Why do contractors only send the estimate 10%-25% of the time?

22 Replies

BP Community,

I live in the Denver Metro city of Centennial, Colorado.  It boggles my mind how many contractors come to do a site walkthrough, promise to provide an estimate within a few business days, and never send it! 

We had several home projects that we requested 3 different company estimates: hardwood floor refinishing, baseboard installation, enclosing a porch to insulate with electric to add square footage to house and have sunroom, sprinkler system, outside deck/porch installation, paving of driveway, move a fence, possible foundation repair, structural engineers to clear no structural damage, inside painting companies, and attic insulation among others. 

90% of all the estimates were never sent at all, or required 3+ calls to estimator and/or manager to have estimate finally sent. These were requests to fix up the house we live in that will be a rental soon. Maybe my project is not big enough, maybe they don't want to do the job for whatever reason, but why did they waste their time in the first place?!?

Is this your experience as well? Obviously once you find the right company you hold onto them and pay them well, but I am curious to hear others experiences of lack of response and why this is happening within the industry.

Bryan H.

I agree, it is always a frustration.  The unfortunate reality is that most tradesman are not businessmen and are very poor managers (of their own time, or anyone else's).  Once you establish relationships with reliable contractors and thy see that you follow through when they do, and you pay them on time, you become a higher priority.  The best way to mitigate the frustration I the meantime is to focus on guys that are direct referrals from people that have used them consistently over a decent amount of time.

I don't really know any general contractors in Denver, but I have plenty of good relationships in the structural world (engineers or contractors) if you need any recommendations.

Good luck with your project!

Aaron Moore, Kenney & Company | [email protected] | 719‑287‑8881 | http://www.buyingcoloradohomes.com | CO Agent # FA100045037

Hi Brian

I am a contractor in Southern Maine and here is one take on the situation from my experiences here in Maine. I tend to work for customers who I know well or who have been referred to me by these customers. When I show up for an estimate with a new client one of the first things I ask is are they putting the job out to bid to other contractors. Then I now that 90% of the time they are going to go with the cheapest guy, and usually that guy is either a hack or pays his guys dirt. I think its important to take the time to find and work with a contractor and subs you can trust who do quality work and take pride in their business and themselves. Sometimes when working with new clients I charge for the estimate then if I get the job I take that money of the bill. The point is everyone's time is valuable. Communicate your expectations and learn how to feel these guys out. Your first impression is usually right. Then when you find the right fit it will feel like a  partnership.

Harry

There could be a lot of things at play.

1. Not all contractors are good at preparing estimates, doing paperwork, using computers to create documents, etc. I would say from my experience as a contractor that most residential contractors are not, but some are. Find those.

2. Preparing an estimate can be difficult for different reasons. The scope of work has to be well defined. They may feel like they have to undercut their rates/pricing because you are an investor, and they view it as not worth the effort. They may be busy with other work, and don't have any staff to estimate projects.

3. The contractor doesn't have a good base of knowledge about their costs to work from and is intimidated by preparing a competitive bid. You would think they might be able to at least shoot from the hip price, right?

4. They are not very experienced at all of the above, and maybe even doing what you want them to, even if they said they are. I would ask for at least a reference or two. Some contractors are just starting out, and that's OK, they could be very experienced at what they do.

If you are doing work on your properties a lot, maybe you could develop a scope of work form that you give to contractors. That would help any contactor, even those who are on top of their game.

Let me know if there is anything I can help you with.

Thanks Aaron! I love how you said "...referrals from people that have used them consistently over a decent amount of time." We learned the same thing the hard way. We used some referrals early on and had poor experiences with the work. Afterword they mentioned they only used them once which changed our referral criteria to multiple experiences with craftsman.

I wonder how contractors respond in states and/or cities that have not fully rebounded as strong as Denver. North Carolina, Florida, Ohio, Indianapolis, Phoenix, and Las Vegas seem like they are recovering but not sure they have the same demand for construction with the booming population in Colorado. 

Anyone else want to weigh in on the my poll? 

Great insight Robert and Harry. Thank you

Originally posted by @Bryan H. :

BP Community,

I live in the Denver Metro city of Centennial, Colorado.  It boggles my mind how many contractors come to do a site walkthrough, promise to provide an estimate within a few business days, and never send it! 

We had several home projects that we requested 3 different company estimates: hardwood floor refinishing, baseboard installation, enclosing a porch to insulate with electric to add square footage to house and have sunroom, sprinkler system, outside deck/porch installation, paving of driveway, move a fence, possible foundation repair, structural engineers to clear no structural damage, inside painting companies, and attic insulation among others. 

90% of all the estimates were never sent at all, or required 3+ calls to estimator and/or manager to have estimate finally sent. These were requests to fix up the house we live in that will be a rental soon. Maybe my project is not big enough, maybe they don't want to do the job for whatever reason, but why did they waste their time in the first place?!?

Is this your experience as well? Obviously once you find the right company you hold onto them and pay them well, but I am curious to hear others experiences of lack of response and why this is happening within the industry.

Bryan H.

 Bryan - this answer is simple!!!

people are freakin LAZY!!!!

why do investors only send 1 or 2 direct mail pieces - they're LAZY!!! - it takes 6 - 7 touches to normally get a deal...

the money is in the follow up!!!

Michael Rae

Originally posted by @Bryan H. :

...

I wonder how contractors respond in states and/or cities that have not fully rebounded as strong as Denver. North Carolina, Florida, Ohio, Indianapolis, Phoenix, and Las Vegas seem like they are recovering but not sure they have the same demand for construction with the booming population in Colorado. 

Anyone else want to weigh in on the my poll? 

Wake county, NC (Raleigh/Cary MSA) new construction permit values for 2013 ($1.3B) and 2014 ($1.27B) are roughly double the building bottom of 2008 ($663M), but a far cry from 2006 ($2.4B) and 2007 ($2.39B). On average, I'd consider contractor 'responsiveness' less favorable than a few years ago.

From reading others posts, listening to the BP podcast and random conversations with other investors/homeowners, I don't think this problem is unique to you or I!  People just get flaky.  I think it's a lack of organization and time management, possibly.  If someone could run a contracting company that actually followed through consistently, I think they'd have a gold mine.  Good luck to you!

Kimberly Gillock, lightbulbs, LLC | 303.886.4391

@Bryan H.  

I always imagined it was lousy time management.  I generally have work for one contractor or another just about any time and I have to pull teeth just to get them to show up.

My plumber just got too big, or is sick of working on my pipe maze, and no longer takes my calls.  I have another electrician that did great work for me twice that flaked out on a job and hasn't communicated since.  No clue what goes on in their heads.

My roofer barely knows how to use his cell phone, yet he calls me every month to see how the new roof is and to see if there is anything I'd like to send his way.

Odd basket of people in the contracting world.

In the business world, you have to be just as wary of "cold call" buyers, as you are of cold call sellers.

Think of it being akin to screening tenants.

@Bryan H.  I completely understand your lack of bids. 

1) There is lots of work so contractors are picking the low hanging fruit. Easy work at high rates.

2) The contractors, like most people, are not good at phone screening which means they don't qualify you over the phone.

3) Most don't want to compete for your work. They want sole source at the price they name after the work is done. This is low risk and high profit for them.

The work you have to do is find those people who are willing to compete and still perform. Very few fall in this category. After contractor's have been around a while and perform at reasonable prices they get all the work they want from referrals. 

I've had the best success finding folks just starting out on their own who have a good work ethic and produce quality but haven't yet developed that referral network. They are sometimes willing to work a bit cheaper. I will take these folks even if they charge a bit more than next guy as long as they are still within reason.

Keep hunting.

Medium rre 1to1 small sizeBill S., Reliant Real Estate, Inc. | 720 207‑8190

Whats really funny is that the ones that are responsive are typically always busy. The ones that aren't are always struggling to find work. You'd think it would be the other way around.

The busy ones should be the ones not to return a call. And the ones needing work would be all over any opportunity. Unfortunately, many contractors just don't understand what it takes to be successful. 

But I would add that its also got to be a tough deal to have to constantly bid projects and not get the job.  

One thing I do now that seems to help is to stop getting estimates from multiple contractors. I basically tell the contractor he's got the job as long as his numbers come in. When I review the estimate, I go through the items and if there's a price I don't like on something, I'll tell him he either needs to hit a certain number or I need to have someone else do it. Almost every time, we can come to an agreement that works for both of us. 

With a new guy I have now, I don't even bother going over the line items. I just look at his total bill and as long as that comes in or under my budget - which it usually does - I'm happy.

Sometimes, its simply about finding the right guy. Some guys have better cost models and understand that they are contractors not builders and their pricing needs to reflect that. They also have cheaper labor for the less skilled stuff (i.e. demo, etc). Contractors shouldn't be charging plumbers prices.  I'm not paying $80 an hour to frame a wall or to demo a kitchen.

Find the ones that understand that and can charge accordingly and there's no real need to bid it out. Tell the contractor the job is his if his numbers come in ok and you'll be good to go. Better yet, give him your budget minus 10% as a starting point and tell him thats the number he needs to come in at or better.  If he does, the job is his, if not, you'll need to know why.  And if you need to go up the 10% or a little more, then you have that wiggle room.

But I typically just let the contractor put in a number and if I think its fair, I'll take it. I've had some that just don't work with my budgets though and have to move on. But I always seem to be able to get an estimate out of them this way.

@Bryan H.  It is normal for busy contractors not to give quotes. I found out that its usually their office structure, either they don't have one or its a one man show with 1 or 2 in the office just filing paperwork. Some of my clients are the cost plus system, i charge them all in package at 25-30/hour, what i keep is the difference, i throw in materials handling if they pay the higher rate/hour or hire more than 15 workers for 20 or more days.

But if you go for GC instead of doing the sourcing yourself, it would make more sense because you have too many trades under one roof. a little expensive that way but keeps the headaches away.

Contractors don't return estimates for a few reasons - I'll list them in their order of likelihood

1) You're cheap and they figured it out from talking to you. Was most of your conversation circling back to price all the time? Real estate investors are notoriously considered cheap, always looking to squeeze extra work for nothing. People like Armondo Montelongo make good tv, but who the hell in their right mind would work with him in real life?

2) They didn't like you. This happens way more often than you'd imagine. Over- bearing, dreamer, micro manager, incompetent, too demanding, A-hole etc...

Those two account for 90% of the reasons that a contractor didn't follow through with you after meeting you. When you just can't figure it out, it's usually one of those.  There is something called a PITA charge, (pain in the ***), if you're a lot of number 1 the contractor can sometimes see his way to work for you if he can get a big enough PITA charge, however it doesn't work the other way around, no amount of nice guy will ever overcome lack of budget.

3) Scope of work made them uncomfortable, unqualified. Sometimes, especially with investors you're not usually dealing with the most experienced pros, as most of them won't work with investors anyways, so your pool of available contractors contains many on the less experienced end of the spectrum. Sometimes they simply get cold feet about some of the work and move onto other bids that they are more comfortable with. Some of them can't pull permits in your area, once they find out you want a permit they can't do the job so they smile, listen to you, but have no intention of following thru.

4) Number 4 is the big catch all but makes up the smallest percentage of why they blew you off. They lost your contact information. It happens, again as investors you're not dealing with the cream of the crop in the first place. Something changes in their schedule, such as a big job gets awarded to them so they blow off any outstanding estimates they were processing, they lose a key employee so they don't have the man power to pursue the new projects they have looked at so they blow them off. They have over committed, they simply think they will get to your estimate, but it gets buried in the pile and never gets looked at until they figure it's too late and then they just toss it figuring it's too late.

There are a few other reasons, but almost always it's number 1 and number 2 almost every time.


Originally posted by @Bryan H. :

Obviously once you find the right company you hold onto them and pay them well

In reality this obviously really isn't the case.  Money talks and if this was really the case there wouldn't always be posts about this subject.

One of the main reasons here in Denver is that there is too much work for them right now. They are not scrambling to find work; they are swimming in it. So they cherry pick the jobs they want. 

Have you looked at homeadvisor or yelp yet for contractors?

Happens here all the time and it has always puzzled me, too. Contractors who are supposedly in business who won't return phone calls or who spend time looking over your job and from whom you never hear again.

I disagree with the notion that people who bid out a job are simply cheapskates willing to sacrifice quality for price. People usually want both, and contractors unwilling to compete on price as well as quality are sometimes astonished and indignant to find themselves out of work in tight markets. They usually come around quickly enough if they want to survive.

As far as referrals, I've had some pretty good luck using HomeAdvisor and Angie's List. Both of these do some prescreening of their contractors and both have detailed rating systems where people can describe what they liked or disliked about their experiences. HomeAdvisor is free to use. You type in your requirements and get three or so referrals, all rated. The referrals also get your contact information, and I think many of them are very actively looking for your business, so I have had cases where I have typed in my requirements and gotten a phone call back within a few seconds. They also have customer service people who will follow up with you to make sure you've found someone to your satisfaction. If not, they will help you find someone else. Nice service. Angie's List is another good one. It does cost a little to join, but if you get on their mailing list, you'll frequently get offers for cut-rate subscriptions. I think my Premium membership (the highest one) wound up costing me about $4.00 for a year. It's also good because if things go wrong, you have recourse through them (rather than just the contractor) to help resolve the issue(s).

I've had my own business for many years and will offer this observation. To have a really successful business, you don't have to be exceptionally good. Simply show up and do what you said you were going to do. To the extent you can exceed that low threshold, you will be considered a superstar. The reason is that so many contractors so frequently overpromise and underdeliver. So, nothing fancy, just do what you said = fame and glory. 

MA Agent # 104967

Great insight everyone

Originally posted by @Mike F. :

Contractors don't return estimates for a few reasons - I'll list them in their order of likelihood

1) You're cheap and they figured it out from talking to you. Was most of your conversation circling back to price all the time? Real estate investors are notoriously considered cheap, always looking to squeeze extra work for nothing. People like Armondo Montelongo make good tv, but who the hell in their right mind would work with him in real life?

2) They didn't like you. This happens way more often than you'd imagine. Over- bearing, dreamer, micro manager, incompetent, too demanding, A-hole etc...

Those two account for 90% of the reasons that a contractor didn't follow through with you after meeting you. When you just can't figure it out, it's usually one of those.  There is something called a PITA charge, (pain in the ***), if you're a lot of number 1 the contractor can sometimes see his way to work for you if he can get a big enough PITA charge, however it doesn't work the other way around, no amount of nice guy will ever overcome lack of budget.

3) Scope of work made them uncomfortable, unqualified. Sometimes, especially with investors you're not usually dealing with the most experienced pros, as most of them won't work with investors anyways, so your pool of available contractors contains many on the less experienced end of the spectrum. Sometimes they simply get cold feet about some of the work and move onto other bids that they are more comfortable with. Some of them can't pull permits in your area, once they find out you want a permit they can't do the job so they smile, listen to you, but have no intention of following thru.

4) Number 4 is the big catch all but makes up the smallest percentage of why they blew you off. They lost your contact information. It happens, again as investors you're not dealing with the cream of the crop in the first place. Something changes in their schedule, such as a big job gets awarded to them so they blow off any outstanding estimates they were processing, they lose a key employee so they don't have the man power to pursue the new projects they have looked at so they blow them off. They have over committed, they simply think they will get to your estimate, but it gets buried in the pile and never gets looked at until they figure it's too late and then they just toss it figuring it's too late.

There are a few other reasons, but almost always it's number 1 and number 2 almost every time.


Originally posted by @Bryan H. :

Obviously once you find the right company you hold onto them and pay them well

In reality this obviously really isn't the case.  Money talks and if this was really the case there wouldn't always be posts about this subject.

You nailed it, in your own way....

#1.I always qualify the lead and if I fire the potential client at the initial meet, I have the courtesy to let them know it doesn't work for me.

#2 If there is friction with the client during the bid process, what can be expected once the project begins? As Donald T. Would say, "Your fired!"

#3 My favorite. Reduces the pool for us

#4 LOL

If you mentioned that this was going to be a rental and that you were an investor , I can see why a lot of contractors didnt get you an estimate . Mainly for the reasons that were mentioned in previous posts .  I do quite a bit of work ,  90% of what we do is for repeat customers .  We cant do investor work , we are usually 4 to 6 months out , investors think their job should priority 1 . The low hanging fruit taste much sweeter . 

I actually prefer working with investors however I am quick to cut ties with those who insist on negotiating every line item of my bid. Work is plentiful and it is my advantage to be direct and organized. With today's technology I think it is ridiculous not to be.

That said, screening sales calls is an important skill. I have noticed an increasing inventory of rehabs on the market that offer little in the way of quality repairs made. I personally prefer not to take on these unflattering projects as I think they "dumb down" my skilled tradesmen & women. Information enlightening my staff on potential red flags usually can be determined in a phone interview with the investor and then discussed prior to engaging in the bid process saving both parties a wasted day. 

Most quality general contractors I know aren't interested in projects under $15k unless we are talking carpet & paint only where you're in and out in a week. Another red flag for my company is providing "labor only" pricing which more times then not means working with low end materials or material delays forcing additional time. Good crews are too valuable to be tied up on a project with low margins and if you're requesting multiple bids that only adds to the problem of potential wasted time. It takes 8-12 hours to complete a full rehab bid from start to finish or $800-$1200 on average from a licensed and insured contractor in my world. With an average 50-60 hour week, opportunities are weighed carefully no different than an investor considering their own ROI.

I agree that finding a good contractor is tough to do these days which speaks to the basic principle of supply and demand. We provide the supply and the demand in today's world is like shooting fish in a barrel.

Wow !!!

This is a very interesting thread and it definitely tracks the norm in the contracting business. I'm a GC in the NYC metro area but have, over the past fifty years worked in other areas of the Northeast. First, I totally agree that there are no excuses for non-responsive contractors. If I've looked at a project and find that there isn't a meeting of the minds or that it doesn't fit the profile of services that we offer, after discussing it with my team to see if I'm missing something, either my office manager or I will call or send a message to the customer telling them that we aren't interested. 

That said, I would like to explain what it takes to develop a solid quote for work. In my first conversation with the client, I will ask for a complete scope of work (SOW) that drawings or sketches, includes a specification for fixtures, cabinet grades, ceramic tile, counter tops, paints and finishes, a lighting plan, etc. (In other words, what am I bidding on). Assuming that we're talking about a flip rehab because it covers a broad spectrum of disciplines, it will start with a site visit that I will do myself. This is a chance for a two way interview to take place, and a chance for me to assess the viability of "the project". In the city, with travel, that will typically take 4 hours. I will take some photos, specifically of conditions that require special attention and that I know my subs will find important. I then have to schedule walk throughs with my licensed trades, my demo guy, and any specialists that might be required to do the work such as lead or asbestos abatement contractors. With four or five trades including travel, this usually takes another six hours. Back at the office, my assistant has been going through the information provided by the client and is getting pricing on all of the items specified in the lists provided, and is starting to build the quote. We get the quotes from the subs within a couple of days (they're doing the same thing we are for multiple proposals, and we are finally able to put together a quote for the client. We write up our quotes so they are easy for the client to understand, and then send it off. From here it will bounce back and forth a few times as adjustments are made, typically to reduce prices (and my profit margin), and with luck, we come out somewhere in the middle of the pack and have half a chance of getting the job. More often than not however, we don't because the other bidders ballpark  or gut guess the cost of the job, which no one realizes until the project is in trouble, the contractor bails because he's losing his butt, or he's doing crappy work and using inferior materials for the same reason. 

The real $$ cost to my organization for developing a solid bid on a $100k project is around $1,600, on a million dollar bid it's many times that, sometimes taking a week or two to pull together. In a good market we will be doing four of these a month ($6,400 in bid costs) with a sell rate of about .5%

Mike F pretty much nails it (no pun intended, well maybe), more often than not owners and investors are looking for someone to design and work up their project for free. In my business, I am loyal to my subs, don't beat them up on price, and pay them on time. I look for the same thing in my relationships with clients, particularly professionals who are flipping houses. Show me the project, give me a full set of specs, and a guarantee that we will share the risk of the unforeseen, a pretty good indication that I have the job, and you will have my attention from "Hello".

Wayne V.

Investor & GC

NYC and Portland, ME

I find the challenge between investors, who need it done tomorrow, and contractors who can't waste time on non-producing projects, is one that should be addressed head on.  Estimating takes time, no doubt about it, and its very important.

I provide at least 3 contractors a detailed scope of services with an tabulated bill of materials ready to price and a national average labor time and rate.  A least 3 contractors get the list.  If their labor deviates by more than 5% from the national average I ask them to explain, and negotiate.  

Put yourself in the contractor's job.  It takes time on the investors part but good estimating is the key to a successful rehab. I don't scrimp on it.

To really learn how take a course in residential construction estimating at the local Community College. Contractors will appreciate it very much. Once they know how you make their job easier your rehab projects will flow a lot smoother.

Not everything can be learned on the internet... ie: brain surgery.  It takes good old fashioned class room schooling and a group sitting to learn properly.

Good luck