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I don't have a problem (in this instance) iwith the per hourly basis. It is an old house, so who knew what would turn up?
They do or should...
Or at least they'll know where the hiccups and gotcha's are most likely to be.
A contract can be written with allowance for these without leaving it completely open ended.
eg "$1200 as described plus a $500 allowance for X and $300 for Y if needed; not to exceed such and such"
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What does one do when given a bill that seems so out of line with what was discussed?
You did not ask for an itemized list of materials prior to accepting the "estimate" nor did you tell the contractor that you would be providing all materials.
In my experience the majority of independant electricians that make a living doing minor residential work do not like to deal with retail terms for any supplies. It is very likely that the items required to do the job properly have a list price far higher than what you may see at the big orange box. I suspect that you are grossly underestimating the profit that is represented by the bill you were presented with.
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Originally Posted by renouvelle
It was only one electrician on the job, so 16 hours at $65/hour or $1040.
My husband was present the entire time and there were no weird problems that needed to be overcome with biblical amounts of materials.
I am probably overlooking the cost of small items like the cost of the connectors, but for the outlets, boxes, and wires, the total would seem to be about $250.
Is a 560% markup on materials customary for electricians?
"You did not ask for an itemized list of materials prior to accepting the "estimate" nor did you tell the contractor that you would be providing all materials.
In my experience the majority of independant electricians that make a living doing minor residential work do not like to deal with retail terms for any supplies. It is very likely that the items required to do the job properly have a list price far higher than what you may see at the big orange box. I suspect that you are grossly underestimating the profit that is represented by the bill you were presented with."
This response is why I asked the question. I bolded the line that is the most confusing to me. Why would contractors be paying more than retail?
Aren't contractors getting wholesale prices or at least a good discount?
Contractors generally have to go to the supply outlets that are able to consistently supply what is needed at a moment's notice or order in special stuff quickly. Those places have more overhead than a box store that orders a shipload of stuff from China and distributes it cross-country. Warehouse cost for the suppliers is high and turnover low. However - and this is the important point - those places are ABSOLUTELY IRREPLACEABLE to the electricians, and every electrician worth his salt funnels as much through them as possible. The quality of the goods they carry goes from about the same as a big box store to MUCH better designed and using MUCH better materials.
I was guesstimating a raw cost that was much higher than your guesses for cheap junk from a big box, and then a 100% markup on materials cost is not uncommon.
In the DC area, which demands a premium anyway, I don't see the invoices as out of the expected at all. You should have seen some of the bills my father had to put out in the 1960s putting stereos into high-end personal ski lodges.
Thank you, Chickpea, for explaining about how electricians source materials. I did not know that and it helps me to get the fuller picture that I was looking for.
the outlets, boxes, and wires, the total would seem to be about $250.
Is a 560% markup on materials customary for electricians?
Probably when they are working on a blank check agreement.
I often find that no one will work on our house except on an hourly basis. Our house is 175 years old and many of the tings that we need done are unique.
I do nto deal with electricians becasue I can do that work myself. However for other types of work, I usually buy the materials and I tell thm that the "smalls" (things like wire nuts, nails, and tape) are included in their hourly rate as are their tools. I also work out up front whether they will charge for time to drive to and from our house, or for shopping if somthing additional is needed. If I pay for shoping, then I only paay the actual cost of the materials. If I do not pay for shopping time, then I allow markup of 15% - 45% depending okn the item. (a small item gets more mark up because if they drive tot he store to get a $5 item and they only get 75 cents in mark up, they are getting ripped off. A large costly items gets lower mark up since they may be able to pick up a $1000 item in less than one hour and $150 is more than sufficient compensation for shopping.
If you have not already paid them, you can probably just pay them a fair amount and tell them to GTH. There is not much they cna do about a bill for $500. They can put a lien on your house, but they cannot afford to enforce it and it will become invalid with time. They might sue you in small claims court, but it is not really worth their time and besides, you might win. You could probably pay them $1800 to $2000 and just tell them that is all they get. (PROBABLY - it depends on your circumstances.).
I would not mess around with any contractor. There are some jurisdictions when it is a royal PITA to get any mechanics' liens cleared off a title and I have seen a number of relative simple refinances deals DIE becuase the lender did not want the hassle of the clouded title to mess the up.
If you want to set prices and expectations BEFORE work is done then any terms you and the contractor agree to are potentially "in bounds" but attempted to negotiate after the work is done is a VERY dangerous game...
Factory shut down due to machine stopping. Costing the business tons of money. They call a fellow in. He walks about, looks, feel, asks for a big hammer. He hits the machine. Machine starts running. All happy.
He sends a bill for $5,000.00. A "bean counter" asks the fellow for itemization. He replies: $5.00 for the hammer blow, $4,995.00 for knowing where to deliver the hammer blow.
That said, I always outline the work and agree with the price (like the # of outlets, square foot of whatever, etc.) before hand. If we agree, that is the price I pay no matter what issues encountered.
Recently asked an elecrician how much to install a light (I provided the light fixture). He looked at it and we agreed on a price. He ran into all kinds of trouble. I felt bad, but paid him what "we" had agreed.
Unless there is a statute that provides otherwise, if there is no agreement on the price of materials, a "reasonable price" will govern. The fact that you did not get a firm price up front does nto give them a free hand to charge you any maount that they want to. They have to support the cost of materials with invoices and show that the price was reasoanble (and that they are including any rebates, credits or incentives provided form the supply house. I learend that some specialty supply houses "charge" the contractor a price that is 25% above market and then give them a contractors discount or a loyalty rebate or something similar so that they buy the stuff at market, but they get an invoice allowing them to charge more for it. Then they put mark up on top of that.
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Like I said...
