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.    

Attention First-Timers: Double Your Estimates from the Start

Some folks will be thinking about their next renovation project before they're finished with their first one.  Others understand that one home restoration undertaking is all they'll ever do.  This advice is for first-timers.  If you're an experienced renovator, this may be helpful, but more than likely you'll be reading along while nodding in agreement as you'll know the advice I'm recommending is valid.  I love to renovate and I want to encourage others to experience the process of fixing up a house as I have.  This advice is to serve as an aid, not a bucket of cold water on a prospective home renovator's dreams.  We have a saying in this industry: if you don't get the foundation right, you'll be fighting the building the whole way.  Think about my advice as a cornerstone for your adventure, keep it in mind from the beginning and you'll have a much better ride.  

Your schedule and budget should be at the forefront of your plans to take on a house renovation project and they should stay with you like a pair of guardian angels until the end.  The duo work together and can drive your project efficiently in unison.  However, if you lack in either (time or money) your project will grind along and be harder than necessary.  If you approach the bank for a loan to buy and/or renovate, one of the first things they'll want to know is how much and how long it will take.  That should reinforce the significance of time and money in construction renovating. 

Be realistic and honest with yourself when you determine the cost and time it will take.  You may be able to roll up your sleeves and put your tool-belt on, you might be in a position to hire most of the work out to others, or maybe it's a solid combination of both.  It doesn't matter, when you renovate it will take time and money so give both of these serious enough attention that you can write the specifics down on paper.  This advice applies to redoing the entire house, remodeling the kitchen, or adding a master suite.  If you're a first-time renovator, acting as your own general contractor, take your time and money estimates and double them before you start.  It's that simple.  If you honestly and sincerely think it will take 5 months and $20,000 then make sure you're ready for a ten month project and have $40K ready for action.  No matter how thoroughly you may prepare beforehand, there will be things that you'll unknowingly leave out of your plans. You'll tear into walls and discover challenges you didn't expect.  Also, you'll likely discover certain tasks are easier than you anticipated and find yourself saying, "While I'm at it I might as well..."  As I described previously you're going to make some errors (see Vinny Had the Right Idea), and quite simply, renovating is a marathon and not a drag race and you're a person, not a cyborg.  You're going to get tired.  All these are factors that will impact your pace and your bottom line so double your allotted time and money from the beginning.

The pair at the end of the clip is a Canadian couple that's renovating a triplex together in Montreal (see Just Two Weeks).  You probably understand it's going to take you longer than two weeks and realize it's more complicated than doubling that and planning on a month.  Really make a wholehearted effort to estimate your time and financial commitment.  Furthermore, don't be mislead by the 30 minute or one hour long reality shows you can watch from the comfort of your living room.  A skilled team of experts with a production crew and corporate sponsorship play a big part in making their schedule and budget more palatable than it will be for a first-timer.    

Finally, work hard to stick with your original estimates.  From the start, be diligent about working to get done using your estimated time-line (i.e. 5 months) and be vigilant about completing things with your initial budget numbers (i.e. $20K).  Give it everything you have.  However, keep in mind that things will happen as they always do, your schedule will stretch out, and you'll get further from that original figure you felt so good about.  It's okay.  That's just how it goes.  Be ready for it and understand that in the end you're going to be closer to my numbers than yours.  I may be wrong, but I doubt it.