Free Estimates: when you don’t give your work away

We recently received the following note:

Hi, Michael. We’ve written each other a few times over the past year and I wanted to run something by you. I’m not asking for any kind of free consulting, I was just curious as to what you think of my response to a potential customer who was not willing to pay for a design/estimate.

I met with the couple for about an hour the other day and we went over what they wanted done (increase the size of their 2nd floor master bedroom, add a master bath and a large walk-in closet). I asked what their budget was and they really did not have one…and they had no idea what the addition would cost (of course they didn’t!!!) and they had just started to receive quotes. Eventually they came up with a very “loose” budget of $75,000. With that number I explained to them that we could probably convert the home from a 4 bedroom to a 3 bedroom by converting two of the smaller bedrooms into one large master bedroom/suite. They did not want to go that route. They wanted to keep it a four bedroom house. I agreed that would be a better idea.

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Without going into detail, the project requires quite a bit more than simply ‘bumping’ out a room and adding a bath and closet…there have been other additions on the house that make this a very challenging project. I’m not a big fan of throwing out “rough estimates” or “ball park” estimates as they more often than not are either way too high or way too low. In either case nothing good comes out of ball parking in my experience. . . . .

I am sending you this for two reasons:

1) Your books, advice, and website have helped me become a better builder (business-wise) and I wanted to display to you my approach to this type of situation (one in which you have covered heavily in your literature).

2) Maybe you can use it as an example on your site (either a good one in that I am handling the situation well or one in that I should take a different approach).

The contractor presented a design agreement to his potential client, with a $3,000 fee to design the job, 1/2 of the fee would be credited back when a contract was signed for the final job. The potential client later sent him this email.

Just wanted to give you a heads up. Julie and I had a chance to think things over and we really hadn’t planned on investing $3000 in drawings. I’m sure they are helpful and make it easier to price the job but I don’t see any real value in us paying for drawings. We had hoped that you’d be able to provide us with an estimate that would allow us to make a decision, that along with references and other criteria. I’m typically not interested in paying someone to provide me with an estimate. This is not a criticism of your approach, the sample drawings that you sent look great and under the right circumstances probably provide a great value add. Its just a general philosophy of mine.

It was great meeting and please feel free to stop by anytime for a beer. Hope to see you in neighborhood.

The contractor responded as follows:

I understand how you feel. I remember the feeling I got when an architect I met was charging six figures for plans that I could have done more accurately for a fraction of his price. The problem is, an accurate price can not be given for a project without plans and specifications. I can’t argue with your philosophy Jim, but please consider that in the course of your project, ‘drawings’ will eventually have to be done. If a contractor is willing to do them for free, beware (of hidden costs and/or shoddy work).

I have learned that an estimate is rarely more than a very rough approximation without having the design, precise measurements and material specs on paper. I much prefer to give a true price quotation based on facts and am not one to work on a time-materials basis with only a rough estimate and the hopes that the job does not exceed the budget. My time and skills are not free nor should anyone’s (worth hiring) be. I also realize that you have not asked me to do anything for free . . . you are simply in the process of finding out roughly what a project of this scope will cost. I respect that and completely understand.

What you will get from me is an honest price for your job, a contractor dedicated to your project and your happiness, with the skills and experience to meet or exceed your expectations.

Based solely on our conversation and my experience with similar projects, my estimate for your job is between $100,000 and $175,000. With that range in mind, I can build you a very spacious addition and add much value to your home. For considerably less money we could convert your home into a three bedroom (converting two of them into one large one) but I don’t think that is a route you and Julie want to take.

I very much enjoyed meeting you and would be more than happy to discuss your project with you further. Would you like to meet again to continue talking about the project?

And, I may stop by for a coffee…I don’t drink but thank you for the offer!

Suffice is to say that this contractor handled the situation almost 100% correctly. He saved himself a ton of time and work, because the homeowner was not serious about getting a job built. The homeowner was shopping, not buying. The odds of the contractor getting the job after investing time and effort in creating plans for the homeowner were slim to none – the odds of the homeowner looking for someone else to build those same plans for a cheaper price are great.

Sometimes you just have to bite the bullet and say “no”. And spend your time with clients who are interested in getting a job built, not just shopping.