Contractor Fees

There’s an ever growing number of resources providing advice when hiring a contractor. Regardless of the contractor selected, almost every job is negotiable. More complex jobs tend to have more negotiation room but also surprises that contractors, nor anyone, could predict which muddy the waters in terms of your true final costs.

Contractors negotiate all the time, you may not. They’re likely have the upper hand when it comes to crafting a persuasive argument for their quote. Face-to-face negotiations on a topic of which you may be less educated and prepared can an uphill battle and you’ll likely get out of it what you put into it. Read the topic on Negotiating Tips to help prepare.

Research contractor reviews

This site doesn’t endorse any contractor but we have a couple links below that could assist in this process. Of course there a host of lead-generation sites such as Thumbtack, Angies-List, Craftjack, Houzz, and more that offer contractor profiles and reviews. 

Hiring a contractor isn’t all about price; more importantly the value. The cheapest contractor may get you what you paid for and this could cost a lot more in the long run. Find the combination of variables that gives you the best value which could include attributes of price, quality, licensing, insurance, timeliness, servicewarranty, and sometimes your gut instinct.

Research

Scope Creep

Scope Creep

While there may be unforeseeable situations that are beyond the scope of the original negotiated job, you can minimize your cost by preventing scope creep. This means sticking to the original plan to avoid additional costs. 

How often do you come out of a store with more than you planned? Stores are experts at getting consumers to purchase on impulse and some contractors are too. These types of purchases usually deliver high margins to the seller. Contractors may try to sell you on additional features while the project is in progress. 

On the flip-side, if you are going to make a change to the scope, it may save you money to do it while the contractor is already on-site and furthermore to avoid remodeling a recently completed job. It comes back to research and preparation. 

References

Asking a contractor for references is the minimum you should do but caution against putting to much merit into those responses. Of course, they are going to recommend positive outcomes. 

Rather, do your own research and consult with people you trust that have used a particular contractor. You can ask more thoroughly about the pros/cons to obtain unbiased feedback. 

While it takes more time, it never hurts to get multiple quotes for the job. Just make sure that each contractor is quoting the same job scope. You can’t compare apples to oranges and make a good decision. If you have a preferred contractor but they are high in price, talk to them and give them the feedback or a target price. You can tell them you’d prefer to award them the job but you need some relief on the price.

Fine Print

Depending on the job the contractor may add fees for disposal, environmental handling, mileage, and you name it. If these weren’t discussed before the terms of the project were agreed upon, you should have the right to refuse these fees. Disagree without being disagreeable. Keep the relationship positive and professional.

Adversarial discussions or conflict are bound to add fees where otherwise the contractor may have absorbed them. Furthermore, depending on your knowledge level of the job, contractors can find things that are wrong or not part of the scope, and you’ll be in a debate with an expert.

You could be stuck between paying more on the spot or the contractor leaving the job unfinished (another good reason why minimizing down payments are critical and paying only when specified deliverable are met). The more money you keep throughout the job, the more negotiating leverage you’ll have.  

Be aware of the classic excuse where contractor comes back to request more money (even for the same scope) because they miscalculated the time or materials, etc. This is most prominent when contractors are providing a quote based on a verbal description, photos, or videos. Get a firm commitment on the price before moving forward with the project or agreeing to any exceptions. 

Green Incentives

Your job may have qualifiers for energy efficiency rebates. Replaced lights, appliances, or almost anything that reduces the use of natural resources from water, gas, electricity may qualify for a rebate.

These programs vary by area and providers. Click below to redirect to this topic where there could be some easy money available to you.

man, working, construction

Old Materials

Hidden Treasure

If your job consist of remodeling there is a chance there’s value in the materials being replaced. This may be from fixtures, electrical wire and components, landscaping elements, barn wood, and more. Some of these materials you could sell as scrap or sell on an online marketplace.

Copper, aluminum, and stainless steel are a few of the most common metals in a remodeling project that can have a material payback at the scrap yard. Or save reusable items for yourself to avoid future expenses (hardware, fixtures, wiring, etc.).

Consider this topic in your negotiation with the contractor to avoid them taking off with materials you own. Better off, make it clear at the beginning that you plan to keep certain items such as the outlets, plumbing, fixtures, etc. 

Warranty

Ensure to get a documented warranty that covers as much as possible. If the contractor is reputable and stands by their work, then why would they have a problem giving you a warranty? Their workmanship and products should last if they perform high quality work. If you specify products that the contractor doesn’t stand behind you may just succeed in a workmanship type of warranty. 

Every warranty comes attached with terms and conditions. Negotiate those terms in your favor by extending the boundaries of coverage and the length of time of coverage. This can avoid future fees later. You can use this a negotiation string to get more coverage here after the price is settled.

Warranty

Other Cost Reductions

Considerations to reduce your overall costs:

  • Provide more flexible availability to suit the contractors schedule. The pressure of time usually results in a premium cost. In other words, if the contractor knows you want the job done in a hurry you’re like to pay more. Getting on the schedule at a later date when the contractor has openings will give you more room to negotiate. 
  • Can you provide any materials with the assumption you can get them at a lower costs than the contractor? This sounds easier than done…unless the scope is small with only a few items. This may be a bigger headache than it’s worth from measuring, lifting, transporting, and your time. Think this through before offering.
  • Specify a lower cost brand or a lower cost type of material such a pine instead of oak. 
  • Is there a cash discount or do they accept fee payment methods such as Venmo? And if you paid cash and later (within reason) you find out the contractor would have accepted a credit card or some payment medium that charges them a fee, then contact them and see if they will give you 2-3% back.
  • If hiring a General Contractor, they will have a markup of usually 10-20% to manage the overall project and subcontractors. You may get them to concede to absorb some of that margin. Request a breakdown of their costs to include materials, labor, overhead, permits, and all the cost components. This may also help you learn of ways to reduce their costs in addition to asking them to reduce their mark-up.
  • Suggest a reasonable target price. If your target price is too low and unreasonable they’ll probably refuse to negotiate further and hold firm. If reasonable, the contractor may agree or at least open up some conversation about ways to achieve (or get closer to) your target price.
  • Or simply ask the question…How can the cost be reduced? 

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Six Sigma Material
Six Sigma Material
1 month ago

A friend of our had a furnace replaced by Stahl & Sons in Lansing, MI. Stahl did a great job handling the rebate process. We received $250 by upgrading to a 95% efficiency furnace through Consumers Energy.😊

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