Reply to Pricing Renovations

Forum Index » Home Improvement, Design, and Decorating

Reply to "Pricing Renovations"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous]I am a General Contractor that specializes in high end residential remodels.

Common in the Industry is the idea of the Iron Triangle - meaning the three constraints that oppose each other in construction  - Quality, Price, and Time. The prevailing wisdom is that you can only have two.

My firm is small as I manage my own work and subcontract out the work.

While not perfect, my work is regarded as meticulous.

I have found, mainly post COVID, that clients are very sensitive to schedule, meaning construction duration.

Further, it is not uncommon for partners in a marriage to have differing views - meaning one partner may be concerned with the details, while the other is more concerned with construction time.

Most of the folks in the trades understand that good work takes longer.

I also price enough work and work to keep my price competitive. Most clients agree when I explain that my goal for my pricing is for my price to be less than the quality I deliver. I explain that is my view of value.

Against this backdrop is the fact that tradesman are aging out of the industry and the new generation does not yet have the experience and knowledge required for good work.

So this makes delivering construction on schedule even more difficult. Add in the likely scope creep on a job and more often than not we miss the schedule.

So, as I think about pricing, I am starting to think that I need to raise my prices to provide the ability to apply more resources with the goal of decreasing construction time.

I also realize though that means the clients and the design teams need to stay current on decisions and selections - which is not a given - so it is likely that my margins will be compressed.

I came home last night and there was an Amazon truck in my driveway at 7 o’clock. My wife had ordered something the night before. I realize this is one of my challenges as clients can have this retail experience but we, in construction, cannot deliver this service.

I realize this is a long post but I thought to crowd source client side thoughts on remodeling pricing.

Given a typical remodel price of 750,000.00 or greater - the likely pricing differential would be 10-20 percent.

Lastly, I do believe that you lose quality as you gain speed.

So, overall, how much more would you be willing to spend on a whole house remodel for a larger crew that in theory can deliver on schedule or at least provide better schedule visibility ?
[/quote]

I just went through pricing out a major project. I received one quote that was roughly 60% higher than the other, which has been typical of my experience getting bids for projects in the area.  There are contractors that seem to want to come in as low as possible while others seem to figure they can just shoot for the moon and while they might get fewer jobs they figure they will make their money on those few.

The problem is that it isn’t clear that paying the higher price actually gets you anything different or better.

What I would appreciate is if a quote laid out options.

“If you want it done in 6 months it will cost xxx.”

“If you can wait 9 months it will cost yyy.”

Providing that transparency allows the customer to decide whether it is worth it to them.  (Especially if they need a rental during the project)

In my case I actually went with the higher quote, but I will never know for sure that what I am getting is really a good value.

[/quote]

The problem for the contractor in pricing that way is that if you don't hit the six month deadline it's too easy for the customer to demand the nine-month price. It's not going to matter to the customer if the delays were out of the contractor's hands, and that if the customer had signed up for the nine month project it would have taken twelve months. [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics