Contractor Q - Charging by the hour?

sergeantcuffDecember 10, 2011

I've been trying to get quotes for a bathroom remodel (OT, a know). I found someone I like, who has worked on many projects with my plumber / neighbor (someone I trust). He came over and measured, and seemed very interested in the job, but never came back with an estimate. We've been exchanging emails, and I felt he was waiting for me to make ALL the decisions, even suggesting that I get a flooring quote myself.

Now that I have gathered all this info, he now writes:

"Sounds like you are getting nice things and taking the time to make good choices. For a project like this, where you are supplying just about everything, I would like to charge by the hour. It's hard to know when I'll be needed and with you doing the scheduling, I'm basically just on call as needed. I promise that I work just as hard whether it be an hourly rate or a contract. My rates are....". he then gives a reference.

I don't understand what he means. Who benefits from this sort of arrangement? Does it sound like this person even wants the job? I am not really knowledgeable enough to be the GC but I would consider it. Thanks for any input.


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Sounds sort of what I've been doing. The fellow doing my kitchen was also the one who did my bathroom. He gave me a quote of approx. What each would run. He makes a percentage and his people are paid by the hour. This is a man who has worked in my community for many decades and has done work for my friends and neighbors. So far this arrangement has been fair to both of us. He usually does more hands on gc and does more I think. However, my dh and I knew who we wanted to get cabs from, who we wanted to do the electrical, and we wanted to be in charge of picking our slab. I made some not serious mistakes that may have been avoided if he did more of the cg. Actually, thingink about it, maybe I have a messed up system. But so far it actually has worked.
I think you may be facing the same issue. If you can have him give you a fairly solid estimate and he has good references, it will probably by ok. The only problem may be, from his email I get the idea that while he will be working on your stuff he may also be working on other's stuff or looking for more work. That might mean that when you are ready for him he may not be available which will cause delays and be a major pain.
Good luck.

    Bookmark   December 10, 2011 at 11:57PM
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in our case, that wouldn't have worked. Our contractor quoted our job, not by the hour. we will get credits on materials that we choose, like we chose hardwood over berber carpet. But our guy works very slowly and very carefully and I think works like it's his own house - does a fantastic job but would never want to pay him by the hour! He just finished up a beautiful sunroom for us, cleaning up after himself every day. Friday when he was all finished and had touched up any paint, he brought in a cleaning lady to clean the room thoroughly top to bottom so there was not one speck of sawdust, etc. with windows sparkling - all included in his quote! We are very very pleased!!

    Bookmark   December 11, 2011 at 2:25AM
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Squigs, I want your contractor! We have someone who works just like that and does a very fine job, but he insists on charging by the hour. Because he is so meticulous and works so carefully, it always takes around twice as long as he estimated. So he's very expensive. We reserve him only for things that require high skill and perfection level.

We found another one (referral) whom we interviewed and it seems like he is very knowledgeable and skilled. When we called him, he said he charges $XX per hour, which we thought was a reasonable hourly rate. But then when he came to look at our work, he did sort of a bait and switch. On some things he quoted fixed prices which seemed high to us. So he wasn't really charging $XX an hour after all. DH was very miffed about this "mix and match" approach.

Maureen, can you ask your neighbor if this is how he works with her, and how it works out? Or even talk to the contractor himself. These guys understand that we are looking for a fair value.

    Bookmark   December 11, 2011 at 8:03AM
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The contractors I have been associated with mark up materials and labor of subcontractors such that this is part of how they are getting paid.

He may feel there isn't enough for him to mark up to cover himself so he is charging by the hour.

I note a bit of frustration on your part in that you would have liked him to GC the whole thing but he had you doing the running around and now is telling you since you did the running around you are essentially your own GC and he will be your carpenter at an hourly rate. not sure if this is an accurate assessment??

Personally, I have had it both ways - on a larger job we had a contract with allowances for this and that. On smaller jobs, we have paid for time and materials. I sort of like the time and materials route better at this point as I do like to get more involved than the average person in the choices of this and that.


    Bookmark   December 11, 2011 at 8:35AM
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Unless you have wonky plumbing, or your electric is really whacked, or it's a job where you know how long it should take? There isn't any reason they can't price a job.

My STBX was a GC. He wouldn't DREAM of charging by the hour.

You are REALLY setting yourself up for a screw job, IMHO.
What happens to the law where a contractor is only allowed to ask for 1/3 up front for materials, 1/3 upon beginning and the final 1/3 at completion? Huh?

What about the plumber under the house talking to his wife on the fone for an hour and 1/2. You gonna be there to make certain these hours are devoted to your work or trips back and forth to Lowe's? You paying for time on the property or all the running around to get stuff you supposedly forgot while he picks up his kids and grocery shops? How many months are you willing to pay for a 2 week job?

Keep shopping. You've stated you want a GC, not to GC your own job. That you don't feel knowledgeable enough. You'd be a fantastic client for a GC who knows what he/she is doing. You have input and design control, but the GC makes it happen and happen to code. He stated he has contract rates, but evidently doesn't want a contract with you. Keep shopping.

Everything I've lived for the last 18 years has me telling you to run and find someone else.

I feel pretty adamant about this, but I acknowledge there are those out there for whom this works.

I didn't like it, but I had to go hourly for my drywall and electric because what existed is so totally, effed up. I understood and knew this in advance. I am also home every minute they are there and could keep the electrician working while telling me a budzillion stories and talking on the phone to his wife. My drywall guy is almost deaf, so he doesn't spend much time doing anything but work.

I really would find someone else who would contract. You leave yourself open to never ending costs.

    Bookmark   December 11, 2011 at 9:24AM
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I'm with CEFreeman on this one. I can only imagine if we'd been billed hourly for our last job. We had guys who took smoke breaks every hour, guys running out to get something at the hardware store three blocks away and not returning for two hours...

I can see hourly billing for a small, defined job, like installing light fixtures or painting one room. For any larger project, I would strongly, strongly advise against it.

    Bookmark   December 11, 2011 at 9:43AM
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I feel exactly as Mamadadapaige suggested - I did all the research (which was fine as I like to be involved) thinking I was helping him get me an estimate and now he's saying "Just call me when you need me". This GC does most of the work himself with an occasional helper. He and my neighbor/plumber have worked on many projects together so I believe that he would be responsible and fair. I don't understand why he didn't give me an estimate of his costs. I will call and ask him.

My kitchen GC's workers worked by the hour and that worked out really well. But I was still given an estimate - One carpenter for x hours at $y per hour, one laborer .... I was given the exact cost of everything and then he tacked on a percentage at the end.

Unfortunately my kitchen GC does not do bathrooms. I was lucky to get him to do my kitchen as he specializes in historic restorations. My kitchen had lots of problems and so was a larger project, plus he lives nearby.

I only like to hire people I know or who come highly recommended by people I know. I do hate the feeling that I have to woo someone to get them to work for me. I am very easy-going, honest!

    Bookmark   December 11, 2011 at 10:59AM
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On a much smaller scale than you're talking about, we hired a guy by the hour to hang a the door that goes from the kitchen to the garage. This was just the door as the doorframe stayed in place. He was on task the entire time, but he was slow as molasses. It cost us $450 to hang the one door. It took all day. It's done beautifully, but $450? We're doing 5 interior doors this week, and we'll do them ourselves. There are advantages to having a set price.

    Bookmark   December 11, 2011 at 11:06AM
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Sophie Wheeler

Ask your kitchen GC for a referral. And also ask him wouldn't he like to get some experience with bathrooms so he could be more versatile. As long as you are financially ready for the 20-30% overage for unexpected water damage which seems a given with most older bathrooms, and the GC is willing to listen to you and search the net to make sure he is doing a proper waterproofing job, there is no reason why he couldn't tackle your bath unless he just flat out has had enough bad experiences with them that he is no longer willing to do baths.

    Bookmark   December 11, 2011 at 11:40AM
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IMO he should still be able to give you a quote. If it's a small job I can see why he's charging by the hour, but he should still be able to tell you how many hours it should take plus-or-minus some contingency.

We had a smaller bathroom done which was basically just changing out a vanity and doing a few other hardware and cosmetic changes, and we supplied everything. In that case the handyman said he would charge $x per hour and he thought it would take probably about 6 hours but if it took longer he'd charge the actual up to 50% over. That sounded great to us. Turned out he was a super hard worker and he did everything in 4 hours (!) and it was a great job, so we paid him for the original 6 hr estimate anyhow as it seemed a fair price for everything he did.

But in a larger remodel I'd be really uncomfortable going hourly. We're GC'ing our own kitchen remodel now, and each of the subs gave us bottom line quotes -- cabinet maker, countertop fabricator, electrician, tiler, gas fitter, and the contractor who's doing all the rest (ducting, plumbing, uninstall of existing cabs, drywalling, etc). I'd be really uncomfortable in this type of larger job if we didn't have bottom-line quotes from each sub-trade; it would just be impossible to budget for.

We're almost done and it's been working out great so far -- knock wood that it continues through completion next weekend.

One point is that your guy is right about scheduling. If you are doing scheduling of multiple people then the onus is really on you to religiously keep to the schedule you've committed to everyone. And you should have that schedule worked out some weeks in advance. Conversely, if you truly do expect him to be "basically just on call as needed" then he has a real point and the uncertainty probably makes him uncomfortable bottom-lining your job and he'd feel a lot safer going hourly.

For us, we scheduled each sub weeks in advance. e.g., main contractor doing tearout Nov 21-22, disposal bin rental arrives Nov 23, tiler doing tearout Nov 23-24, tiler doing floors Nov 25-27, contractor doing ducting, plumbing, drywall prep etc, week of Nov 28, disposal bin pickup dec 1, electrician prep week of Dec 5, cabs week of Dec 12, counter templating Dec 13, electrician cab lighting dec 15-16, counter install Dec 16, appliance install Dec 16-18, backsplash Dec 17, gas hookup Dec 18, We are aware that if we have one trade back up that it would affect everyone and we'd risk going into January in that case, so we are religiously sticking to our schedule and ensuring that we have everything ready to go for each trade as they come.

It might be for that reason that your guy is afraid to give you a bottom line? If so, can you ask him for a firm quote for x-y-z to be done on specific dates and times? With the understanding that if you do cause a delay then he can reschedule and possibly even requote if appropriate.

Good luck with your remodel!

    Bookmark   December 11, 2011 at 11:40AM
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75% of the jobs I work on are T&M.
The range of quality between ultra-custom and "get it ready for the next tenant" are quite different in design, materials, and craftsmanship. And in the finished product, which will either end up being more than the sum of its parts, or quite a bit less than.
We have several families we have worked for for more than 12 years; repeat customers are our best customers.
If they keep bringing us back for more and more projects, I guess we have satisfied them, which is a higher priority to them than the bottom line.
To quote one very good customer "You guys are expensive, but you're the only ones that have made K___ (wife) happy, so keep it up!"

    Bookmark   December 11, 2011 at 12:55PM
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Which says they've tried other contractors....
I'm not being sarcastic, but am really just asking why they would? What did they try without you?

I'd also ask the kitchen GC for a bath recommendation.

Frankly, I'd love to find someone I could work with who wouldn't charge me an arm and a leg. I also need some design help getting what's in my head onto paper and onto my house.

But I don't want to fuss with scheduling, materials, (now that I've used almost all I have) etc. I'd be happy to pay for the job. But that's all fantasy land for me. [LOL]

    Bookmark   December 11, 2011 at 1:25PM
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suzanne, you must have had the same carpenter we had for your door. Ours put in two doors and the bill was almost $900.

    Bookmark   December 11, 2011 at 3:15PM
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As a follow up - is there a rule of thumb as to about how much a contractor's profit is? For example, the GC that is at the top of our list has given us line item costs for all the pieces (cabinets, windows, etc.) and then the line item for him is about 15-16% of the total cost. Is that reasonable (I suppose it's probably regional)? Also, at this point, I feel somewhat like taggie. I have priced out all the windows (because I am picky), cabinets, radiant heating and floors and esp for the cabinets, I have someone specifically that I want to use. Any thoughts for how to work with a GC to reduce his price? I don't quite feel like I am up to becoming the GC because this will involve adding square footage to the house and actually moving the location of the kitchen.

Thoughts? Thanks in advance!

    Bookmark   December 11, 2011 at 6:39PM
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I appreciate all the input. I will call him tomorrow and ask him what the deal is - is he truly interested, will this benefit us both, will he coordinate with the plumber/heating neighbor, etc? I would not go forward unless he would give me some idea of what hours he expects to work.

I know that the flooring (linoleum) will be very near the end. The only other subcontractor will be a tiler to do the walls of the shower. When???

The kitchen GC would not be interested in a small project. I am lucky he did the kitchen. I think he has reached a point in his career that he only does what he loves - whole house restorations.

Laurat88 - My kitchen GC charged 25%. I've been told that was high, even for this area (MD) but we were OK with it. We trusted one another. He didn't care what I purchased, really undercharged me for the time spent. His employee spent 8 hours wrestling with sheet metal to make a vent for my oven but i don't think I was charged for that day at all! I made a final punch list which he didn't expect but seemed pleased that he could scratch off this project in a few hours and wasn't bothered again.

    Bookmark   December 11, 2011 at 7:04PM
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The line for my GC in the overall project cost is about 10% of the total. Without more information, I don't think 15% is unreasonable.

About working with a GC to lower his/her portion:
One thing to keep in mind is that the GC's rate might have to include his/her overhead expenses like liability insurance, worker's comp (if the GC has full-time workers like carpenters, administrative assistant), office overhead, etc. Of course, the overhead is spread over all of the client work the GC has for the year, but if he/she has person-power to take on 3 or 4 large jobs a year, then the overhead has to be spread over those 4 jobs. Otherwise, the GC cannot cover his/her fixed expenses and will go out of business quickly.


    Bookmark   December 11, 2011 at 9:47PM
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sombreuil_mongrel, are you my GC, because I imagine that's exactly what he would say. This is the first time that I wish we'd had a contract instead of time and money, but really that's because all the bad luck we DIDN'T have on the previous remodels came to roost on this one. It's really hard to pay t/m when it's not in your favor that's for sure, but I'd hate someone to lose a ton of $$ because of what may be lurking behind the lath and plaster. I'm a bit of a softy, DH might say soft in the head :-) I think the most important item here is the reputation and trustworthiness of the GC.

    Bookmark   December 11, 2011 at 10:22PM
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Circus Peanut

Maureen, it sounds like he's speaking more as a tradesman than as a GC, is this correct? Is he a carpenter only?

This is the kind of thing I'd expect someone to say who is only expecting to be involved with one aspect of the entire job. I'd check back and see whether he knows you're proposing that he be the actual GC of this project rather than just the wall builder (or whatever).

    Bookmark   December 11, 2011 at 10:36PM
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He will be the one to benefits from this kind of arrangement. Is he, license. Maybe he, wants to do it by the hour with out a contract because he can only charge so much with out a license. And does not want a signed contract should something go wrong.Have a signed contract, so you do not have to worry that he, is taking advantage of you.

    Bookmark   December 11, 2011 at 11:59PM
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bigdoglover - where are you? we are basically in the south central PA area.

    Bookmark   December 12, 2011 at 12:45AM
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squigs, i would love your contractor info, I am near Baltimore. Can you send me a private email on "My Page" by my name. thanks!

    Bookmark   December 12, 2011 at 11:04AM
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sure scrappy - will do! (although I actually should have said more like southeastern pa - reading-morgantown area)

    Bookmark   December 20, 2011 at 9:54PM
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I charge T/M because it is really the only fair way, if you are an honest contractor. I always have more jobs lined up, so I want to finish the job I'm on to get to the next one.
If I had to bid, I would have to pad the bid to cover unforseen issues and more often than not the homeowner will want to make changes but not want to pay for the changes, even if it is in the contract.
T/M keeps bad feelings to a minimum, at least in my dealings, and I've never had any complaints. Clients feel they are getting their moneys worth, while with a bid job, they feel like the contractor is making a killing. Many times he is. T/M is more transparent.

    Bookmark   December 21, 2011 at 3:36AM
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I have hired contractors who have priced by the hour on two occasions. I have also hired contractors that gave me a lump sum quote. I would definitely recommend getting lump sum quotes. With the two hourly-rate contractors, I was surprised in both situations at the final amount. Each contractor gave an hourly rate and then an estimate as to how long the project would take to complete. Each project took longer than they anticipated (without me adding extra work) and I was then surprised by the final amount. One was over 1/3 higher than expected. (Both contractors had been highly recommended.) I much prefer getting a lump sum quote. This way I know ahead of time how much it will cost and if I don't like the amount, I can keep looking for another contractor. There are no questions about whether he really put in that time or whether he worked slower than usual. If I add work, I fully expect him to charge more, but I get a quote for the added work and then can decide if I want to go forward with it. It is much easier to budget a project this way.

I have also had experience GCing my own project. Is this something you indicated to him that you might want to do? It almost sounds like he is just assuming you want to GC it. GCing your own project is not that easy. There are advantages to it, but there are drawbacks as well. If a problem arises with a subcontractor, it is completely your headache. It is more difficult to schedule the subcontractors and keep the project moving quickly. Also, if something goes wrong, everyone points the finger at everyone else and there is no one person to take responsibility. In my opinion, if you weren't planning to GC the project, don't let him pigeonhole you into it.

Just another thing, I realize you trust your neighbor/plumber, but I would just be a little cautious since he/she is a fellow contractor. If you have the opportunity, it would be a good idea to look at some actual work the recommended contractor has done, so you can check out the quality of the work for yourself. Also, does the contractor your neighbor is recommending actually use your neighbor as their plumber/subcontractor? Would your neighbor then be working on your project? If you are not happy with your neighbor's work, you still have to live next to them. Just something to think about. Hope this helps.

    Bookmark   December 21, 2011 at 9:36AM
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