You know the guys that hang out in the Sam’s Club and that center aisle in Wal-Mart? The ones you avoid because you don’t need to change energy companies or cel phone service? These are nice people and I have a lot of respect for their drive; but most people just want to get in and out of a store quickly without being ambushed.
Professionals who offer a “Free Consultation,” “Free Estimate,” or even a “Complimentary Property Assessment” in your house have similar goals. They are salespeople with a mission of getting you to sign on with their services.
If you are not paying someone for their advice, you are inviting them over to give you a sales pitch.
Period.
You might get lucky. You could get particles of good info and advice but, if the person’s goal is to sell you, how do you know what to trust?
I learned this after starting my renovation company. In my design business, I had an hourly rate. I never went anywhere for free. Homeowners hire me to assess their aesthetic, their home and then offer suggestions for structural and decorative changes.
Then, I expanded into renovating homes.
None of my competition charged for their consultations. They were all “free.”
The problem with offering free estimates in renovating is that these estimates would take me hours to put together. In addition, I would give design advice during these consults. My detailed estimates would be based upon these consults.
Once I had a guy call me out on an addition. My site manager and I spent hours with him on our free estimate trip giving him advice. I went back to my office and spent hours putting together a budget.
He didn’t hire us.
Several years later, he called us back out. I noticed the addition had been done – exactly as we had suggested.
That’s ok. Maybe the other guy came in lower on his bid. But, now, he’s called us back out.
As Mark and I talked with him, he asked us a list of questions for the new project. I started to realize, this feels more like a design consult. The guy was taking notes. He was asking specific advice on structural changes and product choices.
We left and Mark and I both agreed that he was just using us for ideas. We suspected he would likely do it himself or hire cheap labor.
Good on him.
We’re the ones who weren’t charging.
I don’t offer free estimates or consults anymore. Now I charge for my experience and time. The only exception is for a repeat client or someone within a 2 mile radius of my house or office.
Here’s What I’ve Learned:
Free consults, estimates and house assessments aren’t good for homeowners either.
As soon as I started charging for these services, I noticed my cheesy car dealer inner self was tamed. My focus on calls with clients went from trying to win business to advising them without bias. It frees me from having to make up for time given away. Charging for my time allows me to be more objective in the advice that I give.
Homeowners, including myself at one time, always complain about contractors coming to their house and never giving a bid. One reason for this is because bids take a very long time. In Dallas, you could drive 45 minutes to a house; spend 2 hours with the client in the house; drive 45 minutes back to your office; and then spend a minimum of two hours putting together a bid. We specialize in full-house renovations. These bids can take days to put together. That’s half a week of lost time working for free.
In Real Estate, when we conduct listing appointments, it takes a couple of hours preparation to pull neighborhood comps, research transactions in the neighborhood over the last year and put together a presentation. Realtors don’t generally charge for this service. They hope to sell you at the presentation. Do you want to be sold? Or do you want non-bias advice on how and when to sell your house?
For small business owners with years of experience in a field, it’s not a good use of time. For homeowners who legitimately want objective advice on a renovation project or on selling their home, it is also not a good arrangement. If a contractor never returns a bid, it’s a waste of your time. If you want objective advice on your house, when to sell and how to price it, the salesperson trying to close a deal with you is not a good professional to ask. You would be better off paying a professional to assess your house and give you honest feedback and advice.
In my experience building a renovation business and now a real estate business, this is one of the biggest mis-steps made by these professionals. It cheapens the reputation of the professional and it doesn’t serve the homeowner well.
These industries are likely to change over the next ten years. That’s exciting because it will yield a better experience for homeowners.
Best of luck!
