Wednesday, March 13, 2013

Negotiating with contractors

Our homeowner’s association recently informed us that we needed to repaint the trim for our house.  After much research, I was able to find a contractor who could paint our home at the price point that I wanted to pay.
Whenever possible, always be negotiating
I believe in paying a fair price for quality service.   When dealing with contractors, most of them have flexible pricing and will be happy to work with you at a reasonable price point, especially if you ask nicely.
Get as many quotes as possible.
To start the process of finding the right contractor to paint our home, I went to various sources: craigslist, yelp, friends, and family.  I had no idea what was involved with the paint job.  However, the more paint “experts” that I met, the more I understood exactly what work was involved and how long the process would take.

It’s difficult to know whether you really are getting a good deal on your contracting work unless you shop around for comparison estimates.

Even if you're absolutely committed to working with a certain company, it's a good idea to get a few estimates to see how other companies would handle the same job. 

By meeting multiple potential contractors, you can get an idea of what a “fair” price estimate for labor and materials is.  I noticed that mentioning you’ve “already gotten a few other estimates” helps contractors cut closer to their bottom line.  

Meeting several different contractors also helps you find the team that makes you feel the most comfortable to work with. The Department of Consumer Affairs recommends that you get at least 3 written bids on any project that you want to have done, and to make sure that you’re comparing bids based on identical plans, specifications, and scope of work. 

Separate the cost of materials from labor
Material costs for doing any contracting work are usually fixed.  Material costs for home renovations may include: tiles, cabinets, sinks, toilets, windows, doors, wood, and other items. I quickly learned that when getting quotes on paint jobs for my home, to request buying my own paint.  This way a contractor can’t quote me a cheaper price that included cheaper, inferior quality paint. 

By asking for estimates on labor only, this really helped me gauge the labor costs of the companies that wanted to work with me.  This helped me best determine what was the most reasonable price.  Some quotes that I received were ridiculously more expensive than other offers.  The most expensive company isn’t necessarily the best company.  They may be charging more since they don’t do efficient work, and need to take more time doing the same job. 

When getting your own supplies, make sure you double check the amount of materials needed with your contractor to complete the job without delay.

Price isn’t everything
Speaking with different homeowners who’ve also had work done, I learned that price definitely isn’t the only factor to consider.  I received some quotes that were very inexpensive, but this was from people I didn’t get a good feeling would do the job well. 

According to the Department of Consumer Affairs, you should be careful about accepting any bid that is considerably lower than other bids.  They may have made a mistake in the estimate or may not have included all the work quoted by other competitors. 

You want a good contractor to get the job done correctly the first time.  You don’t want someone who may cut corners or do inferior work just to save you some money.

Go with someone licensed
I went to the California Department of Consumer affairs Contractors State License Board to search for  licensed contractors.  The search allows you to see any public complaints, legal action, or civil judgments filed against your next potential contractor.  It’s a good idea to make sure your contractor’s experience can be verified. 

Going with someone unlicensed may save you some money, however they may not have enough experience in their field to do a job properly.  If you are working with someone who is not bonded and insured they may damage your property and not have insurance to cover any damages that they create.

I have a friend that will sometimes hire non-licensed contractors depending on the complexity of the project being done.  You may be comfortable working with a less experienced contractor if the job is not too difficult and you can secure a better price. 

It doesn’t hurt to ask for a discount
One of the most important facts I’ve learned when working with contractors and independent businesses is this: people are usually willing to drop their price in order to get a contract or make a sale.  When finalizing a deal, I find that looking someone directly in the eye and saying “Can you give me a better offer?” and then waiting silently (and patiently) will usually result in an extra discount.  Ask nicely and you will often be offered a price lower than the original estimate. 

Respect your contractor
Whether you choose to go forward with a contractor or not, you need to respect them.  While a company may not work with you this time, you may need their services in the future.  You may know friends or family who may benefit from their service in the future. 

We ended up getting 5 quotes for our home paint job.  I sat on the estimates for a while and then contacted the contractor I felt most comfortable with.  I explained that the price he offered me initially wasn’t the best quote that I received.  I also explained that I felt most comfortable with this contractor and if he could come down on the price to match a competing contractor, then we could make a deal.  He thought about it for a moment and then said: “it’s a deal.”

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