Why You Should Charge Clients for Construction Estimates
If you're starting a relationship with potential clients by giving them a free estimate - or even worse, giving them that free estimate via email, you're permitting them to do two things to you:
Ghost you because they no longer need you
Shop that information around to your competitors for a lower price
Clients are conditioned to see contractors as a commodity. It's your job to change that perception and show them the value and expertise you bring to a residential construction project as a valued partner, not just an hourly rate handyman.
To do that, you need to shift your mindset away from thinking you must give free estimates and focus on explaining to clients why your time to create that estimate is a cost of work.
Having a paid-estimate policy as part of your upfront sales process can go a long way toward prioritizing your valuable time and removing frustration when qualifying clients.
The Problem with Free Estimates
The pressure to give free estimates is something that remodeling contractors and custom home builders like you feel daily. Homeowners believe that providing a free estimate is just the "cost of doing business" in the residential construction industry and that you should do it because your competitors do.
And builders, particularly small business owners, often think they need to perpetuate that belief to "get the job." But it's not about just getting the job; it's about getting the right jobs that will keep you profitable.
That means selling your value to a client and showing them that when you charge them for a project estimate, they are paying for the years of experience that enables you to provide them with a clear cost forecast and a better overall outcome.
And that's time you should be paid for.
What is Ghosting?
"Ghosting" is the practice of ending a relationship with someone by suddenly, and without explanation, withdrawing from all communication.
In the residential construction industry, this typically happens after a FREE estimate is sent to prospective clients, and they don't like the number they're hearing, or it's not within their desired budget.
Since the prospect didn't pay for that estimate, they don't connect the value to it - or you for all the work you've done to create it, and it becomes a commodity to them.
What Clients Are Really Doing When They Ghost You
If a prospective client is ghosting you, it means they've stopped replying to emails, texts, or calls and are spending their time showing your proposal to other residential construction companies to see if they can get a better price.
However, doing this won't get them an apples-to-apples comparison of the true cost of their remodeling project, which puts you both at a disadvantage.
Another remodeling contractor may only look at your total price and undercut it to sell the job, but sacrifice scope elements and quality, resulting in an inferior outcome for the client.
It's More Than Just an Estimate
As remodeling contractors and custom home builders, we know that an estimate isn't just a grocery receipt - it's much more than a list of items with a total at the bottom.
Preparing an estimate for a residential construction project involves hours of work that the client doesn't see:
Researching and planning
Having conversations with clients, design partners, trade partners, and vendors
Costing out materials and labor
Developing the full estimate and putting it all together for the client to review
Negotiating, amending, and re-presenting the final document
But when a homeowner gets all that for free, they treat it with the same value as a grocery receipt, not appreciating the full scope of work involved in creating that document because they didn't have to provide anything of value to get it.
Why You Need to Charge for Estimates
If you're not charging a client for their estimate, you're starting the relationship by giving away valuable work for free. And that sets a precedent for how clients will see the relationship throughout their remodeling project.
The client that gets a free estimate upfront becomes the client who asks, "While you're here, can you just do this…" midway through the build.
But if clients are conditioned to pay for your services at the onset, starting with that estimate, they aren't as likely to expect you to work for free at any other point along the way.
Charging potential clients for estimates allows you to develop a relationship with them and show the value and expertise you bring to the table rather than competing on price, which will hurt you in the long run. It's also harder for clients to ignore you once you deliver a paid estimate because they now have a vested interest in the information you provide.
3 Ways To Ensure You're Prospects Don't Ghost You
Estimating is a part of your sales process and is an effective sales tool if you use it properly. That includes educating your clients on why they want to hire a remodeling contractor who charges for estimates rather than choosing the lowest-priced bidder.
If you want to stop clients from disappearing faster than a ghost in Pac-man, use these three strategies in your residential construction business.
1. Always Present Estimates in Person
If you deliver an estimate via email and leave it to the clients to interpret, you're losing an opportunity to connect with them and build a relationship. Instead, they will simply judge it by the price instead of the cost drivers. You're also running the risk of them shopping that estimate around to a competitor for a "second opinion."
When you're sitting face-to-face with them, you have their full attention, and you can answer all their questions and respond to any objections immediately. It's also an opportunity to show them what they can expect in working together during the actual building and close-out phases of their renovation.
2. Strengthen Your Sales Process
A strong upfront sales process is your best tool for getting clients to understand how you operate and why they should want to work with you. It should convince clients that paying for a residential construction company that draws on years of experience to properly investigate and detail what their construction project should cost (and not just throw out a ballpark guess) means a better outcome overall.
Convince yourself of your value
It's taken you years to get the level of knowledge and experience you have when it comes to remodeling or custom building homes. There is immense value in those specialized skills that shouldn't be taken for granted. Doctors charge thousands of dollars for an expert diagnosis they can often make in minutes. So why give away your advice for free?
Explain your value to the client
Show them the benefits of working with a remodeling contractor who has done the proper due diligence and legwork to capture as many details as possible. Explain that your process ensures that the total cost you quote them is as close as possible to the actual price they will pay because you've taken the time to work through the project scope and anticipate potential issues before they happen. And remind them that you're not just building a house, but you're also building a relationship and that they want a contractor they feel comfortable with during the stressful parts of remodeling their home.
Know when to walk away
A reasonable client would agree that their time is valuable and that they don't want to work for free; neither should you. The right client will appreciate the effort and value your time accordingly. If they don't, they simply aren't your client, and it's time to thank them and move on.
3. Shift the Balance of Power
If you want to shift the balance of power in the sales process, you need to make it harder for clients to ignore you.
That means:
Understanding the value you bring to each client relationship
Explaining that value to clients in your sales process
Charging for your time and not giving away estimates for free
You deserve to be profitable and not be treated like a commodity. If you're having trouble connecting your value to what you charge, click below to learn more about the BUILD AND PROFIT SYSTEM, which provides you with a PROVEN framework to get paid for every single estimate you create.
I used this system for the last 4.5 years of my active construction business on every project - from small bathroom projects to large-scale additions, renovations, and complete custom home builds. It's not about the size of the project or of your market. It's about changing your belief systems about what you can - and should be charging clients for in your residential construction business.
