What Is A Free Estimate?
Whenever we hear the word free estimate, most homeowners
cringe. There's nothing free about the word free estimates. Contractors
need to make a living and they provide estimates to their customers at
no charge, simply because there is too much competition to charge for
these estimates.
Before the 1960s, it wasn't uncommon for contractors to charge
homeowners for the time that it would take them to figure out the price
of a home repair or remodeling job. It takes time to put these estimates
together and most contractors pay themselves for the time that they
spend putting these proposals together.
These free estimates are considered business expenses or costs of doing
business for the contractor. Whenever you see the word profit at the end
of your proposal, this is the contractor's business expenses, otherwise
known as overhead, in the construction business.
If a contractor gives job number one a free estimate and doesn't get the
job, he now goes to the next job, job number two and if they still don't
get job number two, the time that the contractor has now spent on these
jobs, plus other expenses like fuel, need to be factored into the
business expense category for the company.
If the contractor keeps giving estimates and doesn't receive a job,
until job number seven, there is a good chance that job number seven
will have to incur some of these expenses, in order for the contractors
to stay in business.
There really isn't anything free about the word free estimate in the
construction business. Eventually, someone will have to pay for these
expenses in order for the contractor to stay in business.