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Question DetailsAsked on 1/4/2018

Is that too much for labor?

I supply the materials and the contractor said he would charge his labor the price of materials. So if materials cost me $2000. then his labor is $2000. or materials cost $1500. then his labor $1500.. That does not sound right to me. The house is just a little under 1000 sq ft. I want to put a metal roof on.

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3 Answers

0
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Sounds fishy to me. Some contractors doing basically one type of work do bid based on labor being a certain percentage of the total work, hopefully based on experience, to avoid the time involved in doing detailed estimates for each job - and figuring labor at say 50% of total job cost sounds to be in the normal range for reroofing - though I would say typically more like 2/3 labor for asphalt shingle roofs, and 1/3 to maybe half for metal roofs.


But figuring his labor as a percentage of materials cost means, while his labor is going to be basically a fixed number regardless of quality of roofing (higher end roofing does not add much to labor time), the more high-end you go with roofing, and the more materials incidentals are required, the more money he makes. That gives him incentive to low-ball any preliminary materials estimate numbers he gives you, knowing they will go up - and incidentals like screws and tiedown clips and battens and flashing and such will crank the cost up. Ditto to going with higher-end water barrier and ice and water shield,, which while maybe a good idea gives him more labor compensation for zero additional work.


And of course he has an incentive to upsell you on more expensive roofing materials, plus if you get any extended manufacturer warranty that would likely be considered part of "materials" so he would get maybe around $500-1000 more for zero additional work except maybe filling out a manufacturer's installation certification. Plus to get an extended warranty commonly costs $500-1000 more for your size roof because you have to get all materials from the roofing manufacturer.


The fact you are tossing out $1500 and $2000 numbers foir materials on a 1000SF roof is a real red flag to me - I would be expecting more like $3-5 minimum for metal roofing, and more commonly $5-7/SF for the materials for normal metal roofing, so while normal metal roof labor might be around $3-5/SF his labor charges could be $3-7/SF with this scheme. The numbers you are throwing around are more typical for asphalt composition shingles - commonly about half the cost of a durable (more than tinfoil thickness) metal roof.


This sort of off-the-cuff pricing scares me - I would at least get several firm bids from competitors, and check this guy's ratings and reviews in Search the List to see what he reads like.


Certainly, if you go with this arrangement, you need to make sure the contract ties down his labor charges, whether it includes him picking up the materials or not, whether tearoff dumpster or added-cost warranty is considered "materials", etc. Because this sounds like an opportunity for him to make this a pretty open-ended job. I may be misjudging him and he is totally above board - but I would throw at least a yellow warning flag on this one.

Answered 10 months ago by LCD

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Votes

sold jobs usually break down to .33 x3 1/3 labor, 1/3 materials, 1/3 mark up

Answered 10 months ago by the new window man

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Good point by newwindowman - he properly called out that overhead/profit charges have to be added to raw materials, subcontract, and labor costs. Normally done as a markup (maybe called out on invoice, maybe just embedded in marked-up materials costs, generally as a percentage markup on subcontractor charges, normally embedded as a mark up percentage on labor charges - which become the "billout rate" or "billing rate" or sometimes "loaded labor charge".


When I said 1/2 and 1/2 split between materials and labor was a fairly common range for normal construction jobs (not unuusual or high-end materials nor highly labor intensive work), I was talking "loaded" pricing - including overheads and profit - also called "markup" by some contractors. That is the other way many contractors show their billings. Either way, somehow all the costs of doing business plus reasonable compensation/profit to the owner(s) has to end up in the price or he will go bankrupt - and those "indirect" costs typically run 30-70% for a physical construction contractor, generally being larger for larger firms than for 1-3 man outfits or one who use a lot of by-the-job employees. "Indirect costs" for Professional services like Architect/Engineer and similar services commonly run more like 70-150% because they are heavily loaded with professional labor costs (with assoicated overheads on that) and generally a much higher percentage of personnel who are not direct-billed to the job, have higher advertising/ marketing/ proposal preparation costs, and the owners/managers are generally (at least for larger firms) not direct-billed to projects so their compensation and associated overhead become part of their overhead costs.


Other contractors use the term "markup" only for what they add to direct materials and subcontractor costs (which may be at different percentages) to cover their handling/ billing pass through and carrying costs for those charges. They then call the "overhead" (which includes the basic costs of being in business - shop/office rent and maintenance, vehicle costs, tools and equipment, stock and jobsite theft, insurance, office staff and runners not directly billed out on jobs, owner compensation if owner does not perdominately do hands-on work as they normally do in a very small firm, employee benefits, employer share of employee taxes and unemployment and state disability coverage and such, capital cost and financing) such terms like "overhead", "burden", "carrying costs", etc. Some include profit in that term, some do not, though most include it as part of such on the invoice unless the contract calls it out as a separate number, because people do not like seeing a normal 5-20% profit showing up separately, especially when it is a large number like on a new build project.


Either way, the contractor needs to be compensated for all his direct (materials purchase, subcontractor charges, direct wages) and indirect costs and a reasonable profit, regardless of how it is phrased. But it is important, especially so on "open-end" jobs like cost-plus or time-and-materials reimbursement jobs (which should be avoided where possible, at least for more than very short-term repair work), to be sure the contract or quote sheet spells out thing like markups and overheads, and profit if not specified as included in markups and overheads, so you do not see a surprise. I have heard of projects, including new builds, where a large magic number appeared on only the final bill for overhead and/or profit, which the buyer had assumed was included in the charges on interim/progress billings. A 10-20% profit charge on top of a $300,000 new home build contract can be quite a shock, and of course way to late in the job to be talking that sort of unexpected charge - so the contract should spell out how billing is done, and that the charges billed include ALL contractor costs including direct and indirect and subcontractor costs and all profit and other costs or fees.


(Important to make clear if building, land use, and other permits and any taxes related to construction are included in indirect costs or are charged as a direct cost (and with or without markup) - especially in locales where the building permit charge is based on a percentage of construction costs (which in some areas also includes the land if a new build). That also can be a shocker - a 5% building permit fee can put a real dent in a budget, and I have seen numbers higher than that for permits and fees in some east coast and largest west coast cities - in a few cases well over 15% including local government charges for "impact" fees, though those usually apply only to subdivision development and commercial construction - but I have seen it on residential jobs, especially in planned communities and ones under the control of a strong homeowner's or condo association and also on some native reservations, any of which may also charge impact or development "fees" or "development evaluation charges" (translated rakeoff in many cases).


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One thing I did not mention - with a metal roof, expect more gutter accumultion of debris because light winds tend to move leaves down the roof to the gutter rather than "holding onto" them until a high wind comes along, which commonly blows many of them clear of the roof and gutter. Also, be sure to include any thaw wires or diversion structures needed to protect doorways (including garage doors if you don't want big berms in front of garage door after a goode snowfall). I emphatically recommend against snow fences / snow guards, because that just keeps the snow on the roof - adding undesireable load in some cases in high snowfall country, and promoting ice damming which can lead to a leaking roof. Handling the snow avalanching and edge icicling issue is commonly a portion (along with much higher materials cost) of the typically 50-100% higher cost of metal roofing over normal asphalt shingles.


Also - do a bit of reading up - online or in the Home > Roofing link under Browse Projects, at lower left - on the issues of metal roofing thickness (some of the products out there are VERY thin and weak), types of seams and relative watertightness, the importance of long-life gasketed fasteners so the fastener holes do not become leak points, and the appearance and job quality issues associated with "roofing-over" an existing roof with metal panels without removing the existing roof and putting down new water barriers (and replacing any damaged sheathing) first. All of these factors can affect your roof appearance and longevity - and cost.

Answered 10 months ago by LCD




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