have! That is how many of my pieces of equipment are sold..
By the way, when I sell a customer , he may rent for 6 months , lease for five years and then if he is tax savy have a residual that we can refinace for another 4 or five years..
So no I don't clear his check and run away..
Yes there are contractors who make my lifedifficult,, just like your customers.. yes I have customers who order one thing and then change their minds and yes I have to make them happy all along the way!
As for complexity,
I dare you to order a craine.. None are prebuilt. They are all custum and many of the options affect legal and safety issues. There is years of experiance and schooling involved in the selection of items.
I've been selling forklifts for 20 + years and can tell you that during that period no one I've sold to has ever been injured. Since accidents with rough terrain telescopic forklifts were becoming so common that OSHA changed the rules regarding operation of them because of the rapid increase in accidents,that is a point to be proud of.. Yes I know who OSHA is, I'm a OSHA certified instructor for both cranes and rough terrain forklifts.
I walk on job sites like yours all day long 5 days a week, I see thousands of contractors in a year and notice excatly how things are done..
when this post hits a hundred I intend to show you and others how simple what I ask is and how you and others can benefit from my experiance..
Let me be a bit humble here for a moment. there are many things I can't do.. some I never will be able to do and some I could achieve only with a tremendous effort..
Selling is something I do well and take a great dela of pride in.. When I complete a deal I know that the customer will be better off then before.. I know it because I've been told it countless times by the people who I deal with..
I'm certain it's something similar to the pride you feel when your customer see their new home.
Like you I take pride in the little details. The switch plates than line up exactly perfect the nice click of a well hung door, the beauty of a nice hardwood floor.
wih me it's getting the details right, like telling the customers which grease fittings need greas every week and which need it once a month (and showing them where they are) It's being tactfull as I explain how to smoothly operate the controls so they can place a window exactly where it needs to be..
In my entire life I've never had anyone who buys a forklift from me admit they didn't know how to operate it, but when I started in this industry there were fewer than 500 forklifts sold annually now there are as many as 15,000 sold so something doen't add up. So I show them how and watch them while they start off.
I learn a lot on this board, I felt it's time that I give some back, helping you guys maximise your sales and profit is what I'm trying to do..
frenchy,
Where do I start?
So you walk construction sites. So no one you ever sold a forklift to has ever had an accident. So you never ran a way from a customer. So you have to make follow-up calls to your customers. So you have to show them how to operate the equipment. So it takes twenty years of experience to pick the proper components out of the crane component catalogue to get just the right crane for the job.
So what? What is your point?
Any small business owner (whether he is in the construction business or not) has to do all those things you talk about. It is obvious to me that as good a salesman as you are, you're so honed in on the sales thing, that you are totaly blind to all the responsibilities that a small business owner like me , or Smith, or Hazlett have to face.
To you, the sale is everything. To us it is only one small part of the job we do.
You help pick out the proper options for the crane. Do you then have to build the crane?
You point out the salient safety factors on the forklift. If someone gets hurt on it does OSHA write you the ticket?
When the $25,000 deposit check bounces, does it come out of your bank account?
When the crane breaks down, do you have go diagnose the problem, gather up the parts, go to their shop and make the repairs for them?
No. You're the salesman. They may call you to faclitate handling of the problem, but those responsiblities land with the dealer or the manufacturer.
By the way, my business depends almost completely on repeat customers and word of mouth referals. I have done work for some customers for over 25 years. When I make a sale I know my customer has made a wise choice, I can only pray that I made an equally wise choice to work for them.
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
Edited 12/6/2003 9:19:51 PM ET by Svenny
In your business you are the contact with the customer,
In mine I'm that contact. the check bounces and I'm called, something happens and I'm called. the equipment doesn't start/ breaks/ needs service, It's me that gets the first call. In my truck is a set of tools, I know how to use them and often do repairs if it doesn't require parts.. (I don't carry those, unless a customer asks me to bring him out a... and I'll be going by{Or he's a really good customer})
I not only can get a ticket from OSHA I can be held legally liable..
In your business if the electrical system has a problem most likely you call the electrician. If a roof leaks you call the roofers..
Hmm,... it sounds like we have a lot more similar responsibilities than you imagined..
One area that we differ, is in marketing.. Correct me if I'm wrong, you do mostly word of mouth advertizing. It's the customers responsibility to find you, you don't go prospecting for them.. You've never made a cold call on a customer to see if he's interested?
You don't grab the phone book to call customers when your business slows down, right? If there isn't enough work do you take a pay cut to keep others working?
In my job, If I fail to sell not only do I not make any money, mechanics and secrataries go home unemployed.. Selling isn't the only thing, but untill something is sold nothing happens..
Frenchy----your persistence in this thread is unusually self-absorbed.
the people you are insulting are fairly bright individuals---as you well know. how many times do they have to explain to you that the cost information they could share with you is MEANINGLESS to you. If your sister---or sister-in-law ( I forget which) wants to build a house in a certain area------She should consult builders in THAT area!---
I am amazed that you would continue to badger guys clear across the country( like say Rhode Island)----because they won't give information to you that is none of your business---and utterly without value to you.
Frenchy---I deal in a very limited segment of what we ( for convenience)will call the remodeling industry---roofing. I couldn't possibly care less what mike gets for similar roofing projects in Rhode Island, or what someone gets in Canada---or someone else gets in Kentucky. Their numbers are of no importance to me.
I really don't have more than passing curiosity what other roofing contractors charge in my own town! I am interested in MY numbers---not their numbers. why on earth why I try to base MY sales on someone elses numbers? WE ARE NEVER SELLING THE SAME PRODUCT !
BTW---my business involves quite simple projects----a typical home building project must be a million times more complicated---making the info you are demanding even more irrelevant.
I'm trying to help here guys,, stay tuned..
let's back up a bit... how come you didn't know how much it was going to cost before you started building your home?..
too complicated... ? would have taken too long ?.. what ?
shazlett speaks truth, kemo-sabe..
it took me a long time to figure out being a contractor is like living in the kingdom of the blind... everyone wandering around bumping into things, trying to describe elephants to each other based on feel...
looking things up in books, written by someone who had never done these things..
eventually i realized that my price was no more right or wrong than anyone elses.. since none of them were based on reality..and reality is what i say it is..
after that.. i could look 'em straight in the eye and tell them their brother -in-law oughta build their house, since he knew more about it than me..
now... if i could only price my work like stephen does....
tough day at the health spa, shazlett ?....... hah, hah, hah..... good on you !
Mike Smith Rhode Island : Design / Build / Repair / Restore
Edited 12/5/2003 1:23:36 PM ET by Mike Smith
Fair question Mike,
I didn't worry because that wasn't important to me. (no I'm not claiming to be so rich money doesn't matter) rather I had other priorities.
Money I feel will take care of itself.. (gasp!) I mean I could control all of the costs and decide on values as I went along. why worry about those issues twice? Unlike most people I'm living in the house during the reconstruction.. so it's not like I need it to be finished to move in.. I live in a neighborhood that could easily support almost any amount of money I spend on this place, so I don't have any worries in that direction..
If I should run low on funds then I can simply do more time consuming craft work untill my funds are replaced.. My only limitation is time, I would like to finish this place before I die. Hopefully that is many years down the road.
I enjoy this, it's differant enough from my regular day job that it's still fun. I don't do many of the things most guys do, (hunt, fish, hang out in bars, etc.) and I find it much more fun then watching the tube.
I doubt you get many customers like that, so i guess it's not too relavent..(I wonder which part of the elephant I feel like) ;-)
hey, buddy... we both know what elephants look like.. they used to look one way.. Goldwater, Rockefeller, Chaffee..
now they look more like the days of J.P.Morgan... the robber barons once more rule the earthMike Smith Rhode Island : Design / Build / Repair / Restore
Mike,
It snowed pretty good here yesterday---and since running is bad for my knees anyhow----I like to climb stairs inside in a real stair well.
so,---15 story building. I currently do 80 flights of stairs up and 80 flights down------I will be up to about 150 flights in about a week-----then I will start sprinting them. hope I don't puke!
sounds like fun--don't it? I am to old and slow to play real sports---so I gotta create my own challenges.
and golf wouldn't work for you ?.. since most of your leisure time seems to be when the roofing season is over..
ya see, the thing about golf is, it's just like sex.. you don't have to be good at it to enjoy it..Mike Smith Rhode Island : Design / Build / Repair / Restore
Ok, here's your hundredth post- I'm waiting to see the light.........
Bob,
I typed a nice primer based on selling methods... Took me forever (it seems last night and tonight when I logged on it wasn't there. I'm sorry I know that there is probably a way to restore it but one thing I don't know much about is computers (and cameras) so bare with me while I retype it. probably won't be tonight since I need to get up at sunrise to put a floor in my house (right now I have a hole there)
type it on word , or wordperfect.. or somesuch.. then you can "copy/paste" it to BT..
so if it wanders into never-never land you will still have itMike Smith Rhode Island : Design / Build / Repair / Restore
Another thing:
"Nothing happens happens until something is sold..
Nothing.."
That is the mantra of the salesman. Puffy chest. Proud attitude. Confident.
It also puts the cart before the horse.
If there was no forklift manufacturer, how many salesmen would it take to sell a forklift?
You think it's taking a long time to build your house, if there was no crane manufacturer, how long would it take you to gather up the raw materials and build one, just to fill your first sale?
If you think about it, I suppose mankind did have it's first salesman before it had it's first manufacturer. After all mankind's oldest profession must have developed sales reps pretty soon after it was discovered............................
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
Salesmen have to have a confident attitude, It's the only thing keeping us going when the order book is empty and you don't have a good prospect in sight..
Less than one person in a hundred can make a living selling and only a very small percentage of salesmen make the kind of living I do..
Henry Ford sold cars before he hired his first salesman. When he did, he realized that others could sell better than he could and he would spend his time in other areas of the company..
Forklift/ crane /homes/ shoes, they are all products. Each is unique in it's own way and all can be sold by a good salesman.
If you are a good salesman, if your close record is commendable, then you should be telling others how to sell. If on the other hand , you've lost deals that you should have had, or left money on the table when the customer was willing to pay more perhaps you could learn.
I know I study the subject.. I've been doing it for well over 50 years and still learn something from others.. Please tell me how you sell! What techinque do you use to overcome objections? How do you deal with someone who asks for your best price and then comes back and asks for a lower one? If someone is willing to buy but being stubborn on one subject or area, how do you satisfy his need? What are the cardinal rules of negotiation? When presenting your bid what words do you absolutely need to say once you've presented the price? What is a trail close? Of the ten most popular ways to close, What method* is your favorite for closing?
* style, technique, system
did the rabbit go around the tree and down the hole yet ?
are you about to get to your real point ?Mike Smith Rhode Island : Design / Build / Repair / Restore
Here you are, rushing to the defence of salesmen, justifying their existance, expounding on how qualified you are on the subject.
That's great. I have never said that salesmen are worthless. And if I had a company that made widgets, I would want to have the most and best widget salesmen I could find, and I would pay them well.
However, you must understand that the bottleneck in my company (and most others who post here I suspect) is not sales. It's production. My ability to sell far exceeds my ability to fulfill my contracts on a timely basis.
If I sold one remodeling job a week, I would soon be hopelessly behind schedule. Close rate doesn't mean much in my business. I focus on the sure bets, and tend to walk away from anything that seems like a hard sell.
There are plenty of large, sales oriented, building and remodeling firms in my area. That's not the type of business I am interested in. I'd like to see a show of hands as to how many people who post here, own or are interested in owning that type of business. Sure, I could make a lot more money if wanted that kind of business. I could probably make more money if I was a salesman for one of those companies. But then I am no more interested in being a salesman than I am a computer programmer, or a an accountant, or a jewelry store owner.
Don't take it so personally that I or anyone else here doesn't share your passion for sales. I sell because I have to, not because I aspire to it. My passion lies in the creativity involved and pride of craftsmanship in this kind of work. Sales falls way down on my list of enjoyable activities.
Your last paragraph asks me a number of questions about my sales techniques. I have been in this business for 30 years, and have taken courses to improve my sales abilities. None in the last 15 years however. I prefer to spend my time on other aspects of my business. Early on, I tried to get those "hard sell" jobs, but I eventually learned that those are not the customers I want to work for. More power to those of you who want them!
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
sven: good summation..
especially the part about my reach exceeding my grasp..
i,too, not only have to sell the job.. but then i have to deliver it , hopefully at a profit..and i often get to the point where i have to put the brakes on sales to let production catch up..
right now.. i've got 2 guys shoveling snow.. while i look up some details..
didn't really have a "shovel snow" item in this project estimate..
Mike Smith Rhode Island : Design / Build / Repair / Restore
I've really enjoyed reading this thread, there has been a great deal of good sense shown, and just about every post, inculding Frenchy's, includes some gems. I particularly liked Svenny's point about sales not being the bottleneck, and there being no need to try to win every job going. I also liked Frenchy's point about reassuring the customer that they are doing the right thing. I guess we all do all of these things to different degrees but it's good to have the ideas spelt out as wel.
One thing that I have noticed is that customers like to feel that progress is being made on their jobs, even if they haven't officially started yet. I rang a couple the other day, their job won't start for a few more weeks at least (yeah, I've oversold too, trying to catch up) and they were pleased to hear from me, pleased to realise that I was doing my best to get to their job and that, above all, they didn't have to DO anything, that it was going to happen without their further intervention.
John
There's plenty of snow on my present job, but thankfully we don't have to shovel it. I've still got two roofs to do (every fall I swear I'm going to turn them down, but the sales are just too easy...Ha ha...maybe I should go after the hard sells after all! ;-} ).John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
Valid point Svenny,
Yet we all know that building works in cycles don't we? times when you can't beg a job and you're working in the red.. That's when your ability to sell will be called on. hopefully you will pick up enough to put you ahead of those who can't be bothered..
Great salesmanship will also help you land those jobs that are about salesmanship too (and we all know about those) the ones where they want just the right contractor and cost isn't the issue..
I'm passonate about my profession, (aren't you glad there's one less contrator out there to compete with?) Many years I earn more than my boss, yet none of them wished I earned less, they all want me to earn more because the more I make the more they make..
I'm used to dealing with difficult contractors. (what's that stuff that flows downhilll?) contractors deal with tough customers and pass that difficulty on down the line... Thus I found that if I can make a contractor happy, I really have a friend.. So to me the difficulty of selling is achallege to be overcome.
Hopefully I can pass on some of my knowledge to everyone here, who knows when that will make a differance in the final profit picture
So ok, when does the passing of this big secret information happen? I mean we are past the magical 100th post. Usually information is distributed when someone asks a question, in this case it appears you have been trying to sell the need for the information you want to distribute. But I can tell you are a professional salesman. You guys all take the long way around the barn in a conversation. DanT
Dan T
I answered it back at post 101 that somehow disappeared. so I'll go back and try to recreate it..
The secret to profit isn't in the job.. it's in the sales. Selling your customers a profitable job does not include the bid process.
I'm sorry I know that is what has been done for a long time but the real technique is to become a consultant rather than a bidder..
Can we all agree that selling for the lowest cost is a sure road to ruin? once you've eleminated second grade math how do you get the customer to understand that you are treating him/her fairly?
What magic words work?
The answer is something you see every day.. We'll match anyones (advertized) price..
I do it in my selling all of the time.. I honestly will match any one of my competitors on an apple for apple deal..
I usually will bring out a contract and ask to see my competitors bid.. I then carefully copy it down as exactly as I can.. sign it and offer it to my customers to sign..
They won't because I haven't sold them anything.. They don't know why they should buy one brand over another.. several of you have made that same point..
(cool your jets here,... I'm not suggesting that you actually build a cheap house) what I'm suggesting is that the first thing a shopper wants to get is an idea that they are being treated fairly.. Nobody wants to buy the cheapest anything. if they did they'd sell a lot more Pinto's and Yugo's then they did.. but the only thing that everyone knows for certain is second grade math.. this is cheaper than that so it must be a better deal, let's check it out..
Now is your chance to sell!
Now you can tell your quality story and in the meantime carefully get them to consider things other than price..
Once you have them listening to you about quality or features etc. you are a consultant not a salesman and you become their friend rather than someone to beat down to the last nickle. Suddenly they see the value of treating you fairly. they know it's in their interest too.
Untill you cross over from the bidder to the consultant you are just a number to be reduced to it's smalest acceptable level..
Frenchy,
I grant the fact that sales are an important element. And I don't dispute the fact that most people want to be treated fairly. However there is a certain element that always falls back to price alone. And like it or not the target is constantly moving.
I do a lot of bathrooms. It is easy for me to ball park a price. But usually when I do I later find that instead of working with me on reducing the price they simply take out a few items and call someone else. One guy did this 3 times. Contractor #3 got the job based on the fact he got the "real" specs.
Another issue is the fact I would not always match my competitors price. Some guys do bid simply to keep working. And some guys bid low because they have almost no overhead (so they think). At my level there is always a couple of guys that got laid off and are starting on there own. No amount of salesmanship covers a 20% cheaper price in some customers mind.
All that being said let me say this. Nothing you have said here hasn't been said or written in the half dozen or so books I have read on sales. The bottom line is what was stated above that you seem to have heard but would apperantly rather not acknowledge. Sales is a have to for some of us. Not something we want to do, something we have to do. Similar to working on a fork lift. If you wanted to do it you would be doing it everyday but instead you do it as the need arises. So while you will chatter on and on about the oppurtunities I am missing and the great things I can do if I would just love sales as much as you do I will go back to reading posts that get to the point and that I find more relaxing to read because of it. DanT
Your post is exactly why then art of selling needs to be learned.. If a customer goes to another contractor and reduces your price by removing a few items then plain and simple you did not sell them.. second grade math is here to stay,, there will always be someone who wants too much for too little, the trick is to easily dispose of them before you spend a lot of time working up a quote..
Do it in a way that should they come to their senses you haven't burnt any bridges..
The technique is simple. Listen very carefully and wait untill they ask for a price.. (ya gotta wait because the first person to mention money always loses) then explain that competition is fierce and you are willing to do the job right now for their lowest price quote..
(remember up to this time you've been listening and maybe asking relavent questions but listen don't talk.. don't try to sell)
Nobody and I mean nobody will accept, if you get the one in ten thousand willing to sign put a cavot that they can't live with.. I'll put you right in line and get to yours as soon as I finish the other 23 that I have to do.. Is the third week in July of next year good for you?
Don't worry, they will back track badly. begging you to sell..
Now you go to work.. remember the goal is a signed contract before you leave.. Don't pressure them, there are many techniques that will allow them no choice but to sign on your terms.. but you need to start the sale out where you know what their choices are and how to deal with those choices..
Never and I mean never leave an unsigned quote with a customer.. cardinal rule.. there are too many ways to deal with the, let me sleep on it approach for example. (I used to kid them,... "well you could sleep on it but it will get all smudged and wrinkled", why don't you discuss it and I'll check back with you tomorrow, is two o'clock good for you?
You deal with the issue of "the banker' the lawyer, cousin Fred.... up front..
Simple question.. impossible to avoid. ask them, "who besides yourself needs to get involved before you can sign a deal?" then repeat their answer back to them, so you're going to make the decision yourself?
It locks them into a position.. if they say they need to consult uncle Fred aunt tildy whoever, well good lets get them involved, should I reschedule when they can be here? too often they have questions of their own and I really should be here to answer them for cousin Mitilda.
Never, never, make a presentation untill everyone who needs to be there is there.. if you do I can almost promise you that someone you don't want looking at your bid will be soon looking at your bid..
Selling is an art and a technique. Learn the techniques and practice practice practice untill you perfect the art..
Frenchy,
Nice art. Listening. Good idea. Reading, another good idea. I said I can ball park a bathroom. Not quote it on demand. I don't have the ability nor the information with me to quote a bathroom remodel down to the number in front of a customer on the first visit. Guess I'll stick with what I am good at. Thanks. DanT
dan,
don't be afraid to rough draft everything.. bring out a blank quote form and start writing.. use it like a scratch pad,, (some customers freeze up when they first see contracts), you're wasting 45 cents or whatever to get them comfortable..
cabinets two doors white oak.,... $610.00
stool french provincial model abc 123 $930.45
tile, little cowboys blue and white with
pink and purple border $1753. 51
labor $1250
etc. etc..
have them intial each decision as you go along, reassure them they aren't buying anything, you just want to be certain that everything is exactly the way they want it, you hate surprises at least as much as they do.. every time they intial something you are getting closer to a signed deal..
by doing a rough draft and taking it with you they don't have anything to show your competitor but the terms and colors etc. are pretty well spelled out.. the next time you meet it's contract signing time..
remind me and I'll discuss ways to overcome last minute objections or resistance to close..
don't be afraid to rough draft everything.. in your own lousy handwritting write out the details of what they decide.. then when you are ready to leave have them intial the details,
reassure them that they aren't buying anything yet,, all you want is to get the details correct.. review each item look at them and ask if you've gotten it correct and have them put a check, intial, heck something/ anything to confirm what was discussed.. Tell them that you hate surprises at least as much as they do and you don't want to get the details of their bathroom mixed up..
read the post about shooting the customer in the foot
by hand writting everything out the next time you meet you are ready to close.. no excuses,... be ready to get the deal or lose the deal.. If you've set up the deal correctly it's your's,.. all you are doing is the paperwork..
Frenchy,
While I appreciate you approach read the post above this one. There is no way I will know what toilet they want and how much it will cost. Certainly since you just built a house you will know the vast number of toilets and colors available. And guess what, the home owner doesn't have a clue. They want a toilet. Ok, here is a picture of the one we use the most mam, no not that one its too square. And then you want me to quote a price on the spot? No catalog for this industry. And even if I create one I could never keep up on the vast amount of price changes from the many suppliers I use.
Look, I appreciate what you are trying to tell us, without telling us. But with the vast amount of choices and the fact few consumers know what they want I am content with my version of sales. Again. I do it because I have to, not because I want to. Your presentations are a moving target. Each time I bring up an issue you change the method of the method you just said was a great way to handle the situation. Thanks anyway. DanT
that's an excellant point, when you simply don't know (but you do have an idea of the price ranges involved) use the toilet allowance approach..
Well ma'am, did you want an inexpensive toilet around the hundred dollar range or were you thinking more upscale near the 300 to 500 dollar range? (remember, little decision to make the big decision..) Did you have a picture of the one you're thinking of? would you like me to bring several to our next meeting,, when would that be convienant for you?
Now continue like the sale will procede and close with an open allowance for the toilet (or whatever) again have them intial, sign, or make some kind of mark indicating which item they'd like.. reassure them they aren't buying anything just making sure everyone is on the same page
(the logic behind this is the same logic realestate agents use when they close on a house.. they get you to sign the insignificant paperwork first in order to eliminate the hand wringing and foot dragging when the actual contract appears.. by that time you are so used to signing that you almost don't bother to read the contract, {almost}) ;-)
OK Frenchy, I promise to shut up now.
As Ross Perot once said "I'm all ears"
The floor is yours............................
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
"I think you hit the nail on the head. Frenchy's approach is insulting. He talks as though none of us would sit down with a customer and have a frank discussion about costs for a project they are seriously considering."
NO!
IF THEY ARE SERIOUS!
He is talking about the step just before they become serious.
The question is HOW CAN THEY BECOME SERIOUS if they don't know if the kitchen remodel that they want to do is will cost them $5,000 ot $500,000?
That is the question. What frenching is asking for how to get some wild a$$ idea of the cost so that they can then figure out if they can afford it and become serious buyers that can get down to details and specifics.
And I can't see that much, if any of this will ever come from A BUIKDER, but there is a real need for it.
I did find a couple of online sources.
This one for new houses.
http://building-cost.net/
And this one for some selected remodeling.
http://www.improvenet.com/HomeOwner/ProjectTools/
But I think that there needs to be something a little more. Both of those are not the easiest to use in that trying to figure out what good, better, best is.
But look at this from Home depot.
http://designcenter.homedepot.com:8001/HomeDepotDS.asp?bIntro=1
I have not been through the whole thing, but played with the kitchen designer a little. Now this is really only a design tool (ie, looks), but you can select brands, styles, and countertop materials and actual patterns. Now in the applicances you can only select color, but there is no reason that you could not also select the appliances, etc. Then at the end it would could give something like "kitchesn with these materials typicall run in the range of $35,000 - $45,000 if there are no alternations to existing walls or openings".
That gives the HO the "homework" that they need to know if they can be come serious buyers or not.
Here is what I get of these threads whenever they come up.
HO - I want remodel my kitchen.
Builder - what is your budget.
HO - I don't know, what do kitches usually run then I can see if I can afford it.
Builder - They are all over the place, depends on the details. Stop bothering me until you have some more detials. Do you homework.
HO - Fine, how do I do my homework.
Builder - no response.
bill.. more BS !..
when i get an inquiry from a prospect.. the calculator starts running right away..
i ask a lot of questions.. but usually NEVER .. "what's your budget ?"
we'll talk about a lot of things.. such as how did they come to call me ?
that tells me a lot.. if they're honest..
as the conversation proceeds. i start thinking about the possibilities.. can we DO the job?
i mean if my schedule is 6 months out .. and these people want a start in 1 month.. the i'm going to be very helpful and set the hook for their NEXT project... but ( if they're honest ).. at the end of the conversation we both know i'm not going to do this job..but i might do the next one..
i will discuss price.... why ? because i'm going to qualify the customer.. if he's being unrealistic.. then i'm going to let them down easy... and tell them to keep looking.. because they WILL find someone in their price range . it just won't be me..
most of the old pros and the young turks here will do the same thing.... the customer is going to get qualified... one way or another.. that means a FIT for the company and the customer...
BUT.. here's what frenchy is leaving out..... it's a one -on-one activity... my computer is sifting thru 30 years of building and remodeling.. trying to come up with the number that is going to satify my company ... and the customer..
sometimes..(usually because there are two customers ... husband and wife ..) i get it wrong and it requires a site visit and a sitdown before i find out that there is no fit here....
but this is NOT something that can be done with a formula.. unless your business is set up on a formula basis..
there used to be a guy who posted here.. or it might have been one of Sonny's friends at Remodeling Online.. who priced just like auto repair shops do... all the parameters were in his book.. any salesman trained by him could take the book to a meeting.. price every component.. print out the specs and contract.. and leave with a deposit..
did the customer get best value for their money ?... who knows.. sure was a neat system though... i can only dream....
Mike Smith Rhode Island : Design / Build / Repair / Restore
Edited 12/6/2003 5:26:27 PM ET by Mike Smith
"when i get an inquiry from a prospect.. the calculator starts running right away.."
But you have to get the call first!
I am still talking about the step before that.
This is pure speculation, but I wonder how many people don't make the first step because they think that it is completely out their range, but don't really have any idea of the cost.
Again I talking about an out of the book price. And that is why I said that this kind of information will never come from a builder. Too afraid of being pinned down on the price.
But I suspect that someone like a HD/Lowes or NHAB/NARI will.
Again this is not a should I barrow $74,900 from the bank or $75,000. But rather I got a $5,000 bonus this year and I have saved up $10,000 and the house has $50,000 apprication in the last 3 years. Is it time to think about redoing the kitchen and/or bath question.
Well, there's plenty of places to get the type of info you're talking about. For example, Means has "Interior Home Improvement Costs" and Exterior Home Improvement Costs", which both give fairly detailed breakdowns of what different types of projects might cost. These types of sources can at least tell someone whether a new kitchen is $5,000 or $50,000, which seems to be the type of rough ballpark information trying to be gleamed from this post.
Bob
Bob
That is probably a very good book for this.
I did a look at it on Amzaon and based on the table of contents it looks like it could be very usefull for something like this. But I could not get the slightest idea of how the material is actually precented. Could the average "non-handy" person understand it?
And it is certainly not well known.
I even looked at Means web site and they have it hiden their.
I checked my library and they have it, BUT it is the 1994 addition <G>.
It's presented fairly well. As an example, for a kitchen remodel, it would have a drawing of the "typical" kitchen they are pricing, followed by an itemized list of what's included in the price- X LF of cabs, p-lam tops, vinyl floor, etc. The cost breakdown is usually followed by some add-ons or alternates, which give an idea of what else is possible.
The biggest problem, like with most cost books, is that you need to adjust for regional differences. Overall, though, the costs will get you into (or out of) reality.
Bob
Sounds sorta like the oposite of that web site that I posted. They are strong on localizing the cost do to the zip cost. But not as clear on what is covered.
Bob,
Does your maiden aunt in upstate New York know where to look to find such information? What about cousin Lyle in Duluth?
chances are they'd need to call a builder to find that source.
One techinque that is extremely effective is called the consulting type sale..
In it you are refered to as a consultant rather than someone who is trying to make a sale.. For it to work several things need to be present. First you need to be fluid in comparisons.. presenting options and letting the customer make the choice..
There is the marble top at $2200 or the granite top at $1800 but you can also have..
Take the prices out of there and the first question the customer will ask is the price.. (human nature)
second you need to establish your expertise..
Pretty difficult to do.. I'd make a terrible expert for a woman, I don't know the differance between mavue and puce or why it would matter to a woman.. Women aren't interested in air to air exchangers or 10 gauge wire, but rather colors and style items in a language that only barely relates to english.. Since at least half of the home involves a woman , I'd be pretty terrible..
Bill,
right on the nail!
The first step in marketing!
Mike,
very good, (I'm talking about your response to Bill Hartmann) with one problem..
How did you find those customers? Hopefully it was more than word of mouth. I hope you do some active marketing..
If I relied on word of mouth then a lot of people would never know the benefits of the forklifts I sell. If you are depend on word of mouth then you aren't advertizing and that breaks one of the cardinal rules of business..
Second, There are a lot of builders around here.. They have differant overhead costs and differant cost structures etc.. I'm willing to bet that just thiose who list in the phone book there's probably well over two hundred with several more hundred willing to do the work..
Why should I have you build my new house?
PS I doubt any of the builders I could interview would ever admit to building a bad house or a poor quality house, or taking longer than scheduled, or skimping on the details, further I'm certain they can all point with pride homes they've built that are noteworthy. Of couse they all have lists of referals..
Where do you come up with this imaginary conversation between a builder and a customer?
In 30 years I have never engaged in such a conversation, and I don't know a single contractor who would.
You guys are constructing an unlikely scenario, and then questioning us as to why we run our businesses that way.John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
"Where do you come up with this imaginary conversation between a builder and a customer?"
Right here is this forum.
That is the exactly the conversation that I see everytime this comes up.
Yes, it (hopefully) does not between a potentinal customer and contractor.
But what is really being discussed by me and I think frenchy is the step before that conversation.
SamT
Please carefully reread your statement to me.
No way to give specific numbers without having a specific plan..
In Most of my posts I repeat the same thing..
I don't want specific numbers!
estimate, guess, generalize
Remember this is Ma and Pa Kettle who need to have some idea before they would ever consider something as formal as a bid..
Let me try it another way..
I know I can't afford a Lear Jet.. I'd never go up to a Lear salesman and ask, but I know.
Conversely I might be able to afford a Cessna 150. Now I'll start to ask.. don't want to waste a lot of your time but if you could give me an idea... The reason is because i guess I can (heck maybe I can afford more or less but I guess I can)
But yes I am making a big point here (no,... it's not insulting) In the end I hope to provide you with something helpfull..
No way to give specific numbers without having a specific plan..
In Most of my posts I repeat the same thing..
I don't want specific numbers!
estimate, guess, generalize
I gave you numbers, and I wasn't being facetious. I did guess an average when Isaid $90/SF. There is no upper limit.
A while back in a net trade mag, i ran across a study/report on national building costs. Please don't ask for particulars as I read it during my really down phase of this medical thing I'm going thru and I still suffer from CRS. To top it all off I am using REVJET's computor and can't get to my references till I get another monitor for mine.
Any way this report said something like (these numbers are all just ballpark but they will be close enough for what you
needwant)Lowest ave national cost, some city = $45 SF
Median cost, nationwide = $90 SF
Highest ave cost nationwide, some city = $250 - 295 SF
Here is a $40 book that claims to have all your answers.
SamT
I wonder what appraiser and insurance companies use.
While appraisers main evaluation is by comparitive sales, they also do cross checks by replace cost.
And insurance companies need to figure the replacement cost of the home.
Thanks Sam,
I appreciated that.. I suspect that you're also willing to listen better to a customer than someone with an agenda that may not be so forthright about cost of building..
A loy of those who post here seem to want to "feel the purse" before giving the number.
and while that may be a way to maximise your return, it's far from the only way and it's too obvious to most people.. Most people would like a little romance with their,... er,.. emm,.. well you know,.. Blush.
If the average contractor is as subtle as the few I've seen I shouldn't wonder that they don't get all the deals that they can.. Most who answer on this board are as subtle as a sailor on liberty going up to an endless number of women and asking if they'd like to go to bed.. In boot camp I had buddies swear that approach would work.. (and it did too, except they were expected to leave the money on the dresser afterwards)
talking numbers isn't like signing contracts, untill everyone is in agreement on terms and conditions there shouldn't be any difficulty in a price that may be too low.. Complaints about,
"that's not what we discussed, pricewise" are really a plea to once again reassure the customer that they doing the right thing.. failure to respond properly to that question is like gropping a quick feel on the dance floor, sure to lead to embaressment..
So some avoid the issue by giving just one number and sticking to it.. Pretty bold approach, not everyone can or does appreciate such forcefullness with a contractor.. It sends all kinds of wrong signals, it tells future homeowners that the contractor intends to be in charge and if they don't like it to lump it..
Most homeowners would rather a contractor justify somethings to their satisfaction. This is a big scary step and they want to feel that their feelings are being considered as the procees works it's way out..
They may not say anything but later on over some issue of little real importance they can really become intractable. the problem isn't the issue under discusion but something else maybe something at the start of the deal..
Frenchy, I think you are not realizing where these guys are coming from. They speak from the perspective years of dealing with clients. Clients whose preperation ranges from a full set of plans and specs to the couple that say, in effect, "We want a fabulous dream."
It is unreasonable to think that you can know what a contractors situation is like. The general reputation of contractors is somewhere near that of used car salesmen, how many 'used forklift saleman' jokes have you heard. The buying public is afraid of contractors.
A FL purchaser is already educated about FLs. He has seen them in use, he has driven them, and he knows what he wants to do with it. He only has 3 true concerns, 1;the driving surface, 2; the load weight, and 3; the lift height. He doesn't care what the finish is, what the shape is, or what style the forks are. And most important, he doesn't distrust you before he calls you.
For a dollar in any convenience store he can buy a "Truck and Equipment Trader" magazine.
Competition: In the small town of Columbia, MO. there is over a full page(no ads) of Contractors, General and almost that many Remodelers. Umpteen pages of subs and specialty contractors.
When a builder first meets with a prospect, the most important thing he must overcome is a built in distrust. At the same time he has to decide if it is going to pay to spend several hours determining a ballpark figure of cost so that he and the prospects can talk realistically about what is possible. The prospects don't want to tell him their budget because they don't trust contractors.
It is advantageous for a builder to say no quickly in order to be certain when he says yes as each wrong 'yes' can cost hundreds, occasionally thousands, of dollars.
All of our friends here at BT can easily throw around ballparks #'s, but what about trust? If I call you up and asked what a FL costs and you tell me that they start new at $15,000. Based on that and my budget (not known to you) of $17,000 I come to your office to buy a new propane, all terrain, 10ton cap, hilift. At this time you will have to give me the true price and I am going to be pi$$ed 'cuz that is way over my (not known to you) $17000 budget and with that attitude there is no trust.
On the other hand, suppose you tell me that they typically cost $20,000 and I don't come in even though all I need is something to use on concrete to move stacks of empty pallets around. Ie, a pallet jack. I know, FL prospects have more sense than that, but this is analogous to a home builders client
The time it takes a builder to generate a list of what a prospect needs and wants is longer than it takes you from greeting to accepting the down payment. If you take 4 hours to lose a deal, what is your cost? If you earn $100K, your cost is $200, based on 50x40's. The same situation costs a builder much more as he also has OH and profit to lose.
As a FL salesman, your first priority is to determine the FL that fits the client. A builders first priority is to determine the prospects budget. If the FL is above the budget of the client, no big hoohoo, If the home is above the clients budget, the builder is out many hours of time (big bucks.)
SamT
c'mon.. sam.. don't be that way..
frenchy.. us poor turnips just fell off that nice truck.... won't you help us out ?
man.. if'n i wanted this i'da summoned RKMike Smith Rhode Island : Design / Build / Repair / Restore
Sam,
this is the fifth time I've tried to respond to your posts and for some reason they all seem to disappear..
Hopefully this won't
A salesman's first job is to listen, (and you are a salesman everytime you meet a client) listen carefully, to the words, the exact words and the way they are used.
It's not something that comes naturally, Doctors, lawyers and yes salesmen are trained to do it.. few others ever take the time to learn to listen..
Proof is that it took something like 130 posts to get a simple question answered..
I went to the city building inspector today and he informed me that the state average is 85 dollars a sq.ft.
You and others have a valid point.. you can't make an informed decision about signing a contract untill you have all of the details spelled out..
Yet no place did I ask for a signed contract. repeatedly i've been lectured about costs and how tough it is to make a living and how you can't afford to make a mistake..
True enough.. Yet you would be making a mistake to assume that everyone who asks the question needs a firm number..
Remember the situation? Ma and Pa Kettle? Looking at choices of where to spend the payraise? The harder you make it for them to select a new home/remodel the less likely that's the choice they will select.. The fewer who make that selection the less work there is and the more you and your competition will need to sharpen your pencil..
Sam if you read my post carefully you will note that nowhere did I say I wanted a firm quote or bid.. there is such a giant differance between the ballpark number and firm number that you can drive a semi thru it...
Part of the technique of selling is to listen..
listen to the customer and answer the question they ask, not the question you want to answer.. answer it the way they want it answered, not what will benefit you. amny professions are taught that technique Doctors, lawyers, and yes evan salesmen.
I understand your statement about contractors.. too many of them are deceptive.. no not all but enough to give the profession a bad name. Every profession has it's share of bad eggs and they ruin it for all of us.
let me debase you about buying equipment from truck and equipment trader. I've been doing this for over 12 years (rough terrain forklifts, over 20 years forklifts in general) In that time I see the " trader" sooner than most.. Any deals in it and we'd buy them.. I have a list of about 30 customers at any one time looking for a good used telescopic rough terrain forklift under $30,000.
When I worked at Catapiller we used to buy them once in a while when the demand was great.. Never made a dime of profit and usually lost our shirt.. We also used to go to auctions and buy any below market forklifts to support the brand's resale value.. same deal lost money every time!
My point is that when you aren't an expert you need to rely on an expert.. when he fails to give you direct answeres to simple questions it's time to move on..
try it.. ask me a direct question about something that I have knowledge of..
Frenchy, I'm sorry, I did not make myself clear about the Trader mag. I meant that it is a readily available and cheap reference to get ballparks from and meant to illustrate that there is no equivalent for home building.
You say, listen to the customer and answer the question they ask. What does a salesman do when the question is meaningless and has no answer?
You are a forklift expert, so let me ask you a really simple FL question.
how much does a forklift cost per ton of lifting capacity?
SamT
they start at about a thousand dollars and go up from there..
what are you going to lift and where and how high? (.. wait for answer) Do you need forward reach? (wait for answer..)
would you like me to make a sales presentation?
Notice I answered your question before I asked a question? that establishes the need for response people like what they percieve as fair give and take..
I gave an answer that asks more questions..
Now
I'd like to answer your first question, "what do you do when the customer asks a question that is meaningless and has no answer..
It really depends.. is the customer stalling? Is the customer unsure, confused? as I said selling is like a chess math you need to think several moves ahead of them or you will lose.. but that very thinking ahead is what can cause the customer to be confused.. Mentally thank him because that question is a very good point to review what has been discussed and agreed upon so far..
If the customer is stalling you have other issues to deal with..
Getting a signed contract in one visit the way you describe is great for a roof job, window replacement, siding job, maybe even a kitchen cabinet job where the cabinets are just being swapped out.
But for a major remodel, or new constuction, the "sale" must be made before every last detail is worked out. My spec sheet for a new home is usuually 15 to 25 pages. You can't possibly sit there and write a bunch of changes on a document like that.
A large developer with maybe 15 models to choose from, already has a spec sheet on each one. The salesman simply pulls the file and reviews with the customer. I don't have even one model. Everything I bid is a one-off.
First thing I need to do is to determine if the customer is willing to go through the process of building a custom home. We do talk ballpark pricing. Budget has to be discussed.But I have found that many people are intimidated by the prospect of the custom home, and prefer the ease of fewer decisions and instant pricing that the large developer has to offer.
I need to determine this early on, because it takes 40-100 hrs. to completely and accurately price out a custom home. And yes, I have invested that much time in a job and lost it. It's pretty disheartening, and it tends to make you very careful before invest much time in a customer.
John Svenson, Builder, Remodeler, NE Ohio (Formerly posted as JRS)
John,
Often I sell something after several visits but don't get signatures untill later after all the details are worked out.. A good deal is when a customer wants what you are selling as badly as you want to sell it.. (be it houses or forklifts)
The technique I spoke about is your perfect weapon, agree on terms and write those terms out by hand.. cross out a few items, what the heck you are just creating the rough draft.. If you need an exact detailed discription of what is going into the house, cabinets for example. have your rough draft made out with exact material and style etc.. evan a sample if you feel that should be included, then include that in the contract by appendix. cabinets per appendix F or some such thing..
use the contract as a rough draft and make certain that you are both in agreement on the details, have them intial the rough draft so that when you meet for the final time they see their intials and feel that they've already agreed on the details.
The reason to do this is two fold. first in the customer's mind they've settled on you as their contractor. Further shopping isn't needed.. Second you have a reasonable reason to not them them take your hard work and bring it to another contractor to be underbid.. after all it's just a rough draft isn't it? the next time you meet you'll have the finished draft with you and since you've already agreed on things there is no reason for them to stall..
One of my favorite closing techniques is the little decision close..
don't ask them to spend a fortune, ask them to spend a dollar.. Another words, have them decide on the hardware for the kitchen cabinets for example.. they are then debating should they use use brass or stainless not if you are gonna be their contractor.. carefully lay out their costs for each decision. polished brass is this much and stainless is that much, give them countless choices and lots of prices.. have several differant manufactors, do not be afraid to spend hours debating this with them..
The tremendous differance in costs will point out to them exactly what you're preaching to me. that not all homes are the same price evan if they are made from the same plans in the same neighborhood..
You did that by the little decision close..
Once they've decided on the hardware for the kitchen do you think they want to repeat that with every contractor? A hint here,
shoot them in the foot for insurance.. (salesman jargon speak for giving them a too low price)
Don't be afraid to lose a few bucks on kitchen hardware to sell a half million dollar home.. If the next contractor they talk to offers them similar hardware at a normal mark-up guess which contractor they are gonna come running back to? He may have given them a price for the whole house and they will come back to you with his contract..
Frenchy, I appreciate the time and effort that you are investing in trying to help us.
But.
You are teaching apples to orange growers on the assumption that since they are both fruit, they are similar enough that what you do is applicable to what we do.
You invest in forklifts and sell them for a profit.
We 'sell' confidence in our trustworthiness and ability. Then we invest 40 to 100 hours at $80/hr in developing a proposal for the single largest purchase our clients will ever make. Which they may or may not buy.
Our cost to produce the product cannot be known before the product is complete.
You must match 1 of 100? possible selections to a clients physical and financial needs.
We must match thousands of items from an uncountable selection of possibilities to our clients emotional, esthetical, physical and financial needs.
You get instant feedback. We have to take our clients to several showrooms to choose the tile before we can ask the sub about the cost of that part of our product. Assuming we have determined the size of the cabinets and floor spaces and walls that need tile, of course.
So when you told DanT
tile, little cowboys blue and white with
pink and purple border $1753. 51
Dan had to invest 60 hours of his and several of his subs hours into determining that $1753.51. Not to mention waiting 2 weeks for the clients to decide.
Frenchy you are a sales expert, please teach me about oranges. How do I sell someone the largest purchase of their life without telling them how much it's going to cost?
I already use ballpark SF costs to help me prequalify clients to see if there is a possible match between them and myself. I determine what ballpark to give them based on my evaluaton of their income level from looking at their cars and home.
Note that I am using, not to sell them, but to decide if I want to sell to them.
Thanks for taking all this time with us struggling home builders,
SamT
Sam,
selling is selling, be it fruit, forklifts, or houses.. there is a certain art and science to it.. I can't teach you the art, only time will do that, I can teach you the science.
hopefully you've invested in several books on the subject, but since you've commited 40 to 100 hours into this project isn't it reasonable for the clients to make a similar commitment? I mean that represents $8000 of your money! Before I were to spend that much of my money I'd be darn sure of a return on my investment..
When you don't know what something costs use the allowance appraoch,
Gee Ma'am I've never seen a light fixture like you are discribing but it sure sounds neat,, how much would you think we should list as an allowance for that? (scribble) would you intial it here please? (that's both a trial close and a little decision close)
An appraoch like that will do several things, first it will keep your bid out of others hands, second it is a trail close, third (and probably most important to you) it will signify their williness to proceed to a final close..
Now a question for you, do you use the firm quote method or estimate method of contract? I see both used with the estimate more often used in remodeling. How much over cost do you charge for change orders? (for the sake of discussion cost includes your standard markup and overhead)
* If I sold one remodeling job a week, I would soon be hopelessly behind schedule. Close rate doesn't mean much in my business. I focus on the sure bets, and tend to walk away from anything that seems like a hard sell. Svenny
*I don't have the ability nor the information with me to quote a bathroom remodel down to the number in front of a customer on the first visit. DanT
*But for a major remodel, or new constuction, the "sale" must be made before every last detail is worked out. Svenny
*Our cost to produce the product cannot be known before the product is complete. SamT
*One final point Mike,
Don't for a minute think that your income doesn't depend on selling the homes..
Untill you sell something, nothing happens..Frenchy
Frenchy,
stop,
take a deep breath,
forget what you are trying to do for us for a minute,
and listen to me.
We don't sell homes or construction projects or new kitchens.
We have to sell confidence in our trustworthiness and our ability.
We have to make sure that we sell that confidence to someone who can afford to pay for the construction project we are going to do in their name.
That's all we sell. Confidence.
SamT
It does seem silly to teach you and others how to sell, heck as you said you have all the work you can do,.
I remember when it wasn't always so and I believe in preperation..
I think it's reasonable to prepare for that time when you don't select jobs but actively seek jobs.
there is three real benefits to that approach..
First it will allow you to reach for clients/ jobs that offer a real reward (however you define that reward)
second it will allow you to test your limits as to what your full earning power really is.
third it will prepare you for the day when the contruction cycle turns down..
ps,
nothing in my selling appraoch should cause you to undermine a position of confidence,, instead it will allow you to effectively convey that to your clients.. As you are describing your techinque you fail to effectively convey that to me..
perhjaps like me you are not very fluid in writing and are much better in person,, perhaps your clients have bought so much from you that it's not important to convey the things most customers seek..
please don't think that because business is good at the moment that you don't have anything to learn.. and even if i can't share it with you, it is something that you will need in the future, (unless retirement is right around the corner inwhich case,
nevermind!
Frenchy
You have helped me more than I know how to express.
Not the way you intended maybe, But, at least now I have a much clearer idea of what it is exactly that I am selling.
And how can one be a good salesman if they don't understand what it is they are trying to sell?
Thank you for taking the time with me.
SamT
you're welcome, hopefully your future will be rosey!
Back to the main subject: ballpark pricing. I find two things. One is: If you put one in the ballpark and it turns out to be out of the ballpark you will be out of the game. Like when they decide on granite instead of laminate. But, two, is that there are plenty of ballpark pricing out there. Like, National Estimator. Which is where I start. And that is all it is. A ballpark. I agree with both points being presented here. When I first started in business the thing that helped the most, was my uncle, a contractor, giving me guidelines (ballparks, if you will) on all the pricing in the area. What I could get a job for. It helped me to not underbid. I don't tell customers those numbers. I meet with them and find out as close as I can what they want. Leave info for them and try to make it back in 24-48 hours to tell them how much they will have to invest. No complaint from that method.
Point being; if you want a ballpark, don't ask a contractor. That's obvious from this thread. Find it in a publication. But be careful, even they are varied.
Mike, it is just a sales tool to prequalify/educate potential clients. see suggested range of costs.
SamT
yes, i know , sam...but it took me a long time to figure out that most people , including architects, could not come up with a standard....
i know what our sf. costs are.. but they're useless and misleading when talking to prospective clients... most of whom have $100 / sf.. tatooed on their brainMike Smith Rhode Island : Design / Build / Repair / Restore
thought about this thread as I was going through my mail today.
got one of those coupon packages.
included one from a remodler, advertising additions from$48/sq ftbobl Volo, non valeo
Sam T
you might be a little high on that $500,000 per sq.ft. number. Even in NewYork I suspect that a 16 sq.ft. closet isn't gonna cost 8 million dollars.
However is there a way to guess how much house you can get for how much dollars? Remember we aren't talking signed contracts or bids or anything! we have Mr.and Mrs. Nice guy who just got a raise, promotion , bonus or won the lottery..
They can quickly find out what a new Porsche costs or a boat etc..
How much work are you gonna put him thru to ask him to consider building a house or adding on?
When I was a kid I lived in Bloomington. it's a bedroom community near the twin cities. I saw lots of families spend their money on boats and snowmobles and etc. when they really wanted a cabin by the lake. I suspect the reason they never got that cabin by the lake wasn't that they couldn't afford it but rather that they didn't know and fear of the unknown......
I don't know where "here" is but for now I'll assume that you are in a suburb someplace.
How do you know who the builder is? I've never seen a plaque in the front lawn that says built by John Smith in 1912 and his phone number is regent 5
(I'm sorry for the smart aleck crack but it points out the difficulty of that approach)
Now maybe if you live in a small rural area and everyone knows everyone else that may be how things are done.. (just hope a stranger never moves in and wants a house built)
I wonder how many times I need to repeat this phrase.
Budget, estimate,..... approximate
I think I finally get what you are talking about which to me is broad band . But based on your last few posts I understand a lot more . I still dont think its easy.
Let me put two things in the fire please.
The banker needs someone telling him what yur project will be worth at completion. [he may do it himself] There has to be a figgure HE can play with you are certainly right on. The customer should want to follow the same rules if the money is borrowed cause he could lose it. Any investor would have to know as well . I think everyone should know , but they dont .
The MLS system is a data base of property that has sold to base the worth opinion on . You need to know from the start what your property will be worth at the end result before you can purchase it if you are going to sink money into it.
You are also talking about fixing pricing and Im quite lost on that one unless you seek professional bids. You think everyone in town may have to be called . Its happened before , but they wont be as nice once they find out they were in such a big pot in the bidding. You are right in thinking that there needs to be price fixing if you will , but its not out there. Its really not. What I told Jerrald is my best experience.
To confuse the issue a little more, I set out to find out what the average house was bringing so I should know what to pay or I should know what to build for . Magical question. The homes came in at such an unlevel pricing that it simply confused me until I went and looked . The answer then came to me as I saw mainly location and quality. If I knew what you wanted to know , it would be a tool I could use . I simply have to take each single property and work it to find its value. I think thats where you are headed with bids. There is too much difference in what different people will work for, that it makes definate pricing impossible to me.
Let us consider putting your sales carreer on a budget. How would you know what the budget would be with out knowing what the commision and sales would be ? I think a budget is useless in selling. My own opinion .
You brought up a good discussion .
Tim Mooney
Tim,
the bankers aren't in it at this stage.. nor are we trying to justify the expense so we don't need MLS or a realitor.
I'm Mr. nice guy who just got a bonus or raise.. now what are my options?
In a few minutes I can go on line and find out what that Porsche costs, I can check prices quickly and determine if it's possible to go around the world or spend a month in Paris..
But homes? How do you do that in the priliminary stages? Long before you get a banker or even seek bids, how do you get an idea of what things cost?
You are dead right it isn't easy
and that's the problem..
Why should homes require such a leap of faith?
I'm sorry, we still aren't communicating too well. I don't understand what you mean by price fixing?
I hope that you don't think that I mean a bunch of contractors get together every saturday morning and discuss how much to charge to do things..
Nothing could possibly be further from the truth..
By the way, I know of one developer who solictes bids from as many as 30 framers for each phase of his development. (he could also request as many bidders from each of the trades as well but I don't know that) He's done it for the past ten years that I know of perhaps longer. I can count on selling a couple of new forklifts to new start out crews a year just on his developments alone..
Finally
I set out a budget every year without knowing what the sales will be nor knowing what commision I'll make.. I've done it for the past thirty plus years.. It's a regular part of life.. (that or you quickly learn about bankruptcy..)
Timing is also important. There are years when material prices are fairly stable and then there are times when drywall tripples in cost in a few months time, or like now when plywood and osb does the same thing.
Frenchy "Second I'm trying to eliminate the variables.." I'm not exactly sure just what you mean by that but by just the other week a guy started a discussion here called Numbers in the database. I recognized him as that guy I got in the debate with back on those old Remodeling Online forums that I mentioned in my post above. When he mentioned:
I read that and recognized he was probably still trying to estimate framing by the SF and estimating that way can't possibly predict and account for the possible variations that can occur. I feel pretty confident in saying that I think that's probably still his problem. He always talked about a SF formula that he would adjust to accommodate variations such as a dormer or maybe a bump out. But that would never take into account enough information to account for things like more Linear footage of interior walls for the same SF footprint. In my opinion he still isn't seeing the forest through the tree yet.
You can't account for variability in a SF estimate by adding percentages or even specified dollar amounts (although the later is better than the former) because it never accounts for the underlying potential variability. The only way you can account for variation is to actually really estimate for it. I was just talking with Bob Kavacs earlier today and I was saying that in our company we can use a figure like: .842 labor hours to "Install solid or architectural pre-hung interior door" (no hardware or trim) and if we look at our stats and our averages will pretty much stick to that average figure. When they don't it usually because of something like the doors were stored in the second story of a garage 100 yards across a field covered with snow so it took an additional 20 minutes (.333) to hang each door. Well under circumstances like that you plan and estimate for that condition separately from the number for hanging the door and the variation accounted for. That just good unit cost estimating technique.
For example in the sample Crown Installation Estimate that I did for Cutawooda just over a year ago he mentioned how the crown in one location was being installed on a ceiling 25' high. I entered the standard rate for installing crown under typical conditions and then added another line to budget for the variation of it being 25 feet up a ladder in that one location.
re:"What we are trying to do is establish a starting point so someone can make the decision to add a room or buy a Porsche, go on vaction etc..Think of it this way.. you don't decide to install a GPS system in your Porsche untill first you decide to buy a Porsche." The baseline estimate (buying a Porsche) was the quote for a standard crown installation and the adjustment for the crown that was 25' up (the GPS system) is the line item I added.
I think what you might be saying or getting at is that we need to be able to talk about the baseline price (the Porsche) before we can have any kind of worthwhile discussions with our clients about the options and we need to be able to get that baseline price established rather quickly am I correct?
If that is what you saying (and I'm not exactly sure you and I are talking about the same thing yet) I think you are entirely correct in that regard but unfortunately figuring out a baseline Price by a SF method just because it fast doesn't really do us any good because it's potentially so inaccurate. What we need to do is find ways the speed up the Unit Cost and Systems Cost estimating methodology.
Just before Thanksgiving I said just that over on JLC. I believe in my company a lot of the things we've done to streamline the estimating process have done just that for us and I like to believe we can do an estimate in a tenth of the time that most other companies produce their estimates and were more accurate too.
"Fear of the unknown causes a lot of people to avoid building.." Absolutely and one of the other advantages to our being able to produce these detailed estimates so fast is that it displays our confidence and organization to our potential clients and shows them that we have made a clear and visible effort to show them we have everything covered. We usally don't attach the prices to the individual line items since that could possibly encourage nit picking over individual prices but we will show them the costs of groups of items so that they can make determinations between options such as solid oak raised panel cabinet doors or oak cabinet doors with glass inserts etc. You give them the information that they need to make informed decisions that they feel they can trust you on.
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You're correct.. it's not accurite and it doesn't matter.. we aren't signing a contract here, rather looking for a quick and dirty way to establish if something is realistic..
If the addition is gonna cost me the price of two Porsches (or in my case Jaguars since I love Jaguars) and my budget is Pinto at best wouldn't I and all the contractors I called be better off knowing that up front?
On the other hand if my perception based on all of the horror stories I've heard at cocktail parties were true then many of my neighbors aren't doing their houses out of fear.. Fear that the process will lead to out of control expenses. fear that work will begin and then once started they are totally at the mercy of their contractor.. someone they may have little or no experiance with before this process began..
As Steve put it, I'd love to remodel the house or even tear it down and start fresh, however I don't know anybody who's done it without it costing them dramatically more than they planned.. (the word dramatically is mine, he used a word that starts with an "F")
8usa bucks a foot wow!!! here in the ever growing city of Toronto in Canada we sub-contracting framers are fetching around $4 a foot ,while the forklift is supplied along with another 13% forwarded to the union to cover our benifits.It makes for a good life and at this rate you neednt another household income.Or you could have the wife out working and that would free up some lap dance money for the crew eh.
you threw in the eh as an authnticator , din't ya ?...
just to see if we were paying attention ?Mike Smith Rhode Island : Design / Build / Repair / Restore