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
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.