Ensuring Value in Your Projects

01-21-17

 

Have you ever received an estimate for a project you were considering?  Did the number at the bottom of the page nearly knock you over?  The purpose of this article is to provide homeowners with some basic knowledge about hiring contractors, and a few rules that I follow to ensure I’m getting the best value out of my projects.

Now, I will say that not every contractor is out to get you.  Not every contractor is guilty of price gouging.  Unfortunately, not all individuals and businesses are completely open and honest with you.  Some may overbid projects when they detect that the customer has no idea what the cost should be; studies show that this happens primarily to women and elderly.  They may take a 50% down payment and never perform any work.  Some may even use high pressure sales tactics to get you to authorize the very expensive work because they are booked for 3 months solid, but just happen to have an opening tomorrow…. groan.

Not every contractor’s ethical compass points north.

But how do you know?

The first thing I tell every client of mine who is considering a large project: Get at least 3 Estimates.  Every time.  Period.  If your project is more complex than a service call, you owe it to yourself to obtain 3-5 estimates.  More often than not it is worth your time, and can literally save you thousands of dollars.  Using this practice, I personally saved $48,000 (the amount between the largest bid and the one we went with) on a major landscaping project.

Now read this again, and take it to heart.

The balance of cost and quality.

Just because you receive a bid for an exorbitant amount of money, does not mean that contractor will provide you with that much more quality than the individual or business who came in with the median bid.  Let’s look at an example:

Your concrete driveway has become deteriorated and you would like it replaced.  You’ve listened to my advice (we both knew you were smart), and you obtain three estimates.  The first comes from a young contractor who has 10 years of experience, but just started his own business, so he has no reviews and no one in the community is familiar with him.  He has knowledge and experience, and performs high quality work.  His estimate is $6,500.  The second comes from a major concrete contractor.  They perform millions of dollars of work per year, but do not necessarily have time for your job, so to make it worth their while they bid the work at $9,000.  The third comes from an older, smaller concrete contractor who has been around for 30 years and is widely known; his bid comes in at $7,500.

Now here is the kicker – all three contractors provide the exact same product and service!

So, who do you choose?

In my personal experience, I would usually end up going with the contractor whose price was middle of the road.  Sometimes it is the low bid.  Very seldom is it the high bid, but we’re not just considering price here; we are evaluating much more than just cost.  You need to research the individual or business and look for reviews.  You need to ask friends or members in the community if this contractor has performed work in your area, and what they thought about it.  Word of mouth travels fast, and most people have an idea of how “good” or “bad” a contractor is.

If it seems too good to be true, it probably is.

Use common sense when evaluating estimates.  Use good judgement, but also listen to your gut.  More often than not, if you have a foreboding feeling about how the work is going to go, you probably shouldn’t hire that contractor.

 

 

 

 

Ask questions!

One thing I see people fail to do time and time again is to ask questions about the project!  Ask the contractor hard questions, test their knowledge, ask for material prices, etc.  If a contractor hands you an estimate with a blanket price and no detail about the scope of work or where that large number at the bottom of the page came from, you should probably review your options.  This is not to say that there is no value in the work, but most honest, reputable contractors will be somewhat transparent about their costs.

They need to make a profit to survive.

You can’t expect a contractor to perform work for next to nothing.  Their time is valuable, and has a price tag on it.  This price tag varies, but it exists nonetheless.  Consider a plumbing company or an electrician:  These trades generally have a trip charge of anywhere between $50 and $100.  Just to come out to your house.  That doesn’t always include materials or the cost to fix the issue they were called for in the first place.  Businesses need to make a profit to survive, so be cognizant of that.

Summary

If you have taken the time to get this far, you will be well equipped to ensure you are getting value out of your projects, and feel confident that you are not being taken advantage of.  Please feel free to share this with friends and family, as everyone is entitled to a fair shake when it comes to hiring contractors.