Activity Feed › Discussion Forums › Business, Finance & Legal › The Goldilocks Price
The Goldilocks Price
Posted by firestix on January 20, 2022 at 8:56 pmSo I’ve been surveying on my on for about 5 years now. Not doing a large volume of business since I work a full time job and pick up small survey gigs on the weekends. Most of the jobs I’ve done have been lot surveys, family subdivisions, and existing conditions/topo for engineers. I’ve recently been asked to give a quote for a survey that would split 33 acres from a 133 acre parcel. This land was managed by Weyerhaeuser and has been recently cut over. The perspective client has told me that he can drive me to every existing corner of the property and I would only have to set one property corner. He assures me it is an “open and shut, easy, survey” (No such thing, I know). If I follow my regular fee schedule, it would place the cost of this survey to almost 10K. I know he doesn’t want to hear that. (he’s buying the entire 33 acres for 30K) I’ve never quoted a survey of this size.
Assuming that all things are clear and there is no line to cut, (again, has never happened to me) what’s the best way to bid this? I don’t want to scare this guy off, but I also am not in this for charity work! Ideas?-Chris
chris-bouffard replied 2 years, 2 months ago 34 Members · 55 Replies- 55 Replies
I would suggest time and materials and maybe throw in a “not to exceed” price?
Following…I’m curious what others have to say on this as well.
T. Nelson – SAM, LLCOff topic a little, but this reminded me of something that I saw in POB(?) QUITE a few years ago. They posed the question “What is the strangest excuse you’ve gotten to justify not getting paid by the client” (along those lines anyway). I only remember one response – “Three days to cut line! You coulda stuck that transit thing in a good tree and seen everything.”
I would recommend fixed price with fixed scope. Signed contract, with at least 25% retainer. If he decides to ask for more work, great–price goes up and he signs a contract amendment/work order.
Don’t let him price pressure you. As a contractor friend of mine says “I bid ’em happy-happy. Happy if I get ’em. Happy if I don’t.” I think that’s good advice.
I would caution against T&E with a not-to-exceed (NTE). Unless your NTE is really high, that only protects the client, and stands a real chance of screwing you.
Drive to the corner and there??ll be a giant pile of slash on top of it and maybe a giant deck of unmarketable logs in the way of getting to it. The other ways blocked by a tangle of huckleberry.
You aren??t getting paid depending on off it is easy or hard to get to the corners, you are getting paid to know what the monuments are and what to do with them
Assuming you need to survey most or all of the 133 acres to subdivide the 33 acres then your fee could be reasonable. Unfortunately the cost of a subdivision survey is often a large percentage of the purchase price of the property and some perspective clients are shocked, others don’t bat an eye. It is what it is. Good luck.
Gregg
- Posted by: @frozennorth
I would recommend fixed price with fixed scope. Signed contract, with at least 25% retainer. If he decides to ask for more work, great–price goes up and he signs a contract amendment/work order.
Don’t let him price pressure you. As a contractor friend of mine says “I bid ’em happy-happy. Happy if I get ’em. Happy if I don’t.” I think that’s good advice.
I would caution against T&E with a not-to-exceed (NTE). Unless your NTE is really high, that only protects the client, and stands a real chance of screwing you.
Agreed, T&M/not to exceed is really a lose/lose situation for you (but great for your client). Why is it going to be $10k? Do you have to topo the entire site or is the price high because of boundary and recording costs?
- Posted by: @frozennorth
I would caution against T&E with a not-to-exceed (NTE). Unless your NTE is really high, that only protects the client, and stands a real chance of screwing you.
Well Said.
N
OMG The odds of this being a wham-bam-thank-you-ma’am survey are slim to none. The PROSPECTIVE client is only thinking of his idea of field time and absolutely none of the other work items you must do. Do not let him fool you into a lower than great-for-you price. What he paid for the property is completely irrelevant. It could have been given to him, but what a surveyor needs to do is still the same expense.
We had a survey in a timber area along a river that had been hit with a tornado. Physically getting to any spot was next to impossible.
How many days will it take you to do this job for your prospective client? How much do you want to earn per day? How many extra days will it take if something goes wrong? That is the price I give him.
1. Linear feet of boundary says nothing about the difficulty of access, nor the existence/condition of monuments you will need to tie into, nor the bureaucratic fees that some must deal with.
2. Do not ever say things that might be interpreted as pr!ce f!x!ng between surveyors.
.I recommend you drive the site with the prospective client. Make sure to squeeze into your conversation, as he is pointing out where the corners are supposed to be located under a pile of tree tops or root balls, that you have to actually get a fixed location on the boundary evidence and make comparisons to the record documents and if they don’t match, more work will be required before you can certify the division of land. Give him a realistic estimate based on your observations during your site visit AND what you estimate the value of your survey to be. I think the phrase one of my mentors used was, “realistic and equitable”.
Will you be locating evidence of occupation along or near the property lines? How about family cemeteries or slave graves?
Just a couple of things you may want to consider.
Your client isn??t the owner of the property. My experience is that this makes the chances greater of something going wrong.
I’d like to take this opportunity to explain how I might handle a similar situation, so here goes.
First off I’m going to assume we all agree that there is a competitive air when quoting or pricing jobs. Too high and we don’t work. Too low and we go broke while the rest of the world calls us a low-baller.
I usually start my pricing based on the time required to complete the job. I am fortunate now to have an IDC (indefinite delivery contract) under which I provide services with a monetary return of about $2000 daily. If someone other than my IDC client wishes my services I estimate fees for their project along those lines. Why should I work for $1000 a day when I can gross $2000? At first glance that might appear as though I’m “losing” money, although that’s not entirely true.
My IDC contract is not truly full time although my business model is such where that contract alone keeps the ship afloat. But there is usually some free time. Having hired help sitting around waiting for the IDC client to call really does cost me money. If I can snag a job that will take 5 days for $7500 I will probably take it. Rather than look at it like I’m losing $2500 for that week, I see it as just a little more sugar on the bottom line that month.
What I’m trying to say is if you price yourself at rigidly fixed rates (for whatever reason) you might wind up with nothing to do because someone had a better price. I’ve completed jobs for under 10K and made plenty of profit even though everybody else was quoting 15K. It all depends on your workload. Being proud of rates sounds good at the beer joint but not having work sucks no matter your rates.
It’s a sharp edge we dance upon when trying to adequately estimate our fees. That’s where being a good surveyor but a better business man comes into play.
Every survey I’ve done in NC that began with the client telling me how easy it would be, ended poorly for me.
Price it for quality and responsiveness and explain that researching Weyerhaeuser land transactions may not be a cake walk.
The client appears to be telling you that he doesn’t care about quality, so maybe he’ll pay for responsiveness.
If I were to price this, I would: pull the subject deed and one or two prior as well as all abutters and look for plat references to get a decent feel for the research, hopefully it isn’t cardinal direction calls in poles; ignore the claims of easy access to corners; approximate the field and office time and multiply the time by its appropriate billing rate; then multiply this number by 1.25 and, voila, a number that still won’t earn profit when the “corners” turn out to be flagged trees near where the tax map lines converge on the GIS that is the sole basis of the client’s assurances of this being an easy survey.
If this parcel is south or east of Fayetteville, and the client price shops, you’d probably have to price it around $5K. It’s nothing short of a tragedy how low boundary surveys are priced in that area.
I’ve never priced a survey using linear feet.
I’m curious for those that do, is it just the perimeter of the subject parcel or do you include distances to tie to corners on the adjacent properties?
If a client signs $10,000 NTE contract then they have established that their value of the produce is worth $10,000, they just “hope” to get it for less. If their perceived value is $X, charge them $X.
Great model. When I was working my way through college in a furniture factory, the company had its own line of metal dinette suites, but it also did contract upholstery (seats and backs) for Montgomery Ward’s line of similar furniture. The contract work was very low margin, but it used up excess capacity and provided greater efficiency and lower manufacturing costs for the company’s principal line. It smoothed out some of the ups and downs that a small producer experiences.
Sounds like you’ve done something similar with surveying.
@csk21 I have seen it done both ways, some just the boundary of the tract being surveyed and others for all the ties that are needed. The surveyors that don’t charge for the additional ties say they don’t want to have to justify to the client all the ties that they thought were necessary.
Log in to reply.