Residential Pricing 4

I've gotten out of residential assessments as much as possible, but when I do them I charge hourly with a $600 minimum.

Houses I price like a commercial project. Estimated construction cost × 6% × 12-15%. Additional multipliers for complex arrangements, oceanfront, and PIA architect or contractor. (PIA Architect is rare since I usually just refuse to work with them. ) High end custom homes in the area are between $300 and $350 per square foot. So that's about $2-$2.30 per square foot with a floor of about $6,000.

I've always done estimated time spent for my pricing; trying to figure out construction costs ahead of time seem like an impossible task, so props to you for that. Especially residential where $300 sqft is probably the floor these days with some of the top end houses around here $700+.

For a new, medium to large house with average complexity, I charge roughly what phamENG does, about $2 per square foot. Adjustments are made based on complexity, the client, and the architect. I'll usually just say no to known bad clients and architects, although sometimes I'll double the fee. If the client also wants to be the architect and it's clear they don't have any experience with that, same thing. I'll either say no or double the fee.

For design work, I generally don't base anything on hours or hourly rates. I figure it's a meaningless metric most of the time because at the end of the day, we can only charge whatever the market will accept based on supply and demand. If I look at a garage and figure it will take me 30 hours to design at $150 and hour = $4,500, but the most anybody will pay in the surrounding area for a garage design is $300, well I guess that's all I can charge. On the other hand, if the going rate is $6,000, I'd rather charge that than the $4,500. Knowing the number of hours a job will take is still obviously useful in terms of estimating the project timeline and assessing overall productivity, but I don't like to use if for pricing.

Yes the local going rate is obviously most important, but that info takes longer to acquire. I've only been doing my own thing for a year so I try to ask architects and contractors what people charge around here as much as I can.

I use the hourly rate to make sure I'm in the ballpark and not going to get killed on a job. For the big houses, that's the worst $/hour rate generally since they always take a lot of time. But if I can get more $/hr spent on another job because that's the market rate, sign me up for sure.

$2 per sq foot is a pretty common number I've heard from other people and that's about what I like to shoot for as well.

400$ to do a site visit, if within 30min drive. Any additional time is 200/hr. I Always include a report. I always quote lump sum.

For houses its what the market can bear. Generally 2K-3K for 2500sf-4000sf. I try not to provide much drafting, if adding drawings, usually tack on 500-750$ for each drawing I think I need.

Its really hard to gauge. Some jobs do fine with, some I loose out on because Im priced too high, even when I think I am low.

Another point: my client is the architect. There are a couple of contractors that I work with, but never homeowners and no new contractors unless they've built a few of my designs and a relationship has developed. I get along better with architects, I guess. They're also more understanding of the schedules, timelines, and workloads we have to deal with.

I also try to be careful about clients that try to pull paid-if-paid nonsense on me. Their fees go up a lot.

The residential market is fraught with folks that have day jobs, and do this type of work on the side, and don't have expenses like rent, health insurance, etc.

phameng said:

I also try to be careful about clients that try to pull paid-if-paid nonsense on me.

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My standard response to that is "I'm sorry, but engineers don't work on spec. You might eventually find someone, but it won't be us."

jerseyshore said:

As I said in the other thread I'm usually $500 minimum for a site visit, $700-$900 total for a SV + report/simple drawing.

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I use an iPad app called FastFields to generate my reports (it emails me an MS Word document) before I leave the property. It gets me to 95% completion. When I get back to the office, I hit submit, open the word document, and spend maybe 20 minutes refining it and doing a sketch. Also helps having a library of ready-to-modify sketches, product cut sheets, and repair procedures. I track an Effective Rate from time spent on hard-number assessments, and with my tools, I'm right around $180-$220.

I don't see your numbers being too high. Clients tell me all the time "We had another engineer quote us $2,000 just for looking at this." I think there are firms out there that - when busy - will throw a tall number out there and see if they bite. I know one guy that needed a bore log - just a bore log, not a full report - and the geotech firm charged him $9,000 for it.

FastFields look pretty impressive. What does your deliverable look like? I'm used to seeing letter-form reports, but it seems like this one might be more of an automated home inspection style with a free form opinion/conclusion section that you add on in the office?

$900 for a site visit that is not very far. Comes with a stamped short report or sketch.

New large multimillion dollar homes in the mountain are 15K+
Typical new houses are $7k+
Small addition are usually $3k+

I do my own drafting.

My prices are identical to DoubleStud less about 10% on drawings due to high competition in my area. I also do my own drafting.

The letter-form reports I do are a terrible time sink and I need to move away from them or up my prices. StructPathologist is the 2nd engineer/firm I've heard of that have a standard inspection form as a deliverable. I am desperate to get my hands on one of these standard inspection forms because 1) apparently this works quite well and residential clients really appreciate their low cost and apparent effectiveness and 2) I cannot figure out how I could possibly standardize residential inspection deliverables into a single boilerplate form when their purpose and scope varies so significantly. Obviously it works so well you're charging pennies on the dollar compared to others, but I have no idea what it would look like.

phamENG said:

Houses I price like a commercial project. Estimated construction cost × 6% × 12-15%. Additional multipliers for complex arrangements, oceanfront, and PIA architect or contractor. (PIA Architect is rare since I usually just refuse to work with them. ) High end custom homes in the area are between $300 and $350 per square foot. So that's about $2-$2.30 per square foot with a floor of about $6,000.

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How do you figure out the sq. ft? For example, 1 story house with crawlspace vs 1 story house with slab on grade. How about exterior space around the house with roof over it?

RPGs said:

but I have no idea what it would look like.

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I was trying to imagine this, too. It seems you'd either need different forms for different complaints, or one generic one.

The generic one might have a project and inspection information section with address, time, date, weather, inspector, etc., and then an 'observations' section which is just a series of photographs with captions you enter in the field. Then, there's an 'opinion' section that you fill out at your desk. Just a couple quick paragraphs, if that much, tying the various photos to what you think is going on. Then a 'recommendations' section. This would rely on what StrucPatholgst was referring to with the standard details, repair procedures, and cut sheets. Just drop them in and produce the report.

DoubleStud said:

How do you figure out the sq. ft? For example, 1 story house with crawlspace vs 1 story house with slab on grade. How about exterior space around the house with roof over it?

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Depends on the house. I'll sometimes bump up the price by a few hours worth of time to account for framing layout in a crawlspace, but for a simple layout I don't usually differentiate. The slab layout can be as much work sometimes, especially if the architect wants to get cute with some sort of innovative insulation scheme. People are moving away from crawl spaces in this area since nobody maintains them and they turn into giant, house sized petri dishes.

Indoor vs outdoor - again, depends, but I usually don't make the distinction. To properly design a large screen porch roof hanging 20' off the back of the house usually takes more engineering than twice as much interior space, but doesn't cost quite as much to build. It usually averages out.

Fee writing an imprecise science, to be sure, but this is the most expedient way I've found. Otherwise, I spend 2 hours wringing my hands wondering if I've charged enough, or too little, or too much, or why am I doing this it all I should have just stayed at the old firm...ahhhh!!! Okay...maybe not so dramatic...but the less I have to think about it the better off I am.

Ok so you count the outdoor space with roof as sq. ft.?

DoubleStud said:

Ok so you count the outdoor space with roof as sq. ft.?

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Yes. I used to discount it - one price for conditioned space, one price for garage, one price for unconditioned living, etc. But it was a mess, and I was growing more precise while losing accuracy. So I decided to just total up square footage that has either a structural floor under it or a roof over it.

jerseyshore: if you don't know what the going rate is for residential work in your area, then I suppose coming up with an estimate based on your hours is the best you can do for the time being. Or perhaps use some percentage of construction cost (if you can estimate that). Long term, though, if you can get enough potential work, you should be able to get a decent idea of what a client will pay based on what you're charging and whether or not you get the job. If you get every job you bid on, then you're probably too cheap. If the opposite, then you're too expensive. There is obviously a range too, where there are probably some really negligent engineers doing stuff for very little and some great engineers on the higher end. The only problem with the high end, though, is that it takes a really sophisticated client to even notice the difference between a good and a bad engineer. In that case, the client would probably have to be an architect or developer with repeat work.

DoubleStud: In terms of what to use for square footage when using that to establish a fee, I'll typically count any floor surface towards the square footage, except that for a full basement, I'll maybe use half the basement area, and for a crawl space maybe even less. Per your example, for a "1 story house with crawlspace vs 1 story house with slab on grade", I would use the 1st floor square footage for the slab on grade option and somewhere in the range of 1 to 1.5 that for the crawl space option. For "exterior space around the house with roof over it", I'd include that area in the overall square footage. The method isn't perfect but gives some idea of where to start. I'll use this in conjunction with looking at past fees for similar projects (if that data exists).

I appreciate everyone sharing, I really do. Even though most of us are in different markets, it helps to make sure we are not all getting killed on jobs.

I've only been pricing out jobs for a year now and most of them $2k or less so those are much easier to figure out.

Ideally I get more commercial work as time goes on because I don't want to be stuck doing only residential (although easier to get when starting out). But hey, if there's a market for it and no one else wants to do it, I'll fill that void.

Pricing jobs in a square footage basis is something I'd really like to get better at as well so great info above. Around here most new projects are on piles so that framing is certainly something I don't want to discount too much. I like the idea of 1.5x multiplier for lesser involved floors.

For those wondering, my reports are MS Word engineering reports with a cover letter, intro, weather, short bullet point list of things we looked at, then a section for each component (substructure, framing, grading, decks, ancillary structures, private bridges, etc.). In each section, there are observations, photos, and recommendations. Then I have closing statements. Typically the final product is 9-14 pages with everything, but I also have a short form report for certain situations where I'm only looking at one thing. FastFields lets me pound 95% of that out while I'm still at the property, inserts the photos where they are supposed to go, etc., all by selecting buttons in the app. I also use it for PCAs and Phase I's, which is a massive time saver. The big caveat is that you have to program FastFields yourself, unless you hire someone to do it for you. Couple summers ago I paid one of my college age kids by the hour, and taught her how to set it up and populate it. There are other apps out there like this, but I think FastFields is the only one that delivers the output in MS Word, complete with headers, logos, footers, table of contents, etc. I wish they'd have an option where you could append the report with appendices that have pre-defined repair procedures or product pdfs, but that's easy enough to do.