Roofing Bid Question


#1

I have a couple of quotes from roofers for a 10 square tear-off/reshingle with new gutters and fascia. The quotes seem high by about 20-30% from what I’m calculating from the net or from trade sources. Everyone seems to provide a lot of detail as to the very fine details of the work (ice/water guard, picking up nails, reflash soil stack, etc) that are either required by code or identical between quotes. Nobody ever breaks down the job in a way that would be informative and allow me to evaluate how the final quote was obtained (e.g.) 10 squares + tear-off @ $X square, 150 gutter @ $X/foot, etc. This kind of proposal really wouldn’t fly in many types of business, but seems to be commonplace in roofing, why is that? It seems like the majority of the customer base is uneducated, so the industry emphasizes sales over substance in order to sell jobs. I’m not against paying a fair price, I’m not looking for a low-bid, inferior job, I just don’t know how to decide what a fair price is based on the information I’m getting.


#2

Estimating a roof by my opinion and many peoples opinion can not be done by the square. Too many variables. Generally speaking, a good roofer and/or estimator will look at the style and technical difficulty of a roof, the height of the house since all the materials need to get to the roof and it takes twice as long, usually more since you get tired, to climb 20 ft. than 10 ft., the surrounding landscaping, whether its a hillside that is tougher to stage sometimes, or trees and bushes are both in the way and need to be protected. How steep or not steep a roof is. Most estimators figure labor, materials plus 10% waste, overhead, and profit. Some just do it by the square but they either learn quickly or go out of business.


#3

Why would you just not increase the cost per square in your estimate and still estimate by the size of the job? Many of the factors you mention, (height, pitch, etc) affect the whole roof, so should easily factor into a per square estimate. Even if you don’t do this, which is ok, the bottom line for the success/failure of an estimate is an accurate assessment of your materials cost and labor resources (cost and time). So even if you estimated it by materials cost and man hours, it would be much more informative than a single number and some useless sales info. What would be the objection to that approach? It would at least provide some transparency as to where the quote is coming from. It’s like buying a car w/o knowing the invoice price, the dealer has to make a profit to stay in business, but they make a hell of a lot more profit off of people who are willing to pay whatever the sticker says w/o knowing the underlying cost.


#4

Then ask them to break it down what they figured in time plus materials if thats the way they did it. Just realize that when you hear $60 an hour, or $100 an hour or whatever they quote per hour, that all their overhead is built into it, it is not all going into their pockets. Now, using your example, is fictitious Dave’s Auto Sales going to have the same overhead as fictitious Car World? Does Dave have the clout to get the same car at the same price as Car World? Maybe Dave’s a nice guy and stable enough to fix a transmission, and maybe Car World is a corporate behemoth with lawyers that made sure they covered themselves in the sales contract. Maybe Dave’s an unstable hustler and Car World has a great service department. In the end, you still have to make a gut decision. Same thing here. Invoice won’t tell you everything, probably nothing but the price.


#5

I totally agree that knowing the underlying cost is just one factor in a more complicated decision process, I just disagree with the practice of making that information hard to obtain and instead replacing it with sales fluff that might affect the job price by a few %. And while the final decision may include some factors that you can’t put an exact dollar number on, that doesn’t make it a “gut” decision, it makes it a subjective, but educated decision. If someone breaks down the materials cost and I know that they marked it up 100%, I would at least know I’m getting screwed and how. If their labor prices are 10% higher but I have more confidence that they’ll do great work, I’d be willing to pay that. I’m not looking for an exact formula that tells me which proposal to go with, I’m just looking for someone to explain things to me on factual terms rather than spending 90% of the time telling them that my soil stack gets new flashing and how they’ll pick up the job waste. I should have asked for the price breakdown as you suggested, I wasn’t home when they stopped by and just received the written proposal which was a preprinted checklist of the obvious. I am meeting with a contractor tonight and I’ll ask him to break it down and see how that goes. Thanks for your input.


#6

Bottomline:

You should be able to get bids the way you are asking, but you probably won’t like the price on several items because you don’t see the whole picture. You may get a bid for shingles at $250 per square, fascia at $10/l.f., and gutter at $12/l.f. (don’t read anything into my numbers, they are totally arbitrary). Now, you may look at the $10/l.f. price for fascia and think for an 8 foot length of 1x8 you can buy it at Lowe’s for $10, so why pay $80? You obviously would not be thinking about labor to install, possibly paint, nails, set up time for the ladders, cutting the wood (so figure in saw blades and saw use since they have to pay off their tools), overhead, profit, etc…

Also, looking up pricing on the internet is a great thing except that roofing costs are very much regional. Here in Houston where much of the labor consists of Hispanics that have come to this country seeking work, and work very cheaply, prices are much less than they would be in other parts of the country.


#7

We are asked this question a few times a year and do not break it down. As severance and gallant said every roof can vary and per square prices can vary also. Most people who want this done are just worried that somebody is making more money than they feel is fair. If you have 3 quotes and they are all in the same ballpark why does it matter? You thought that they were 20-30% higher than they should be. Why? What sources are you basing this on? Most people take wild guesses at costs and have no idea the true costs of running a roofing business or any other business.
Most estimators do not have time to break down quotes and it is commonplace in more than just roofing to quote like this. Siding, Windows Paving just to name a few. I can guarantee you that most roofers aren’t retiring early with the profits off of your job.

Just ask for a 20 to 30% discount.


#8

You bring up a good point.

Most people don’t realize how much insurance costs are for roofing companies. So, I’d be curious to find out what kind of insurance rates everyone here is paying on a percentage basis per job. I think a lot of people would be shocked how much of their new roof costs are actually insurance related.


#9

Insurance really is the big factor. I will break it down and start a new thread. Our insurance for our flat is much more than shingles and we have reduced it considerably by not using torch on.


#10

I deal with some companies that install low-sloped roofs, but don’t own a torch for insurance reasons.


#11

i pretty much only do shingled roofs… 37% of whatever I pay an employee gets paid to comp. 1.6% of their salary gets paid to liability. 7.5% to unemployment insurance (FICA). Looked into health insurance… holy moly. Don’t even want to talk about it… and I don’t know about everywhere else, but here in Mass., if you offer health to one employee, you have to offer it to all after a given amount of time. So, if you’ve got a pair of dead hands employed you still have to give it to them, no choice.


#12

Tromper,

Could’nt you just divide your quotes by 10 and get your answer.

I think your time would be better spent checking references.

JMO


#13

We don’t like to break down quotes because then it turns into haggling. Many quotes don’t lead to contracts and we can’t afford to spend a lot of time that doesn’t lead to generating sales. Another reason is that we had to spend time , gas, & truck mileage to look at the roof and measure it, and we don’t want to compete with other bidders that use our details. If you have several bids and they aren’t wildly different, you have a fair price. You should be more worried about whether the roof you get doesn’t leak and lasts which is a better measure of value.


#14

I have gone so far as to include complete breakdowns of material, labor, overhead and profit for a select few people, and they went with uninsured lowballers anyways…makes you sick, and never want to waste the ink, paper and time to do it again.

Last thing I need is for a cheapo customer dictating how much I (the company really) should make.


#15

It’s intereresting that some people are against breaking down a quote because they feel it would cut into their profit margin or that the customer is unable to comprehend the fact that they pay a lot for insurance. The additional costs that a lot of people are mentioning (liability, overhead, insurance, etc) are common in many businesses (and a lot higher in some) and it is commonplace for contract work that they get rolled into the labor or task rate. Labor rates for something like designing a circuit board through a contractor would easily be 100+% higher than a company’s own internal rate (including overhead) for an employee. A standard rule of thumb in engineering consulting is that the consultants charge an hourly rate at least twice what their hourly rate would be as a full-time employee because they pay their own SEI, health, retirement, etc. The point being that the roofing industry is a business like any other. Some people may not understand that, a hell of a lot of people would. A lot of quotes don’t lead to contracts in most businesses, it’s not an excuse. And while quality and cost might be related, there is no guarantee if I take the high bid that I get the best job, is there? Why should I hire someone who won’t answer my questions? I’m not arguing that roofers charge too much, I’ve helped on roofing jobs before, and that’s exactly why I am more than happy to pay a pro to do it now. It’s tough work, and the consequences of doing it wrong can easily exceed the cost of the job. Surgery is pretty expensive too, few people elect to do it themselves.

I met with a contractor in person last night (previous bids were while I was at work and just left the paper), he was the third bid that I got. He actually provided a line item proposal w/o me asking as part of standard procedure. It wasn’t a labor/materials breakdown, it was more a detailed task breakdown and installed cost for each task, which was fine. It made me realize where the additional cost over my estimates was coming from (I underestimated gutter part of job), which was all that I wanted. He was the high bid of the three quotes by about 3%, but he spent an hour detailing his proposal and the additional work he was doing more than made up the difference, so I went with the high bid because it was the best price for the job he was doing.

Thanks for everyone’s input, it’s interesting to hear the point of view of the other side of the transaction. I agree with some of you that a lot of customers are clueless and it may not always be in your best interest to provide too much detail, but in some cases it might be what lands you the job.


#16

In SOME cases, you make a gut decision that somebody CAN understand that theres overhead and costs to running a business, and you do break it down. I’ve had customers just pay my suppliers when they got there as a deposit. Nothing hidden there… actually, they didnt get to see the stuff I already had that I put on there roofs. Like someone else said, if you’re asking for it to be informative thats one thing, but I refuse to haggle. I wont lower my price one red penny to get a job, havent in a long time. I make my case that I will do it right.

One thing you’re missing about roofing that differs from most things is… theres not much repeat business even when you do a great job because how many houses does the average person own? Thats why we don’t have the time to give detailed estimates to each person. It is a FREE estimate and like someone else said, customers end up telling the cheap guy all our specs and he agrees and goes with them… doesnt mean he even knows why he’s doing it that way, he just agreed to get the job. Another person said something else… get references, go see the houses. I’m not a pressure sales person, I tell MY potential customers to go get a few more estimates and call me back. I SPEND MY FREE ESTIMATE TO YOU to give myself a chance to explain what seperates me from others and let you know what to expect and what not to expect, rather than drop you a wasted price in a mailbox. And I will never lower my price anyway, whats the point in telling you how I got it. To me, the price is a minor detail.


#17

What you’re misunderstanding is that you aren’t giving people “free” estimates, you are absorbing your cost of soliciting business which gets rolled into your overhead, which is passed on to your customers. If I hire you, I am not only paying for my own estimate, I am paying for every “free” estimate that you gave that didn’t result in a job. The higher percentage of jobs/proposal you get, the lower this cost will be per job. You’re throwing away money and raising your overhead costs if you lose potential business because of your preconceived notions of what the customer is or isn’t entitled to. To you, how you got the price may be a minor detail, to the customer, it may be what makes him choose, or not choose to hire you. Maybe you only do 2 roofs for one customer, but maybe he refers you to 10 other people, which results in more jobs, and continued referrals. Wouldn’t you ideally have all of your business be referrals, because those people already believe in the quality of your work? To see one “free” estimate as the end of the line is shortsighted.


#18

More than one person on this board is not interested in growth as a company. To me it sounds as if he is where he wants to be work wise and is getting enough work to sustain his business as he sees fit.
Giving estimates does cost you are right about that for sure. Generally speaking though people that are looking for estimates are looking for the low cost provider. IMHO the low cost provider is not what a high quality company needs to be especially in this business where there is such a difference between high quality work and low quality work even if the same materials are used.
Generally low cost providers are either new or have a big nut to crack overhead wise each month. High quality work generally speaking will not come from companys like that because the people that do that type of work employee wise will eventually end up in their own business.
Bigger isnt necessarily better in this case, I would generally go for a guy that is not out soliciting business, if he is it means he is not busy enough and that word of mouth is not cutting it for him.
Just my 2 (red) cents.