Am I getting ripped off?

[Ed_Corney]

So I'm just abt to sign a contract with a builder for a quite large double height rear extension and internal refurb of a property.
He has sent me the final quote with the cost separated into three buckets;

- Cost
- Overhead markup
- Profit markup

Both the overhead markup and and profit markup are at 15%, making a 30% overall market on the costs and giving him a 23% margin.

That seems a bit steep to me, I had thought 10-15% margin more normal. I should add we had drawings and engineers calcs done, which he working off.

cheers

 

[robinbanks]

First time I ever heard of a quote containing a direct statement of the markup. Sounds like someone gave you the "not for client eyes" print out. How does the quoted amount compare to the other two quotes you obtained?

 

[Higgy28]

It is unusual for a builder to send their you cost breakdown like that, but mine accidently sent me their internal spreadsheet for our loft conversion. From memory it had about 10% overheads (project management, QS, skip hire etc) and a 15% profit margin.

 

[Bod ...]

I'm a plumber I put 20% on materials. Seems thst he's being upfront and honest.

It's more about your gut feeling and research into how good is he.

Be carful there are many shiiiisters out there.

IS HE GOOD?

 

[freddiemercurystwin]

What matters is the final price and everything Bod mentioned, how the price is made up is of little concern (or business) of yours. If you'd received a quote with the same overal price yet a mark-up of 10-15% would you be happy?

 

[DiyNutJob]

The only comparison you can make is against other quotes. Makes no difference if his margin is 100%.

 

[Diver Fred]

I made a mistake when preparing an invoice for a part job - missed adding the VAT to the materials so adding 'my' miserly 10% still cost me money. I/You only do it once...

I'm not VAT registered as my turnover isn't enough to make it worthwhile.

 

[Justin Passing]

Costs are usually more than expected. Things are going up so it depends what contingency he has, where. If materials came out 10% higher would you expect him to "absorb" it?
Where does 23% come from?

 

[kp00110]

30% on top of the build costs, works out 23% of the total and final bill after

 

[kp00110]

I think everyone could say, that if they could, they would rather pay extra for peace of mind and almost certainty of a good job, than skimp and take a risk, so do your research

 

[Ed_Corney]

thanks for the replies. In answer to a few Qs. Yes it was sent via his wife in answer to a question abt what happens if and when materials increase, so I suspect they sent the wrong document. His price is there or thereabouts with others and I take the point on semantics of adding a higher or lower % to a build cost that I can't trace in order to get the right number for him.

Does feel a bit like daylight robbery that both overhead and profit mark ups appear to be at top end the scale which obvs means a lot more £notes for me if materials are rising 10% pa, bet I won't see it if timber etc continue to roll over....

 

[kp00110]

If you trust the guy and think he will do a good job, let him make a bit of money on it. You can squeeze him now and he will have a mind about the type of customer you are and he will only start to look to cut corners and costs from day 1. Its his mark up take or leave it. Atleast you know if he does mess up something he has some money in the pot he can use before he comes looking to you for extras he missed

 

[Bod ...]

thanks for the replies. In answer to a few Qs. Yes it was sent via his wife in answer to a question abt what happens if and when materials increase, so I suspect they sent the wrong document. His price is there or thereabouts with others and I take the point on semantics of adding a higher or lower % to a build cost that I can't trace in order to get the right number for him.

Does feel a bit like daylight robbery that both overhead and profit mark ups appear to be at top end the scale which obvs means a lot more £notes for me if materials are rising 10% pa, bet I won't see it if timber etc continue to roll over....

Let's say materials he supplied break down/faulty and need replacing.

Who foots the cost of replacing?

 

[robinbanks]

Does feel a bit like daylight robbery

Do it yourself then; that is, after all, what this site is intended for guiding you to do

And after you've done it and have got experience, you can set up in business yourself and make the same daylight robbery profit?

(This "tradesmen are ripoff merchants" trope is so wearying.. Have you really got this far in life by paying cost for everything? Do you really charge yourself out to your place of work at exactly what it costs you to live, month by month and if your boss offered you a pay rise you'd decline? If the surgeon said the operation to save your son"s life was £10k, for a few hours of his time with a scalpel, would you watch some YouTube videos and buy a Stanley knife?)

 

[blup]

So I'm just abt to sign a contract with a builder for a quite large double height rear extension and internal refurb of a property.
He has sent me the final quote with the cost separated into three buckets;

- Cost
- Overhead markup
- Profit markup

Both the overhead markup and and profit markup are at 15%, making a 30% overall market on the costs and giving him a 23% margin.

That seems a bit steep to me, I had thought 10-15% margin more normal. I should add we had drawings and engineers calcs done, which he working off.

cheers

Are you happy with the price, and more importantly the builder, if so go ahead.

Blup