I’ve been in this business for 40 years, give or take. And it just occurred to me that builders, homeowners, and just everybody else we deal with has a language problem.
Basically, we’re not speaking the same one as each other—and we might not even know it.
Where I work, the words “bid,” “estimate,” and “quote” are not only used interchangeably but they have different meanings to different people who are also using them interchangeably and now my brain hurts because I bet it happens in an endless series of variations depending on where you live.
Should I take the red pill or the blue pill?
This all grew out of a conversation with a homeowner applying for a construction loan. The bank requires three “bids,” one of which was mine.
However, the HO requested an “estimate” from me. Period. So that’s what he got: I walked through the job, took notes, and spent the usual three hours at the desk doing my usual estimating process. I outlined the scope of work, calculated how long I thought it would take, estimated materials and costs, and added it all up. I estimated the job would cost $52,000, and I said that clearly in my paperwork.
To be extra specific: I didn’t say, “This job will cost $52,000.” I said, “This job will probably cost $52,000.”
But the bank wants a line-item “bid” or “quote.” X-dollars for electrical. X-dollars for tile repair. X-dollars for a new deck, and so on.
That request is different from an “estimate.”
It requires much more work, and is more of a consultation than estimate—combined with the fact the HO doesn’t know what an estimate is anyway … combined with the fact that I didn’t communicate to him what he was going to get. One, two, skip a few … I’m in it up to my neck here. For free. (Before you yell at me, my market just won’t bear charging for estimates.)
But it got me thinking about these words and what they mean and how that could lead to some really sideways situations. Or at the bare minimum, wasted time.
So, of course, I went online and—since I read the following there, it must be true: Signing an “estimate” converts it into “bid” or “quote” automatically, which is a different document legally speaking. In other words, if you promise that new kitchen for $68,000, that’s it. There’s no provision if things go wrong.
I’m no lawyer, but this got me thinking that if an HO was particularly contentious or they worked in the legal profession and really wanted to have at it, nobody—except maybe the lawyer who can research the legal meanings of these words—has a fighting chance if things go south. And, of course, the lawyer always gets paid.
Where does that leave us? Well, for me, I think it makes sense to agree on terms—what each of the words means and what the result of using them is—early in the conversation. It means that I need to define these words for myself and then share that definition with homeowners at my initial client meetings.
My “estimates” are usually pretty good so I’ve never much run into a problem other than the time I’m pouring into this quo-esti-bid for the bank—which I now should be charging for. And my clients are typically reasonable people who want a kitchen, deck, roof, and so on more than a fight over one, which makes me lucky by circumstance as well.
But all this leads me to questions:
– How do you handle this scenario? Do you define terms?
– Have you had homeowners hold you to a price?
– What are your actual definitions of these words?
– Do you define these terms up front?
– How do you define these terms?
– And I might as well kick this cow: Do you charge for estimates?
– If so, how?