negotiating on prices
Every reno quote is really a guesstimate. we try to figure the time and materials and we have a goal of what we would like to make per day. We also know that the homeowner is talking to other contractors and we consider that when we compute our number; the knowledge that a customer is talking to other contractors is enough to keep our prices reasonable if we want the job. And that is another key, make the contractor want to work for you, that way if he has competing quotes to write, he may give you the best quote so as to work for you and not someone else whose job may be less desirable (say a 4 story walk up; we do them, but it literally hurts to carry tools and materials four flights). I will tell you this, I have never erred in such a way that I made more money than my goal; this is a competitive industry and we do not have those kinds of margins. We also cannot turn volume like some industries such as a car dealer who can maybe come down a little on two deals and sell two in a day to make up for the money he gave up on each sale; we still have to put time into the job, so it makes it harder to negotiate. A bit of advice going into a job: do not make money too much of an issue. If a customer makes money too much of an issue, the contactor is going to start thinking low budget and suggest materials accordingly. You may even scare some of the best contractors off. The best advice I can offer on how to negotiate is to ask for the quote with materials that you really want to have in your house – the right cabinets & molding & doors & hardware, etc. look at the numbers and decide who you want to do the job. At that point, if the number is too high and you really cannot do it, call the contractor and tell him all of the numbers came in higher than expected and that you really want him to do the job and ask if he can meet with you to discuss changing the scope a little or changing some of the materials to bring the price down a little. To ask anything other than that would not be fare to the contractor as you are literally asking him to take food off his table. Please be aware that there are all different kinds of contractors out there with varying levels of scrupples. When you have people working in your house you want people who will have values similar to yours; they would not steal, they would respect your privacy, they have the same sense of community and fairness that you do. There are contractors out there who literally go around undercutting other contractors to get jobs (when customers discover that predatory contractors like this exist, they loath them as much as we do; I have been called many times to repair damage done by them including once when I lost out in the bidding process to one of them). How do they survive? they dump their trash in home depot parking lot (I take mine to a legal disposal site and pay $180 a van load; we paid a waste hauler $500 to take away a van load at the job we are on now), they hire pay undocumented help 100-120 per day, they do not take checks and do not pay taxes (As a rule, I do not take cash), they go back to the customer at every excuse they can find and ask for more money (we don’t do that; we give a quote and that is it and we are very clear on what would be additional) and who knows where they are cutting corners on your job. In essence, you really want one of the higher quotes so you can demand qulaity and expect to get it in all aspects of the job. Steve http://brownstoner.staging.wpengine.com/tinkerswagon
stevecym
in General Contractors 12 years and 11 months ago
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yoa | 12 years and 11 months ago
i was wondering how many people negotiate contractor pricing? i am getting seperate estimates for floors, walls, and a/c installation. How much wiggle room is there?
pk4ave | 12 years and 11 months ago
Hi All companies are different, so we have to charge different prices Some companies operate from home, some from offices,others have insurances others dont, depending on how much their insurances cover them the prices are going to be different There is always wiggle room but how much is up to the contractor who estimated the project Hope that helped a little
iulius | 12 years and 11 months ago
For all contractors, every job is a gamble. There are always unknowns. A reputable contractor does not like going back to the client and asking for more money so factors this into his pricing. Some jobs go smoothly, and some have challenges; in the end it all evens out. If you negotiated a lower price and the job is turning into a big problem, he may start feeling resentful, and start cutting corners. Check references, make sure he is licensed and insured, meet with him/her then go with your instincts. The super cheap price is not usually the best way to go. Full disclosure, I am a contractor.
ellenlourie | 12 years and 11 months ago
The bitter taste of poor quality remains much longer than the sweet taste of a low price
greenmountain | 12 years and 11 months ago
These are all good answers. This forum is great because we are service providers, professionals, craftspeople as well as renters and home owners. We should be able to solve the problem of clients not getting what they thought they paid for. Let’s be clear about what sorts of things are usually left out of the job if prices are cheaper. An industry has grown up to conceal cash payments. To do the job cheaper, a contractor can avoid insurance, taxes, inspectors and auditors, without even speaking about it with clients. The cost of materials is usually insignificant compared to the cost of insurance. Contactor’s insurance rates are rising rapidly. Even if the client does not hear about it directly, they should know the contractor will first try to save money by reducing the largest expenses. I am no longer surprised that shareholders and board members presume coop management has this under control. They do not. Owners of free standing houses are often willing and eager to assist contractors in keeping expenses down. According to the Department of Consumer Affairs, 1,400 home improvement contractors are licensed. This suggests the vast majority are not. It is cheaper to operate without protecting consumers and workers. It is cheaper when you don’t pay taxes. The quality of cheaper work is another topic.
slopefarm | 12 years and 11 months ago
We ended up with a contractor who underbid the job and coul dnot quite finish — did some good work earlier in the job and cut some annoying corners near the end and we had to get someone else to come in and finish (and we are still having little pieces of the job redone). Here’s what I would do: Get 3 or 4 contractors to bid, relying on referrals. You learn stuff from each as you go through the house and you get a feel for the contractor. If all the bids are really close, you know the bids are sound. If one is significantly lower than the others, toss it out. If they are all over the place, you need to figure out why, becuase they are making vastly different assumpotions about the job. Assuming you’ve got more than one bidder in the same ballpark, decide who you like best. Talk to him about how much of the unexpected is built in and when he sees the need to do a change order. See if you think the approach is fair and protects you sufficiently. Once you decide who you prefer, ask if he can improve on the bid with a number that is comfortable for him (you don’t want a lower bid just to give it all back in change orders). He may say that’s the best he can do or he may take a little more off to get the job. You want a good job, but you want the contractor to be happy about the job and you don’t want him going in thinking he’s got to cut a lot of corners to make money. Finally, I cannot stress enough how important to the job it is to have a lot of on-site supervision from the GC or a good foreman.
slopefarm | 12 years and 11 months ago
Sorry — misread your post. Since you are bidding different trades separately, not a GC deal, I would not expect much wiggle room. Make sure you’ve got good referrals.
SewardWasRight | 12 years and 11 months ago
I interviewed about ten contractors over a course of 8-9 months before settling on two that seemed best for me and my job. I selected the one I had the best feel for, and am about at the end of the process. Overall, although the search took a long time, i feel it was time well invested as the work done so far is superior, and the contractor has been above board and easy to deal with. I can back up everything that slopefarm says above. Do your homework. Time spent researching and interviewing (although I didn’t feel this way at the time!) is NOT time wasted.
steam_man | 12 years and 11 months ago
I am always hopeful that those we provide proposals to will come to us for a second look after they have recieved other bids. They rarely do and that is because they tend to accept the lowest price without hesitation. It’s a shame because I can often find ways to value engineer the job. In my line of work (Mechanical) we can offer various product lines which may be more or less expensive that what was originally specified, so there is a bit of wiggle room there. A fine example is that of the recent trend for achitects to specify CityMulti systems in homes where a Mr. Slim would give the user the level of comfort that they require, at a fraction of the cost. My advice would be to revisit the price you recieve from your high bidder and see what he/she can do to get you in line with the median price (NOT THE LOWEST PRICE!). In the end you will have a great product at a fair price to both you and your contractor.And that is what makes for long term relationships. -Steam Man
agdipierro
in General Contractors 12 years and 11 months ago
Competitively bid everything. Dont go for the lowest bidder. Get the best company available to do the job for the best price possible. Dont put down more than 20%. If its a disaster from the beginning, fire the contractor and move on. Ed Kopel Architects