Quotes Shouldn't Change

I was running around on Tuesday, getting some last minute things crossed off my list before New Year's Eve when I saw a face that looked familiar.  You know how it goes; you see someone and you ask yourself, "How do I know that person?"  I was actually holding the door open for them when I realized how our paths had crossed.

Back in 1999, I was getting written proposals for a project.  I had my multiple prices and awarded the flooring scope to a local subcontractor.  All the estimates were in the same ballpark, all the bidders were equally qualified for the work, so the obvious choice was the lowest number.  An easy call.  I telephoned the low bidder and advised them that they had the job.  The next day, something unusual happened:  the prospective contractor called me to say they'd have to raise their price.  There was not a lot of hesitation or apprehension coming for the other end of the phone, it was just sort of matter-of-fact as if they were sharing some news I needed to be aware of.  Something like, "Just calling to let you know that we took another look at our price and we're going to need more money than we thought."  This is not normal.  No one does this.  I mean, this happens almost never.

Have you ever heard of the bate and switch sales strategy?   With the bait and switch, a business person or company advertises something for one price and then when they get a customer lured in to make a purchase, they adjust things in their own favor to make more money.  I guess it felt a little like that.  So anyway, I thanked the people for the news, but without much thought I let them know I wouldn't need them for the job and that was the end of that. 

Then I called Bidder #2 and gave them the job.  Maybe I spent a couple hundred dollars more, but I never thought too much about it... until Tuesday when I spotted the price changer from '99.  Another thing I'm remembering now is that I ended up going back to subcontractor #2 on at least a half dozen more projects in the years that followed and would  probably be using them even now if they hadn't have relocated their business to another town farther away.

So this is just another lesson in the need to get multiple prices.  Hiring someone for a job on a renovation is the beginning of a relationship.  It may last a few days, or in some cases, it may be ongoing for years.  On the same project I mentioned above, I hired a contactor I'm still using today 14 years later.  He's not just a tradesman on my job, he's a friend.  But like I said, these are relationships, business relationships and you don't want to head down a path with someone who's jerking you around at the start. 

Quotes shouldn't change unless you change something.  If you want more, you need to be ready to pay more.  If you need less than you can ask for a credit.  (But understand that even though this discount is customary it's not guaranteed.)  Also, get something down on paper if you and your contractor adjust the price.  You may not be saying the same thing and getting it in writing will eliminate the possibility of confusion when it's time for you to write a check. 

Finally, as I've said before, work hard to get multiple quotes.  Then, if someone tries to go up on their price, you can point to the signed agreement and/or be ready to go to the next person on your list.

See Push Hard to Get Quotes or A Business Lesson From Duck Dynasty's Phil Robertson      

Don't Beg For Quotes

Most of those who read this post will be familiar with the song by the Temptations titled Ain't Too Proud to Beg.  Well when it comes to gathering estimates for your project, I'll encourage you to think of this song and then ignore it's message.  But this advice is not about pride it's about common sense.  Don't beg for quotes.

I've written more than once that it's important to work hard to get multiple price estimates whether you're trying to sign someone up to re-roof your house, install wood floors in the living room, or agree to take down a big tree in the yard.  Three prices is good, four is better, and five different quotes is ideal.

This is an example of how you get the value of work:  if you get five apples-to-apples prices for something that'll cost three grand, there's a good possibility you'll get estimates like $2500, $2900, $3000, $3100, and maybe $3500.  Assuming you don't know how much this work should cost, you will after you look at the five different prices since $3,000 is the average.

Now, this gets me to today's point.  I'm telling you to work really hard to get multiple estimates, but don't go too far for a proposal and into the area where it feels like you're begging.  Simply put, you don't want to enter into an agreement with someone that sets you up into that circumstance.  Furthermore, if you have to ask them for their number a second time, take this as a red flag and don't forget it.  If they can handle your business, they'll be able to deliver on the task of working up a written price estimate.  It stands to reason that if you have to do anything that feels like begging them for the quote then you'll likely have to do some similar pleading when it's their turn to work or finish their part as required.     

Also, if a business person says they'll get you a price by "tomorrow morning," then they better have it for you by the next day before noon.  However, it's another warning signal when someone promises to provide your written estimate and are late.

If you find yourself working a little too hard just to get a price, that's okay.  Don't hang up the phone or slam the door.  Just acknowledge what you're doing and get the estimate you've been after.  Thank the person for their time, but use someone that quoted you in a timely, professional way.  These may be tradespeople more accustomed to using their hands and tools than office equipment or computers, but providing written estimates is part of the job too and you should accept nothing less than basic courtesy and professionalism.

See Push Hard to Get Quotes (July 9, 2012)

Push Hard to Get Quotes

A common mistake people make when serving as their own General Contractor is to hire the first and only person they meet on any given trade.  Roofing, ceramic tile, or the septic tank installation; it doesn't matter...you have to push hard to get multiple quotes and resist the urge to take a short cut and move ahead with less than three.  

Let's use plumbing as an example.  The rehabber and Joe Plumber meet and tour the property.  They talk about the project, perhaps review some drawings or sketches together, and answer each others questions.  This leads to an estimate and the novice renovator has to make a decision.  First of all, they don't have to tell the plumber yes or no at this point.  However, what happens many times is that the inexperienced renovator jumps into an agreement too quickly. 

I know how this goes in the mind of the renovator or home-builder because I've been there hundreds of times.  The plumber seemed like a good guy that knows what he's doing and what he's talking about.  Maybe he came highly recommended and that adds to the impulse to give him the green light.  Renovating a house is a lot of work with a long list of things to get done.  The person making the decision is focused on crossing things off their massive to-do list and having a plumber on board (with a name, phone number, and agreement) would feel like a big step in the right direction.  Plus, it's easy to award the first plumber the job and rationalize later that his competition would have likely been in the same ballpark (price-wise).  This is totally wrong.  You shouldn't stop at one quote and settle for that because one estimate won't give you an accurate understanding of the value of the work.  It's tempting to move ahead with the first price from contractor #1, but it's a mistake even if your uncle (a retired plumber) told you how much the job should cost, you got a guesstimate from a helpful licensed GC you know, or you diligently researched the subject on the internet.  Those are all smart steps on your path to finding a plumber and signing him on, but you need to keep going.

Let's say the first plumber (that good guy who seems to know his stuff) offers to do the job for $4,150.  You keep at it and plumber number two hands in a quote for $3,300, a third company says they'll do it for 3,000, and a fourth man submits a $2,500 estimate.  Three bids is good, four is better, and five is great.  For the sake of this example, let's just say a fifth quote comes in at $3,250.  This let's us know that the plumbing work for this job is worth a little over three grand.  It's not uncommon for the bids to stack up this way, and I'll also point out that I don't always take the lowest price.  I'll look hard at all the proposals, but ultimately I want a trades-person who can perform.  

A construction budget can get out of hand quickly and awarding work without getting plenty of prices is oftentimes a big part of this.  Going with the first quote would have meant overspending by a thousand bucks.  If you do something similar on all the major trades you'll be hemorrhaging money unnecessarily and budget headaches make any project harder than it needs to be.  I understand that there will be rehabs and scopes when five prices is just not doable; rural areas off the beaten path make magic numbers four and five a real challenge, some scopes are specialized and you'll be thankful to just get two bids (i.e. stained glass window repair), and sometimes it won't make sense to beat the bushes for prices when the cost is minimal.  I get all this, but really try to get three numbers from qualified folks and if you're able to get four or five on the big ticket things (like demolition, framing, roofing, drywall, painting, plumbing, electrical, HVAC, etc.) then do it.

Finally, there's a second very important reason why you really must get more than one quote per trade.  You have to be ready with a Plan B.  What if you choose someone and they have an accident or some personal family issue?  Things happen and you've got to have an alternate in mind so you can keep moving forward if something unfortunate occurs.  This preparedness is just smart business.  Like it or not, the sheetrocker, painter, and electrician will sure see it like this (as business), so you need to be ready to see it this way too.

Don't be foolishly impulsive and don't get caught with your pants down.  Get those quotes.