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      

A Business Lesson From Duck Dynasty's Phil Robertson

It's hard to go a day without seeing at least one of the bearded faces from Duck Dynasty.  I haven't watched every season, but I've seen enough episodes to have a favorite; it's the one where the guys have a doughnut eating contest, Si wins, has the winning raffle ticket for the camper, and wakes up out in the woods.

My sister gave me Phil's book Happy, Happy, Happy: My Life and Legacy As the Duck Commander for my birthday this past summer and I wanted to share one specific story from it that may be eye-opening for some DIY home renovators.

Halfway through the autobiography the Duck Dynasty patriarch tells of the early days starting Duck Commander.  He received a $25,000, interest free loan from a businessman at his church.  This was his start up money and at the top of his list was a lathe to create the duck call barrels.  He shopped around and located the equipment he needed in Arkansas.  The man asked him how much he had to spend and Phil told him...twenty five thousand dollars.  At the time it seemed like a blessing because the seller advised him that the lathe he was selling was priced at $24,985.  In hind sight it may have been a tongue in cheek figure, but Phil didn't get the joke and paid the price.  Later he realized that the big tool was really worth only $5,000 and the bearded duck hunter writes that it took the family nearly a decade to recover from this con.

If you've read many of my posts you know what I'd have told him: "Get at least three prices on things when you don't know the value."  Three is good, four is better, and five is ideal.  It would have taken some time and effort for Mr. Phil to find two or three other lathes up for sale, but it would've been time well spent.  This is easy for me to say, but I will also credit this mindfulness to a large company I worked for that helped me learn this before I was out working for myself. 

Comparable scenarios happen all the time in the home renovation world.  The greener you look, the more tempted the wrong contractor will be to try to sucker you in to paying too much.  It's real simple.  They ask you something like, "How much do you have to spend?"  And you naively answer the question.  Then oftentimes they try to do you the way that guy did Phil and if you're not careful you'll be into an agreement for something very close to the number you shared or something much higher than you should pay... which to me is just as bad.  This is not the way it should work though.  You simply tell them what you want and they give you a number.  Then, you repeat the same basic scope description (apples to apples) to comparable tradespeople and wait for them to tell you what it will cost in the form of a written quote or bid.  Be straight up with them about what type of work you want them to quote and expect them to be straight forward with you in return.  Ignore any assurances that "Everyone will do the work for some similar price," or "No one will do it cheaper," and push ahead to get more prices. 

Also, I'm ready to haggle at a flea market, in a pawn shop for used tools, or when I'm buying a car, but with contractors quoting me for work, I don't go that route.  Construction renovating is a team effort and I don't do my teammates that way.  I ask them to just give me their best price from the beginning so they can "still make money."  Then I let them take it from there to get as tight as they can with their figures.  I review the bids and choose the best contractor for the job.  Sometimes it's the low number, but not always.  (For more on this topic see Push Hard to Get Quotes.)

So if you want to be happy, happy, happy, don't tell everyone at the poker table what cards you're holding and don't tell bidding contractors how much money you have to spend.  Be ready when they ask, but keep your budget details to yourself.    

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)

Some Like it Hot, Some Like it Cold

Heating, Ventilation, and Air Conditioning (HVAC) rough-in follows the electrical R/I on my projects.  For me, the rough-in for the heating and air usually comes down to unlocking the door and getting out of the way.

On one hand, I'd like to tell you this is just luck.  However there's a little more to it than being fortunate.  In Push Hard to Get Quotes I described how important it is to get multiple estimates. The HVAC part of the job is a good example of where this time and due diligence will pay dividends.  When I talk to the HVAC contractors who visit my houses before they give me a quote, I really make an effort to pay attention, ask questions, and listen closely (and maybe scratch down some notes).  These walk-thrus are interviews and I'm always mindful of the big question:  "Can this contractor do this job for me?"  It's not solely about price.  I have to bring someone in who's qualified, experienced, licenced, insured, organized, and well-managed.  More simply put, I need someone who can deliver, perform, and stand behind their work over time.  Heating and air conditioning R/I day is not the time to figure this out.

Finally, I should mention that as the owner/general contractor on my projects I am expected to have a place prepared for the HVAC crew to set their units and it's my job to make sure these areas are accessible, ready, and all theirs when they arrive.  For the most part, they'll have first dibs on the space under the house or in the attic to set their equipment and to run their trunk lines and duct work.  In addition, they may have some cavities/chases designated just for them or may work some ducts through the floor joists.  However, I may also need to have a platform built for them beforehand, but when this is needed it's discussed and understood ahead of time.  Either I build what's needed myself or I have the framing crew do it.

So, if you do your part, HVAC rough-in will be pretty effortless (for you) because you won't have to do much other than standing clear and being ready to write a check after the crew passes the R/I inspection.

Jump to Step 20 - Soil Treatment for Pest Control

See Step 17 - Bring in the Reincarnation of Einstein (Plumbing Rough-In)

See Step 19 - Pulling Wire:  Electrical Rough-In

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.