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How to Negotiate With Contractors Before and During a Home Improvement Project: 12 Tips

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Some home improvement projects are just too big for the average homeowner to take on him or herself. Case in point, when a 100+ year old Silver Maple falls across the entire width of your street.

Like many first generation college grads, I come from a long line of blue collar workers (though I don’t like the “blue color” phrase as, in my experience, many old world “blue collar workers” are as capable and technical as the average college grad here in the US).  My father, for example, was trained as an electrician, but has a skill set ranging from plumbing and carpentry to landscaping and roofing.  Both of my father’s brothers are also skilled craftsmen and their expertise include metal working/welding and carpentry.  If I extend my family connections further, the list grows to include professional landscapers, blacktop and cement experts, general contractors, finish carpenters and framers, masons, commercial and residential plumbers, etc.

My hands on skill set, however, is limited.  I can count my home improvement skills on a single hand (and I include painting and mowing the lawn high on the list; not very impressive tasks).  In turn, I often work with my father on running most of the home improvement projects on our 90+ year old home.  And while I’ve picked up the occasional hands on skill from my father, I’ve learned to love and master the second most important home ownership skill set; namely, negotiating with contractors.

Even with a large family-based home improvement network it’s often necessary to contract out large jobs given a special skill set, piece of equipment, or simple lack of time to get the project done yourself.  A necessary home improvement project you may need to outsource to an expert may include pouring a new cement sidewalk, laying a new asphalt driveway, installing a new roof, sanding and installing new hardwood floors, tiling a bathroom, or removing a large tree from your local street (see above).

When it comes to outsourcing a home improvement project and , in turn, negotiating with contractors and tradesmen here are 12 home grown tips keep in mind.  By utilizing the tips below you’ll be certain to get the best price and highest quality tradesmen to work on your project:

1. Avoid amateurs and new businesses. Young and inexperienced individuals and businesses often charge less for a given service and while you may save a few bucks on that new exterior paint job or new furnace for example, you’ll end up paying more over the life of the service or item installed.  Hire a bunch of college students to paint your home, for example, and they’ll often skimp on the preparation side of exterior painting which includes finely sanding the given surface.  And if you paint on a surface not prepared correctly, you’ll need to paint again the following year.

2. Get at least three bids or estimates.  If you don’t have at least three estimates for a home improvement project you’ll have no basis to compare what a job should cost.  Moreover, when you talk to as many specialists as possible you’ll begin to learn what it’s going to take to build a new deck or put in a new roof (and with knowledge comes the ability to negotiate).

3. Avoid hiring a general contractor most of time.  Most general contractors are not hands on and as a homeowner you’ll basically be paying a single individual to act as a glorified coordinator.  You can skip the GC mark up and contact the individual tradesmen directly.  Yes, you’ll need to spend some time researching who you need to call to get a particular home renovation project completed, but you’ll save big by bypassing a general contractor.  I’ve often been told by general contractors when I push them on pricing that, “hey, I have to make some money here, Vince”  My reply, “go and find someone else to make money on I’m not going to need your services!”

4. Avoid using “experts” or installers from big box stores like Home Depot and Lowes.  It may seem convenient to hire the local carpet or window installers from Home Depot but there are plenty of horror stories I’ve heard and the expertise level is often very low with the aforementioned crews.

5. Ask folks in your neighborhood for recommendations on the top carpenters, plumbers, and electricians in your area.  If you’re lucky enough to have a mom and pop hardware store in your town then ask the owner for tips on good tradesmen in the area.  And don’t forget to check out completed jobs in your neighborhood (your standard for what constitutes good work may be higher than the 80 year old Mrs. Smith down the block).  Also, don’t forget to check local online message boards and visit the Better Business Bearru web site.

6. Negotiate fiercely and make it a point to tell the contractor you’re not desperate to get the project done and you’re looking for the best price and a quality job.   If you know you need a new roof then don’t wait until you have water coming in from your second floor ceiling to get bids and select a roofer.  If you know someone more knowledgeable than yourself then have them at your house when meeting a contractor to get an estimate.  And as I said earlier, prepare yourself with a bit of research so that you can talk specifics about the job you are looking to get done.  If you get a strange vibe or a bid comes in too high or too low then tell the contractor to take a hike (remember this is a business transaction and you’re not looking to become best of friends).

7. When getting down to an estimate let the contractor give you a bid without much in the way of negotiations (you don’t want to reveal too much about what you’re willing to pay); at this point, you want to get a baseline price on what s/he is charging for the given service/work.  Get the estimate in writing and move on to the next scheduled estimate or contractor.  After going through several estimates and work samples, you’ll have a sense for who you’d like to use.  Have the contractor come over again (don’t negotiate on the phone) and tell him you’d like to move forward but that his quote is beyond what you expected and can afford.  Usually the contractor will reduce his estimate by about 10 percent.  State that it’s still too high and that you’ve received 3-4 other estimates for similar work.  The contractor will probably come down again.  Next, tell him you’ll pay for the entire project in cash and also do any of the prep work or demo work necessary (if you don’t have cash to get the work done, you may want to think twice about being a home owner and maintaining a home).  The contractor should come down again.  Finally, tell him you’re willing to recommend his service to friends and family.  His final estimate should be between 15%-30% lower than his first quote (depending on the size of the job, how much of the prep/demo work you’re willing to do yourself, and your geographic region).  This particular tip has caused quite a bit of response in the comment section from general contractors who disagree with my tactics.   The contractors, of course, come at my advice from their perspective and not the consumer or person who’s having the work done for him or her.   Remember, you are in charge and it’s your house and money so demand a great end product/service at a great price (it’s not always true you have to pay outrageous prices for great work) .

8. Before accepting any bid check out the contractors work on at least two similar projects and, if possible have a conversation with the home owners who used the given contractor.  Ask the home owner if the contractor did the work himself or relied on a crew and if they showed up on time and worked neatly.  Finally, ask if the project was completed on time and if s/he met your expectations from a end product and work process perspective.

9. Put as little money down at the beginning of the project as possible.  If the contractor screams desperation that he needs money to secure supplies or materials then the contractor is probably not right for you.  If the job is large, then you may want to promise the contractor a small amount (maybe 10-20 percent of the total job) at some mid point milestone.  Remember, you need to have some incentive so that the contractor shows up every day and finishes the job on time.  My standard line to contractors who ask for money upfront is, “why should I give you money if you haven’t given my anything in return?”

10. Get everything in writing and be compulsive about the details.  Have the contractor document begin and end time (even if it’s an estimate), materials used, who will do the work, insurance, warranty on service and materials, etc.

11. If you’ve selected a contractor try to be home for at least a few hours during the first day of work and then at random times during the project lifecycle.  Check the contractors work and ask questions.  If the contractor is not doing something according to what you specified in the contract or what you verbally agreed to ask him or her to correct the issue.  Don’t expect to have thing go your way if you don’t manage the work or contractor in some capacity.  Before making your final payment inspect the work.

12. If the contractor wants to put up a sign advertising his or her work on your front lawn tell the contractor you don’t offer free marketing services so s/he can either reduce his estimate again or keep his, “another quality job done by ABC Corp.” in his pick up truck.  If at the end of the project the contractor has done a great job ask for some business cards and pass around to friends and family.

Remember that most older homes in the US will need constant home improvement work (here are 5 areas not to ignore) and that learning how to complete a given job or project yourself (if done correctly and with quality) can save you thousands of dollars per year.  If you must use a contractor, then treat the negotiation and the project as a sort of game where your end goal is to get the highest quality work done and the lowest possible price point (in other words, love to haggle!).

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Author: Lead Italophile (and/or lover of all things Italian).
  • Simon

    Vin: interesting article. I don’t have too much experience in this area but my parents have developed a very good relationship with a contractor who they have used to do many projects around the house. So a long-term approach to working with someone has been helpful for them.

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  • Daniel

    If you can find a contractor that will work for you under these conditions (I don’t know of one that would) you are going to get what you pay for.

    No money down – or at most 10-20%? Try 1/3rd the cost of the labor + the cost of all the materials, up front before any work begins and then sizable incremental payments. You don’t get to decide how much down you are paying me. I work with legally-binding contracts (you would be surprised how few contractors actually use legally-binding contracts) that allow me that much down, if you don’t want to pay for a job why get it done?

    I mean, think about this for a minute – do you go to McDonald’s tell them you want a cheeseburger and only want to pay 10% – if you decide the burger was worth the other 90% you will come back and pay them? Yes Vince, that is how absurd your statement was.

    “Negotiate fiercely and make tell the contractor you aren’t in a rush to get the job done?” Any quality contractor has walked away from you right there. You are taking this man’s time and gas-money while assuming you can push him around because “you don’t need this done.” Remember this works both ways, a good contractor doesn’t “need your job”. Some horrible amateur (that you warned against in #1) certainly does, enjoy having your house fall apart.

    #7? Holy hell. I sure as hell wouldn’t come over to discuss how you “want to move forward but the final price is too much”. You are right, I wouldn’t negotiate over the phone either, as a matter of fact I wouldn’t negotiate at all – that price is the price – go with someone else.

    It is so easy to go on and on here….

    This is good advice for homeowners looking to get something done. Find a reputable business with good recommendations, trust they will do a good job and don’t expect something for free. With all things you do get what you pay for, if Vince is only paying 70% of the final quote, believe me – that other 30% isn’t coming out of the contractor’s pocket, he is going to make his money.

    • http://www.scordo.com/ Scordo.com

      Hi Daniel,

      Thanks for the comments. Here are some quick responses:

      re: finding a contractor/decide when to pay the contractor.

      We don’t believe in paying for anything upfront, especially if nothing is delivered from the service provider. Why should any consumer pay for a product/service upfront if the product isn’t delivered or service started? If the contractor wants the cost of the products/material, then I expect the products/materials delivered to my home prior to making a payment. After the product/material has been inspected then the homeowner should pay the contractor. I’ve never had a problem with this process.

      re: negotiating

      There are many, many skilled contractors, especially if you live in a fairly populated area. The way I see it, contractors are offering a commodity and the consumer is in complete control (especially if the consumer understand a bit about the work or is somewhat technical) and should take their time vetting for a service provider/contractor. If a contractor doesn’t want to negotiate or talk through a given project a few times I would never use him or her regardless of their reputation or quality of work. I’ve had plenty of contractors walk away, yell, curse, etc. during the negotiation process and I’ve had no trouble finding a quality contractor for the price I, the consumer, want and can afford. This isn’t rocket science, the contractor works for the consumer and the latter should run the show.

      re: the price is the price

      If you’re in a position to set a price with no back and forth negotiation then you’re fortunate. I would never use a contractor who worked/does business in this manner.

      re: you get what you pay for

      My general advice is to take your time finding a quality contractor at the right price. I certainly believe in the contractor making money out of a given job but the question is how much money the contractor should make and what sort of value / price the consumer is receiving for a given service/project. I also never use the person/contractor who is in highest demand because they’re going to demand the highest price. If you take your time and are not desperate you can, generally, get a very good end product/service for a very good price.

      Thanks for your comments.

      • Daniel

        Oh that is all hogwash. You pay for things upfront everyday and don’t think anything of it -

        Ever subscribe to a magazine?
        Ever order something off of the internet?
        So I am going to come stone your house, I’m bringing my crew. Do you really think I am unprofessional because I won’t front the 40k in material cost and 50-60k in labor for my workers? That is literally one of the most absurd things I have heard in a very long time. Construction companies do not ever, ever work like that – no where, not anywhere in the world.

        As for negotiating… If you are going to purchase a new 50,000$ truck you might be able to get them to knock off 500 bucks (this comes directly out of the salesman’s kid’s mouths, not the dealership – so sleep well with that, anyway). That 500 bucks is 1% of the cost of the vehicle. I could knock 1% off if it would make someone sleep better – but 10, 20, 30%? Are you insane? That truck costs what it costs because of the labor, overhead of the company and cost of materials that go into the vehicle (it is no different with my company, I have all of those expenses too). The price is the price, that is why you get other bids – so you can choose to go with the cheapest and lowest quality of work.

        And the consumer is not in a bargaining position at all, they never are. Sure there are lots of smartphones, but if you want an Iphone you are going to pay what Apple demands for their product, they won’t even knock 1% off. If you want a stone house you are going to pay what it costs, otherwise put up some cheap ugly plastic siding – I have other work to do.

        And contractors build an extra 10-15% into labor cost for unforeseeable problems. I have never worked on a job or run a job where one of those unforeseeable problems doesn’t occur. If you are “lucky” enough to get that contractor to remove his safety-buffer what do you think he is going to do when he runs into a problem? The cheapest and most sly thing he can so he can pay all of his bills as he usually would. That is what I would do – what everyone does – that is also the reason I won’t come down in my price, so that never has to happen.

        As a side note, my aunt lives in a gated community in Florida. They shopped around for contractors. They went for the same type of person you are advocating. There house is just over 10 years old… So far their roof has collapsed (oops!), their stucco is falling off and their wall-mounted China-cabinet fell out of the wall (obviously destroying all of the China). Hey, 2 inch nails are cheaper than 3 inch galvanized screws, they got what they paid for.

        • http://www.scordo.com/ Scordo.com

          You seem pretty adamant about your position.

          I’ve never paid for materials upfront on all of our larger projects, including paver and driveway work, 35+ window replacement, large deck/carpentry job, et. al. When the contractor delivers the material, then we pay the contractor (not before). And I’d say there’s a big difference between paying upfront for a $12 magazine subscription (from a reputable brand) and giving a contractor you never worked with $20,000 upfront to go and buy materials (that’s a huge leap of faith).

          On your car example, you’re actually incorrect. The pricing breakout on new vehicles in the US includes the following factors: MSRP, dealer invoice or wholesale price, national OEM rebates/incentives, and regional OEM rebates/incentives. Car buyers/consumers, should start their negotiations at dealer invoice and work their way up. Most car buyers shouldn’t pay MSRP even on in demand vehicles. The “price is the price” philosophy doesn’t benefit anyone but the service provider/dealership/etc and isn’t consumer friendly advice.

          The “consumer isn’t in a bargaining position at all” – of course the consumer is in a bargaining position! You can buy a used iPhone or buy the older model for a significant discount. My point is that all services and consumer products are commodities and the consumer can find alternatives on any product or service (viz., an Android powered smartphone to stay with your example).

          Why should I pay for a “buffer” and assume and agree to an extra 10-15% into labor cost? If there’s an issue that’s not the consumer’s fault or not outlined in the contract why would you assume the consumer should eat the extra work/issue/etc.? If you’re a roofing contractor and demolish a part of my exterior sofitt when putting in a new roof do you think I’m going to pay for that (of course not, that’s the responsibility of the contractor).

          I’m not advocating that folks use bad or inferior contractors, what I’m advocating is negotiating and bargaining with a quality contractor. Your making a ton of assumptions that good contractors will not negotiate or have all the bargaining power and that’s just not correct based on our experience and the experience of our close relatives all of whom are in the trades (commercial plumbing, carpentry, landscape, concrete and asphalt, electrical, etc.)

          • Daniel

            ”
            You can buy a used iPhone or buy the older model for a significant discount.”

            All that sentence very clearly says to me is that you understand that “the price is the price” for an Iphone, if you want a different (older model) or used (which doesn’t come with a warranty and is used) you can can decide to purchase that.

            If you were implying that you as a customer are in a bargaining position with Apple because you have the ability to not get the product you were hoping to get, then I suppose you could call that a “bargaining position” – I call it “shopping”.

            To expand upon our phone example into the construction field – The idea that you can’t afford a stone house is fine, that doesn’t mean I am coming down in price – it just means you can only afford plastic siding.
            –
            Giving a licensed and insured contractor money under contract (that you have a copy of) to do a job is very far from a “leap of faith”. You have a copy of the contract and if he (after being in business for 20 years) decides to take your 20,000$ and not show up for work it isn’t difficult to get your money back.

            –

            “Why should I pay for a “buffer” and assume and agree to an extra 10-15% into labor cost? If there’s an issue that’s not the consumer’s fault or not outlined in the contract why would you assume the consumer should eat the extra work/issue/etc.? If you’re a roofing contractor and demolish a part of my exterior sofitt when putting in a new roof do you think I’m going to pay for that (of course not, that’s the responsibility of the contractor).”

            So I had a 1700sq foot flagstone patio I installed. It turned out that during excavating that the soil was so incredibly soft we had to dig down an extra foot – that is an extra 62 yards of dirt we had to remove (about 10 dump truck loads) – we also had to put an extra 62 yards of base material down. I lost a lot of money on that job, even with my 15% buffer – at 50 dollars a yard for gravel you can see how an *extra* 62 yards would add up – those are the things that you can not foresee. I am not talking about damaging your property as we are working on it.

            I have worked for a lot of construction companies, from the small 5-10 man crews to the larger 150 man union masonry companies. I also have lots of friends that own construction companies, from tradesmen to builders – this is the business, all of these companies operate the exact same way. You as the customer don’t know the intricacies of the work involved (that is why you are paying someone to do it). For a company to not go out of business that 10-15% buffer is essential. To assume an understanding of how and why multi-million dollar construction companies do things is very naive.

            Construction companies still go under, even when maintaining there “safety buffer” – I just purchased hundreds of frames of scaffold as one of the largest and oldest union masonry companies in my area went under and had to sell everything they had.

            –

            As for the truck thing, you could be right – I don’t know that business, the same as you don’t know the construction business.

          • http://www.scordo.com/ Scordo.com

            I don’t think the iPhone example is a good parallel because construction companies are providing a service along side raw material/product.

            I fundamentally disagree that it would be “easy” to get your money back from a contractor even with a contract/agreement in place. The legal process to recover lost monies from a professional services agreement can take years, especially if the contractor is no longer in business.

            re: flagstone patio example. Maybe that sort of thing should be written into the contract, but assuming a buffer mark up is dangerous territory and ultimately not fair to the consumer (your protecting yourself and if there’s no extra work or additional unforeseen event then you walk away with an extra 15 percent mark up correct, as you won’t be giving that money back to the consumer?).

            We wrote the article to pass on the very simple idea of not being passive and ill informed when shopping for contractor services. You, as a contractor, shouldn’t assume the consumer doesn’t know your business. I’ve had many, many instances were I’ve called out contractors on things they wanted to do with projects that were completely unwarranted. Moreover, when I’ve had my contractor relatives come out with me on a bid at our home they’ve been able to help reduce costs and call out unnecessary work / mark ups.

            You think “multi-millon dollar construction companies” do complicated things? Putting down a stone patio, laying tile, framing a home, et. al. is skilled work (and I have a ton of respect for the people in the trade) but it’s not rocket science and any smart, informed, consumer can understanding the process and costs. In fact, if a consumer is very motivated (and have the time) they can act as their own GC on most jobs.

            In sum, It’s dangerous to assume because you’re in the “construction business” you know more (or better) than a very informed consumer who’s looking to get at the best price for a quality job. Thanks for commenting.

          • Daniel

            The Iphone was a perfect example and you felt comfortable using it until you found out that you agreed with me. Generally people purchase their Iphones from a cellular company, services are generally provided (unless you plan to just look at it) with the product.

            “re: flagstone patio example. Maybe that sort of thing should be written into the contract, but assuming a buffer mark up is dangerous territory and ultimately not fair to the consumer (your protecting yourself and if there’s no extra work or additional unforeseen event then you walk away with an extra 15 percent mark up correct, as you won’t be giving that money back to the consumer?).”

            Lets continue with this. Let’s pretend it was you who was getting the patio. Contractually I have written that problems like that are passed along directly to you. You figure that if something comes up it might only be an extra 2-3,000 dollars, so you are comfortable (enough) with that. I run into that problem, all of the sudden you are contractually bound to give me an extra 20,000 dollars for the extra time excavating, dumping, plate compacting of the 2A modified, and the materials themselves. Is this a business practice you feel comfortable recommending to your readers?

            When I first said that you put a 10-15% buffer into jobs because something unforeseeable always happens (it is yet that I have been on a job that it does not). This isn’t a way that I gouge customers for more money this is an experienced and methodical way of bidding jobs that allows contractors to stay in business and do quality work. Yes, it would be fantastic to walk away with an extra 15% occasionally to make up for all of the money that gets lost on some jobs – however that very rarely happens.

            So I can pass along a slightly higher number (that generally results in me making the amount of money I bid per sq ft, even when something bad happens); or, I can tell someone once or twice a year that they owe me an extra 20,000 dollars and they are contractually obligated to do it – they can fight it in court and lose – the whole time their house/yard is sitting semi-demolished.

            Oh and I have had “knowledgeable people” tell me that some of the things I do are not needed – 6 inches of concrete with a higher PSI blend? He is just gouging you for more money – and he is using stainless rebar as well? What is this “Acryl 60″ mortar additive he is charging you more to use – I’ve never heard of that, he just wants you to give him more money.

            And all of the years I have been doing this I have not found one customer that understands the business, the work, why we do it and how it is done. Half the time other masonry contractors don’t understand – but their work falls apart and I get called to replace it. I have run across a lot of people that *think* they understand – because their cousin has been a carpenter for 25 years.

            “You think “multi-millon dollar construction companies” do complicated things? Putting down a stone patio, laying tile, framing a home, et. al. is skilled work (and I have a ton of respect for the people in the trade) but it’s not rocket science and any smart, informed, consumer can understanding the process and costs. In fact, if a consumer is very motivated (and have the time) they can act as their own GC on most jobs.”

            Again, this shows how very little you understand. So you understand (and stay current with) all of the trig, algebra and civil engineering that is required of these companies? You understand that when they are hiring a “skilled tradesman” to run jobs that he has to have a fairly intricate knowledge of these subjects (that is of course on top of his years of learning his craft)?

            Yep it is that simple, we just come in pour some concrete, throw the flagstone down and gouge the customer – no skill, mathematics or engineering is involved there.

            I have to have at least as good a knowledge of structural engineering as architects – because they make mistakes, when I am reading blueprints I have to catch the mistakes that they make (good thing the GC built an extra 15% into the contract or the homeowner would be getting a bad product). I have to have a good knowledge of trig for laying out complex angles and radius walls (I know, I am only a craftsmen). On top of all of that I have to have the knowledge of how to run a business (while staying in business).

            As I said earlier, I have never run into a customer that has any idea what is involved with this business.

          • rpm

            We are a GC Company specializing in Residential Construction. I stumbled on your website while looking for something. I read your tips on negotiating with contractors and had to smile. Then I read the comments and this has turned into a very interesting discussion.

            the tips. I think your tips are great. As with any product the more negotiating you do the lower the price you will end up with. We negotiate projects all the time but the negotiated price has to come out of the fit and finish of the project. No other way. If we remove money off the top without concessions from the customer we devalue the project and our company. This in turn hurts both parties. To stay successful in any business you have to keep your bids/prices real. This in turn creates successful projects for the clients and profitable projects for the business. We want to do your next project and your neighbors, if we treat you poorly we wont be doing either.

            Another note on negotiating, I am working on a kitchen project for a customer who wont tell me what the budget is. I just had an inside meeting with one of our staff. I stated I would like to do the job but if I present the project designed for a higher budget than the client is willing to spend we have a very low probability to get the work. (We are a design built company). Designing without a budget is as hard for us to do as designing a house for you without telling us what you want in it. This is a frustrating project for me.

            Response on no money down…. this is a two way street. Most legitimate contractors will be very alarmed if you tell them to come to work without money down. A well written contract, scope of work, full set of plans and payment schedule is standard. This is not set up to take advantage of the homeowner, it is set up to protect both parties. I think the extreme views you have put forth are based in common sense, but don’t push it.

            Note on not hiring a GC. for turnkey projects ie, flooring, siding, roofing, painting, electrical and h vac maintenance a general contractor is a poor choice. But on larger projects a general contractor who truly has his or her customers best interests at heart is your advocate to create the home or structure you have set out to build. A company which has successfully built many project has honed their skills set and does not make mistakes as much as they did on the first project they built. A customer who decided to build their own home or building will make mistakes. Some mistakes are minor some are major. Which type of mistake will you make on your first project? A general contractor has a liability to build what he is contracted to build for the price set forth in the bid. If he cannot do that he is in breach of contract.

            a last note, I built a beautiful kitchen for a customer in our area last year. The customer failed to pay us about 2,000 dollars. I could have sued for the remaining amount but I am loathe to have to admit if a customer asked if we have ever been involved in a lawsuit with a customer that we have. So I wrote it off as a poor decision to work with them and left it at that. The same customer just called to place a warranty claim. I asked if she stole a car would she bring it back to demand warranty work done on that. She couldn’t believe I would speak to her like that. Our business gets a lot of flack as a dishonest and opportunistic area. But many times to situation is created by poor planning at the beginning and customers who negotiate a hungry contractor into doing a project for a price not feasible. Be careful what you wish for, your 30k dollars you just got knocked off the price of your 100k addition may be the money intended to pay the heating and cooling contractor. Now you have a project that is underfunded. Who loses here? (we did the warranty work for the non paying customer, viral negative reviews are judge, jury and executioner for small businesses)

            note to the person who has the 160k dollar project. +/- jobs? You need to hire a good General Contractor who can nail the price down to a fixed cost. if you have one area or another which cannot be determined this area alone can be +/-. This is what I was talking about with the bad planning. You will set yourself up for disappointment if you cannot establish a good cost for construction.

  • Chris

    Any contractor that is willing to drop his price 30% from his original estimate is the one you should watch out for.He or she is either going to recoup the percentage by doing faster and lousier work or is so desperate for work that I would be afraid they are about to go out of business. A material deposit at the very least to start the job is standard. In my case with higher end kitchens, I won’t even start the design process without a deposit. My time and expertise is worth money period. I grew up in the trades and have worked in them for 18+ years including many of them as a business owner. I don’t know if that qualifies me as too new school but it makes me really good at what I do. Your kind of negotiating encourages people to hire cheaper less skilled labor over time. You are exactly what is leading to the decline of skilled tradesmen and quality work in our country. You said yourself Vincent that you respect the “old school” blue collar
    worker as being more capable than the average collage grad.Would you want anyone of your tradesmen family members to cut their income 30% just because their customer read an uninformed blog.
    Daniel I second pretty much everything you said.

    • http://www.scordo.com/ Scordo.com

      Hi Chris and thanks for your message. It seems like all contractors are beginning to hate us! On a serious note, you need to understand our perspective and where we are coming from; namely, a family who has a deep understanding of most of the work that goes into maintaining, renovating, and keeping up with a home. Our family experts comprise of carpenters (framing, rough, and finish work), plumbers (commercial and residential), electricians (commercial and residential), masons, landscapers (commercial and residential), asphalt and concrete contractors, painting contractors, etc. In turn, we understand mark up, labor prices, material costs, etc.
      Our advice is fairly aggressive and we stand by what we recommend. Specifically, on your point about your 18+ years of experience and “skilled tradesman” is to be very careful about making assumptions about what you should charge and what the market will pay. As one of my uncles stated a while back, all trades people (irregardless of how good they are and how much experience they possess) play in a commodity based field (that is to say, they are not providing a service that is unique in any substantive way). So, if a customer does his or her research and spends time vetting contractors they will certainly be able to find someone who is willing to work on most of the terms documented in the article above (especially, if they live in a major metro area).
      We humbly disagree that our article is uninformed (and so do most of our readers).
      All the best.

    • http://www.scordo.com/ Scordo.com

      Hi Chris,

      Thanks for your comment. We’ve gotten some heated responses, mostly from contractors, and it’s expected. We come from a long line of contractors and specialists (plumbers, carpenters, electricians, etc.) so we have a good grasp of mark up model (at least in our area of the country, which is just a few minutes outside of New York City).

      One thing you mentioned that caught my eye is that your “expertise is worth money period” This is a very dangerous assumption to make in a commodity business, viz., there are a ton of great carpenters, for example ,who can build fantastic custom cabinets (so your expertise is really worth what the market is willing to pay). In our experience, we’ve been able to use our tips to get the best price on the best possible service or end product.

      I think our kind of negotiating encourages homeowners to be very savvy about the work they’re getting done and to search for value when getting work done (one dangerous assumption is that the most expensive person is the best skilled person). We’ve hired carpenters from central america and south america with new businesses that did better work than our Italian family members who have been in business for 30 years and charge double what younger, more motivated, workers are charging.

      We’re sorry you think our blog is “uninformed”

      Thanks for reading!

      Best,
      Vincent

  • Peter

    Stick to writing about food, your a little off subject and wow this is really off base. Only way a contractor can drop a price by 30% is if he was overcharging to begin.. you are saying a bid of 30,000 if you are savvy then the contractor will do it for 20-23,000??? lol Contruction business has a pretty low markup and a lot of overhead and running around. It’s a service based business. Profit margins are not that high in most service based business. LOL Bill gates has a great profit margin on his software how come you done go to bestbuy and tell them to drop the price by 30% off the top. Microsoft can still survive unlike a service based business that works on lo profit margin + sweat and blood of the owner.

    Better advice in dealing with a contractor is to due your homework, get referrals and be honest. Forget about these games and trying to out smart the contractor. Brutal honesty all the way even down to the price and what you can afford which is key. If you tell the contractor you can not afford it and he sees you aren’t lying, trust me you will get the best deal if he sees you are truly incapable of closing the deal monetarily.

    Vincent I’ve done my homework by living what you write about everyday of my life and you are misleading in your numbers the rest is good advice but what gives you the right to cite these percentages?? FYI I have a 15% markup on cost to keep my lights on which leaves a 0% profit on the sales price and 0 commissions I shoot for a markup on that number that will bring me to 15% profit margin the sales price to stay competitive 30% profit margin would be high and as per your advice would get thrown out. So lets do the math I put in a bid for 20% profit margin, my break even is at 24,000. you are telling the home owner to push me down so it leaves the construction company in an unhealthy state suffocating for money and time while the firm is conducting work ,on the most important asset in most people’s life, THEIR HOUSE!

    On top of that you want to contractor to float the bills of material and laborers? they are already floating the overhead and have no investment in the property being worked on! again profit margins are not their to put money out of pocket on every property.

    What degree in business do you have or what other special training and experiences give you the authority to write this article?? I wouldn’t even say you are a good writer, if you were you would have been more careful in citing specific numbers with no reference material and then blowing off just about everyone who is trying to open your eyes and educate you to your error.

    You are like the coyote in The Road Runner cartoon, you haven’t realized you ran off a cliff and have no wings. Wait for it, wait for it ….. you feel that sinking feeling in your stomach that you might be wrong?? hope you do, i know it hurts your ego but it’s okay we are all human get over it!

    I commend you on 90% of the article but the other 10% needs revision. Please look into it, maybe research “selecting bids” and “negotiating tactics” for reference, this is where your knowledge is lacking and you are coming off as arrogant.

  • Peter
  • AB

    One problem I’m finding right now in these Post-Sandy times–if there’s enough business in the area, contractors won’t negotiate, they’ll just move on.

  • CBB

    If you have an estimate that is +/- based on the quality of items you select after you sign the contract, should you worry? 1st estimate was $160,000 then delete some work and 2nd estimate $130,000. This is for a replacement driveway (~50 yards of concrete). Existing has dropped 2 feet and has large cracks. Scope also includes new hardwood floors throughout, new kitchen, remove walls between kitchen & diningroom. New stairs for a split foyer house. Houses in my neighborhood sell @ $200,000 once remodeled.

  • dracos3113

    Vince, you sound like a total douche. With your methods, all you’ll get is the most desperate contractors, definately not quality if you think it’s ok to haggle on pricing, i’d gladly tell you to take do it yourself if you pulled that. You sound like a problem customer, all the way.

  • dracos2112

    If you asked for a discount twice, i’d tell you to take a hike. Then you will see what kind of “quality” contractor you get for your l”owest price”.