Negotiating With Contractors is in my blood and, 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:
Keep These 12 tips in Mind When Negotiating With Contractors:
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?” If the contractor insists he cannot pay for the material upfront, and you’ve thoroughly vetted the professional, then insist that you will pay for the materials/supplies once they arrive at your home and have had a chance to inspect and approve the material.
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!).