Getting Bids. Is Not Giving Details of Charges Acceptable?

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Getting Bids. Is Not Giving Details of Charges Acceptable?

Christine Swaidan
Investor · Ventura, CA · Member since 2016 · 264 posts · 70 votes

Because of recent rain storms and older units I am in need of some repair work on a couple of units.

I contacted a GC that I found on a neighborhood website. He had a few positive reviews on Yelp. He’s on Houzz, also. He was very responsive. I called him one day and we met at both properties the following day.

One house needs new roof,

2 deck surfaces will need to be removed and resurfaced,

Repair drywall damage,

Scrape ceilings in four bedrooms

Replace 4 windows

Place new weather stripping on four doors,

Install 4 new fan lights (I provide those, he will do electrical).

So the second house is 10 minute drive and by the time we got there he gave me a bid of $39,500 for the first job.

So we did a walk through at the second house and I told him I would like a bid for that work also but I wanted it in writing.

He agreed but said doing the bids takes a lot of time and he charges for writing them up.$150 per bid but he would give me the bargain on $150 for both bids. Ok, I liked the guy, he was prompt, and I know it does take a lot to produce a bid so I agreed to the $150.

When I met him last night I got a list of the scope of the project—what we had decided needed to be done –at the price of $39,500. There was no breakdown of costs. I want to know how much for the roof. I want to know how much for the decks, and I want to know how much for the drywall repairs and windows.

Is this a typical way to bid a project? If I would have known he would not give details I would not pay for the bid—he had already figured out the cost on the 10 minute drive to the second project—which was bid in the same manner.

Am I being taken here or is this—not breaking down the numbers and charging for bids—standard. This is making it very difficult to get competing bids.

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Michael Hayworth
Contractor · Fort Worth, TX · Member since 2015 · 379 posts · 740 votes
9y

Why do you care? You have a scope of work, and a price. What value are you going to get out of knowing how much is decking and how much is roofing? Do you ask the car dealer how much is for the engine, how much are the seats, and so on?

I'm a very successful contractor with exceptional client satisfaction ratings. I break my quotes down into major sections, but I don't itemize them line by line. If you're looking to ask me, for example, how much it would save you if you did demo and disposal yourself, I'm happy to calculate that. But good contractor's quotes usually don't look like an insurance settlement with 21 linear ft of baseboard at $x/lf, and painting that baseboard at $y/lf, and a quote ends up with 87 lines of itemized crap, but you're still not really sure whether all those pieces add up to the whole project that you're looking for.

If you get a quote like that, it's almost always a GC who subs out every single thing he quotes, rather than having any of his own employees and sourcing materials himself. They're just taking their sub's line items, adding their percentage, and giving you a list. Those guys can be OK, but they have less quality control than someone who has his own crews. 

Try not to overthink it. Find a contractor you can work well with, who has good reviews, and who can explain exactly what he's going to do for you. Make sure all the bids include the same thing and you're comparing apples to apples, but don't get too bent out of shape if one contractor has a quote that looks like an insurance settlement and another gives you a quote that looks more like mine.

Also, most contractors don't charge for quotes. That may be a sign that he feels like you're going to be a timewaster. It doesn't sound like that's your intent, but all we contractors have to sell is our time & skill, so we're cautious about spending too much time on someone who doesn't seem to be a likely client.

(None of this is to say there aren't contractors out there who are incompetent, or just mediocre, or outright cheats. Unfortunately, we get asked to fix their work on a regular basis. That's why you check references and ask to see current jobs if at all possible.)

Good luck on all this.

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  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    9y
    I would have moved on after that ridiculous bid, I know SoCal is overpriced but lol
    2Reply
  • Joshua Fulenwider
    Rental Property Investor · Greeley, CO · Member since 2017 · 226 posts · 99 votes
    9y

    You are correct in wanting a breakdown.  He doesn't need to document every nail and shingle but you should get something better so you know where your money is going.  There are so many benefits to having broken down bids from helping you build your knowledge of repair costs, to comparison shopping, to documentation in the even of litigation.  Definitely insist on it being broken down.

    Also, until you have established relationships with people you trust get a minimum of 3 bids.  This helps keep them all honest.

    $150 bid write up sounds to me like you may have already gotten taken but I don't know if that is standard for your market.  It's not here.

    1Reply
  • Christine Swaidan
    OP
    Investor · Ventura, CA · Member since 2016 · 264 posts · 70 votes
    9y

    Thanks, @Joshua Fulenwider I really feel out of my element as an older woman going it on her own. Unfortunately right now is a busy time for contractors and I'm sure he could pass on my job and do just fine some where else. I don't know if it is standard or reasonable to pay for bids but the bid I got was worthless for comparing to anyone else--I have a bid for the roofing from another guy. I'm mad at myself for paying him the money already.

    0Reply
  • Michael Hayworth
    Contractor · Fort Worth, TX · Member since 2015 · 379 posts · 740 votes
    9y

    Why do you care? You have a scope of work, and a price. What value are you going to get out of knowing how much is decking and how much is roofing? Do you ask the car dealer how much is for the engine, how much are the seats, and so on?

    I'm a very successful contractor with exceptional client satisfaction ratings. I break my quotes down into major sections, but I don't itemize them line by line. If you're looking to ask me, for example, how much it would save you if you did demo and disposal yourself, I'm happy to calculate that. But good contractor's quotes usually don't look like an insurance settlement with 21 linear ft of baseboard at $x/lf, and painting that baseboard at $y/lf, and a quote ends up with 87 lines of itemized crap, but you're still not really sure whether all those pieces add up to the whole project that you're looking for.

    If you get a quote like that, it's almost always a GC who subs out every single thing he quotes, rather than having any of his own employees and sourcing materials himself. They're just taking their sub's line items, adding their percentage, and giving you a list. Those guys can be OK, but they have less quality control than someone who has his own crews. 

    Try not to overthink it. Find a contractor you can work well with, who has good reviews, and who can explain exactly what he's going to do for you. Make sure all the bids include the same thing and you're comparing apples to apples, but don't get too bent out of shape if one contractor has a quote that looks like an insurance settlement and another gives you a quote that looks more like mine.

    Also, most contractors don't charge for quotes. That may be a sign that he feels like you're going to be a timewaster. It doesn't sound like that's your intent, but all we contractors have to sell is our time & skill, so we're cautious about spending too much time on someone who doesn't seem to be a likely client.

    (None of this is to say there aren't contractors out there who are incompetent, or just mediocre, or outright cheats. Unfortunately, we get asked to fix their work on a regular basis. That's why you check references and ask to see current jobs if at all possible.)

    Good luck on all this.

    8Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    9y

    I don't like how this guy is handling you, either.  I'd write him a demand letter to refund your payment for a bid that is not specific, saying you'll take him to small claims court if he doesn't refund it.  Then, do it.  He probably can't afford a lawsuit, as far as his time and reputation goes.

    Plus, did you get a license number for this guy?  You can always complain about him.

    http://www.cslb.ca.gov/Consumers/Filing_A_Complain...

    2Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y

    Hi @Christine Swaidan,

    The harder you emphasize you are getting bids from multiple contractors and hardcore shopping to get the lowest price and quality, the less time any reasonably intelligent person should expect any reasonably intelligent contractor to put into any particular bid.

    A family member of mine is a high service, high quality GC, always available via cell. Up in Sacramento, not so much here in the Bay Area. I've audibly heard the tone change between client-types on phone calls minutes apart. And it makes sense. Some people want to be taken care of and have it done right, some people want the cheapest work at the lowest quality. He adjusts accordingly.

    I don't believe the actual work he does is actually any different in terms of quality. But the cheapo person is less likely to appreciate it, so he is less eager (it certainly appears) to want to earn that business. 

    3Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    9y

    If you want the bid itemized and he refuses and having the bid itemized is a big deal to you then just move on to another one of the hundred contractors in your area that can do the work you outlined and itemize the bid.

    Do you have a good knowledge of repair costs?  If not, consider having someone on BP or locally walk you through roughly what things should cost to fix for your area.  I live in an expensive area to get work done here in CT and $40k for the work you outlined is very high in my opinion.

    2Reply
  • Christine Swaidan
    OP
    Investor · Ventura, CA · Member since 2016 · 264 posts · 70 votes
    9y

    @Michael HayworthThanks for your response. I’m happy to hear from a contractor. I would think the value of breaking down the bid would be obvious—which is the reason for the question. On the first house there were three areas that I wanted to keep track of.

    1. Cost of roof
    2. Cost of decks
    3. Cost of repairs—4 retro-fit windows, drywall replace, install 4 fan lights, scrape and retexture ceilings, replace weather stripping on 4 French door. For the record I was not asking for a breakdown of individual items, just these three categories.

    Roof and Decks are subbed out to different companies. You’d think it would take no time at all to give me the breakdown on these items.

    Same with second house repairs. He lumped repair of outside wall with rain gutters that he will sub out.

    So I got the numbers today—one week after oral bid. Everything that he is subbing out looks decent. The repairs that he will do seem high. $24,000first house repair and $14,600 for second house (replacing siding and one window).

    I don't  have a good idea what things should cost and getting this type of bid doesn't help my education.

    I did check to make sure his license is good.

    I suck at this.

    1Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Christine Swaidan When I was doing contracting work, it was rare for me to do a full breakdown. The reason is that I'd always get a client trying to piecemeal my total bid. Many items' labor overlaps, so doing the job as a whole allows me to bundle together labor and get a lower cost than if I was called in one day to put up trim, another day to do floors, another day to paint the trim, etc etc. Even if its different subs, its still my helper labor that I need to pay each day those parties are there and my overhead to monitor the job in pieces rather than a full blown job.

    Of importance on the bid is an extremely detailed scope of work and fixed price for the work. I also didn't provide that type of quote for someone just looking at properties, because if I did for everyone it'd require me to hire an entire staff with as much time as it took. But, once ready to begin and before the deposit changed hands, I'd provide a full list of every little thing that would be included so there were no issues with change-orders or misunderstandings.

    Remember, just like how an agent only gets paid on a sale, the contractor only gets paid when he/she gets the work, so any education provided is somewhat free.

    Estimating by yourself based on past numbers is a dangerous path to follow if you don't know the details of what you are talking about. For instance, a new shingle roof layer can go up for $200/sq (100sqft). A full tear off and you're looking @ $350/sq. And that doesn't take into account roof heights, extreme slopes, flashings, eaves, decking, etc. Quickly your $350 number could double, or it could get cut in half. That's where it's worth it to build a relationship with a solid contractor and delegate the remodel pricing task to them, just like you'd delegate your contract review to your attorney.

    4Reply
  • Christine Swaidan
    OP
    Investor · Ventura, CA · Member since 2016 · 264 posts · 70 votes
    9y

    Thanks, @Matthew Olszak I would love to establish a relationship with a contractor that I felt was going to do the best for me. Haven't managed yet. Am frustrated!

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    9y

    @Christine Swaidan Don't be frustrated, just keep searching. Eventually you'll run into someone who will work with you on a level that leaves you looking at them like a partner of your business rather than just another necessary expense who is trying to take you for every dime they can.

    1Reply
  • Josh Cuthbertson
    Professional · Redding, CA · Member since 2017 · 123 posts · 81 votes
    9y

    This is called a fixed price bid. He is taking all of the bids he gets, and either marking up each one, or marking up the total. Contractors do either/or depending on how much they want to make. Our firm would NEVER do a project without seeing a line item breakdown. Ever. If he doesn't want to give that to you, he is either hiding his markup, or estimating on the high end to make sure he doesn't need to ask you for more money later. Heck, without seeing the breakdown, he could just be guessing on the high end and worrying about it later.

    Get competitive bids, ask for their breakdowns, and ask what their profit and overhead will be. All reasonable questions. If he can't take an hour to break them down for you, that is a huge red flag, at least it would be for me. 

    1Reply
  • Michael Hayworth
    Contractor · Fort Worth, TX · Member since 2015 · 379 posts · 740 votes
    9y

    @Christine Swaidan....I actually see now that I misunderstood your original post. When you spoke of decks, you were talking about actual decks. "Roof decking" is the plywood underneath your shingles, which is often replaced with a roof. As I read your post, probably late at night, I thought you were wanting a breakdown between the shingles and the decking. I've been asked for similar things by clients who want to do exactly what @Matthew Olszak mentions above in trying to piecemeal the bid.

    But, yes, if you have a roof project, two house deck projects, and some drywall work, I would expect a quote would break down those major sections, and separate the two house deck projects in case you wanted to do one and hold off on the other. My apologies for reading too fast and misunderstanding your post.

    1Reply
  • Yia Her
    Real Estate Investor · Sacramento, CA · Member since 2016 · 96 posts · 26 votes
    9y
    Move on to the next contractor. And yes he pulled a fast one on you when he charge you $150 for the same verbal bid when the written bid is no different.
    1Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    9y

    Serious GC's don't itemize bids.

    They know that they will inadvertently overbid some items and underbid others.

    If they allow you to cancel on the items that were overbid (and hire someone else) and only hire them for the underbid items they will lose money.

    I can't speak on how good or bad his total number was, but this is why legit GCs do not itemize.

    2Reply
  • Account Closed
    Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    9y

    The roof is probably is the most expensive part of your bid the rest like decking drywall and a few windows is minor  The important part of roofs is if it is a tear off and replacement of plywood etc or going over and existing roof i would get a bid from a good  roofing company who will give a detailed breakdown and price  Then you can get a quote on the decks and windows drywall from another contractor you probably do not need a gc for this job 

    1Reply
  • Christine Swaidan
    OP
    Investor · Ventura, CA · Member since 2016 · 264 posts · 70 votes
    9y

    Thank you to everyone who has responded. I feel I have a better grasp of the situation now. I'm not looking for the deal of the century. I am looking for honesty, respect and quality work in a timely fashion. I also realize that this is an older house and once things get opened up there may be dry rot or termite damage that will need to be repaired. I expect to pay extra for extra work. I didn't like that feeling that I was being taken advantage of. I shall get at least one more bid on repairs and see where that leaves me.

    REALLY appreciate the education.

    0Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    by his bid I do think he was attempting to take advantage of you and for the scope of that project you should get 3-5 more bids, not one more

    1Reply
  • Franco Li
    Vendor · New York, NY · Member since 2017 · 217 posts · 88 votes
    9y

    I hate when folks like that try to take advantage of innocent people. It is not professional at all for them not to list the details. You need to look at other bids for sure before making a decision. 

    1Reply
  • Brianne H.
    Investor · Calgary, Alberta · Member since 2016 · 168 posts · 123 votes
    9y

    Maybe I'm misunderstanding, but how did he go from $39,500 for the first house 10 mins after leaving that property, to $24,000 for the written bid? Some change in price is to be expected when he gets a chance to actually sit down and break the numbers down, but that's a huge price difference... nearly half. And the first number he gave you seems extremely high to me. First reg flag. After having a chance to think those numbers through, nothing is broken down, not necessarily line by line, but at least into projects/categories. Red flag number 2. Charging $150 for a written bid is red flag #3 to me. Unless it's a common thing elsewhere that I'm not aware of, providing estimates is part of the job, and it's quite common to get several estimates for a project. Not every estimate a contractor gives will turn into them getting the bid, but that's the nature of the job. I've never paid for someone to give me an estimate. I would get a couple more people out to look at the properties and don't be paying for any more estimates. 

    1Reply
  • Tom Olson
    Property Manager · Gary, IN · Member since 2015 · 66 posts · 60 votes
    9y
    I believe there is a lot of gray areas here. And I'm not going to take an extreme side on any. But I will take an extreme line on this... IT DEPENDS..... like was mentioned many times in this thread many serious contractors will not give full detailed SOW for rehabs or projects of this size. But what has not been mentioned is the fact that many serious contractors don't really go after investor business. Why? Most of us investors are cheap! Let's face it it's not emotional for us it's a business. Our company will rehab (for investors) 200 homes this year in the NW Indiana and Chicagoland area. For this we will need to do about 350 SOW on average it takes about 4 hours to go to a job measure it up put all the info in out app that we created have it spit out the #s for materials and what we should be charge if for labor. Then look at our city profile to figure out the pain in the butt factor of the city or town or village and the other logistical things that could happen. So if we do not charge for the 150 sow that we didn't get the work then we loose about $20,000 -$30,000. This is no big deal to some but when that # directly effects the bottom line? It makes a difference!! So we decided to start charging our customers when we take the SOW out of our system (meaning we did not get or do the job). If for some reason we ever do that job for that customer we do credit them the cost of the proposal back into their proposal.. keep in I'd most of my work comes from repeat customers that use us for 4,5 -20 projects a year so there is a level of trust that is built up and to be honest they don't want to take advantage of me doing bids on projects that they later decide not to go through with because the #s may not work or we find out it has major issues or the city will make your life a living hell.etc. etc..... the retail contractors are very busy right now but unfortunately there are a ton of slime balls out there but let's back up unfortunately there are also a lot of slime balls in real estate.... the basic fundamental issue here is "TRUST" I highly recommend anyone that is a contractor interview your customer and anyone that is a customer interview your contractor either way they are your customer and there is a level of service and value that you need to bring to the table if you want to call the shots.... the problem here is investors want to call the shots and so do the contractors.... for as many contractors that take advantage of customers out there I have seen investors take advantage of contractors and neither one of them is right!! At the seat of a deal I don't care who you are (the investor or catalyst, the lender, the contractor, the realtor, the title company the buyer the seller etc.... if anyone over reaches it tips the tables and it now ends up being good for no one... the specifics of something like this is just stuff but the mindset of how we aught to be as a human is what really matters.... either way you are serving a customer and if you don't add to that person more value than you took in price then to will never be trusted. We do itemize our scopes because we believe it brings value to the customer however if a customer wants to rip up most of it and only have us do items that others can't do cheaper then we will no longer be their contractor simple as that as a contractor you have to sometimes fire your unreasonable customers just like at times an investor has to fire an unreasonable contractor... As far as the prices. If you are inexperienced you can study these prices over time and see what other people are paying.. you can get other quotes but best of all ask for referrals from other investors or realtors that have used that particular contractor... this will help you get past the know like and "TRUST" part of the conversation a little quicker.. As investors we have to "Trust but Verify" Hope this helps Tom Olson
    1Reply
  • Christine Swaidan
    OP
    Investor · Ventura, CA · Member since 2016 · 264 posts · 70 votes
    9y

    Hi @Brianne H. I was not as clear as I should have been. The $39,500 breaks down into

    $6500 for roof

    $9000 to install new deck subflooring for 2 decks

    $24,000 is what is left over in the price and will cover 4 retrofit windows, repair of drywall, etc.

    I called a total of 5 contractors, for additional bids and have set up meetings for Tuesday and Thursday and hope to hear from other three on Monday for possible meet up.

    I will post the bids that I get for anyone who is interested in following this story.

    0Reply
  • Christine Swaidan
    OP
    Investor · Ventura, CA · Member since 2016 · 264 posts · 70 votes
    9y

    @Tom Olson You are right. I do have different standards for work done at my personal residence vs. work at rentals. Good point. So maybe this is just a bad march. I'm looking for a contractor to do rental work but he might just be the perfect contractor when I decide to redo my kitchen. Hmm.

    @Steve B. and @Franco Li I was trying to minimize the inconvenience for the tenants and also get going on this project ASAP. Neither of which is happening.  :(  I didn't want to bring in a bunch of contractors but looks like we are heading in that direction. I thank you for your comments and support.

    0Reply
  • Christopher B.
    Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
    9y
    Originally posted by @Michael Hayworth:

    Why do you care? You have a scope of work, and a price. What value are you going to get out of knowing how much is decking and how much is roofing? Do you ask the car dealer how much is for the engine, how much are the seats, and so on?

    I'm a very successful contractor with exceptional client satisfaction ratings. I break my quotes down into major sections, but I don't itemize them line by line. If you're looking to ask me, for example, how much it would save you if you did demo and disposal yourself, I'm happy to calculate that. But good contractor's quotes usually don't look like an insurance settlement with 21 linear ft of baseboard at $x/lf, and painting that baseboard at $y/lf, and a quote ends up with 87 lines of itemized crap, but you're still not really sure whether all those pieces add up to the whole project that you're looking for.

    If you get a quote like that, it's almost always a GC who subs out every single thing he quotes, rather than having any of his own employees and sourcing materials himself. They're just taking their sub's line items, adding their percentage, and giving you a list. Those guys can be OK, but they have less quality control than someone who has his own crews. 

    Try not to overthink it. Find a contractor you can work well with, who has good reviews, and who can explain exactly what he's going to do for you. Make sure all the bids include the same thing and you're comparing apples to apples, but don't get too bent out of shape if one contractor has a quote that looks like an insurance settlement and another gives you a quote that looks more like mine.

    Also, most contractors don't charge for quotes. That may be a sign that he feels like you're going to be a timewaster. It doesn't sound like that's your intent, but all we contractors have to sell is our time & skill, so we're cautious about spending too much time on someone who doesn't seem to be a likely client.

    (None of this is to say there aren't contractors out there who are incompetent, or just mediocre, or outright cheats. Unfortunately, we get asked to fix their work on a regular basis. That's why you check references and ask to see current jobs if at all possible.)

    Good luck on all this.

    I think she got a piece of paper that said "Work to be performed at 123 main st is $39,500". She already had the scope of work, he just handed her a flat price for the total job. It's not out of line to expect a basic breakdown of the work to be performed. 

    0Reply
  • Justin B.
    Investor · Gaithersburg, MD · Member since 2013 · 660 posts · 441 votes
    9y

    I'll try to answer your questions simply and to the point.

    -- Yes, you are correct in wanting a breakdown.  You don't need it too detailed, but you do need each major piece broken out.  There will most likely be a combination of expenses to take and items to depreciate.  The IRS requires that you do so according to their rules, so for example, you will need to know what part the roof costs.  He may very well be able to provide you detailed expenses after it's done, but you should get the breakdown beforehand so you know you aren't getting taken for a  particular part of the job.  Not that people are crooks, but if the average roof install is $10k for your area and size of house and you see $17k on his quote, you know something is up.

    -- As for paying for a bid, that is not common here and I live in one of the most expensive areas in the country.  If it is commonplace where you are, fine (a little research can tell you that), but I've never heard of it.  That's part of sales.  Anyone who's every been in the business that sells anything knows this.

    Good luck!

    0Reply
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