Should You Charge for an Estimate? - 12/13/2004 - Real Estate Education Training Schools Conferences

Should You Charge for an Estimate?

Then what? You go out to meet the customer, walk through the project, ask questions about the project and talk a little bit about your company. After that, you go back to the office and call your subcontractors and suppliers to discuss the project. You may even go back to the customer’s home with the subcontractors to go over some details.

Then, once you have gathered all the information you need, you write up the proposal and go back over to the customer’s house for the presentation.

You may meet with either the husband or the wife, seldom both. You review everything with the customer and then wait to hear the inevitable:

“We will have to think about it and compare it to the other bids we are getting. We will get back to you.”

So, you leave the customer’s home and head back to the office to do another "bid." Wow, that sure was fun.

You have done all that work — and you may not even get the job. Hours of time and effort for what? Just to be compared to three other "bids."

Do What Dentists Do

A friend of mine recently went to see a dentist. His initial visit was a “consultation visit.” He was charged $120.

When I make a telephone call to my attorney, I get billed for it. I also get billed for e-mail correspondence.

Even engineers and architects charge for every bit of their time. And here we are — out there for hours — charging nothing.

So, now do you think you should charge for an estimate?

Actually, I no longer go out and "bid" projects as I described in the first paragraph. I used to do that, but not any more. If you still do — stop!

Charging for Estimates Changed Who I Do Business With — for the Better

It was difficult at first to begin telling customers that I would charge them for estimates and design services. I was afraid of rejection and not sure what they would say or how they would react.

But, let me tell you what has happened since I started charging them for estimates:

First, I have stopped doing estimates for people who only care about price. Now I can spend my time with customers who really care about their project and our company.

I also have changed our entire presentation and sales processes. I no longer concentrate on selling price. In fact, it’s the last thing I sell my customers. I sell myself first, I sell the company second, I sell the product third and then finally, I sell price.

By telling your customers that you are charging for an estimate, you really are telling them you are a professional and should be compensated for your time. You will be surprised how many people appreciate that.

Go for the 'One-Call Close' and a Signed Agreement

Our company tries to do a one-call close, and we make sure all decision makers are at our first meeting, just like Phil Rea, the remodeler turned speaker/consultant, recommends.

Since our projects are pretty large, our one-call close includes having the customer sign our professional services agreement, which includes paying for the estimate and/or our design services.

A signed agreement alone will usually keep you from being part of three companies "bidding" a project.

You’ll Be More Productive With Your Time

Instead of having 10 estimates to "bid," I now have four projects on which to work.

Charge for your estimates, charge for your time. You are a professional. Act like it and charge for it. Trust me, your work life will be much more enjoyable because you’ll be working for customers who value your time as much as you do. 

Erik Anderson, CGB, GMB, CAPS, is vice president of Anderson-Moore Builders, Inc. in Winston-Salem, NC. He also currently serves as vice president of the Home Builders Association of Winston-Salem. For more information, contact Anderson via e-mail.