8/13/2019 How to Negotiate a Deal With a Contractor

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How to negotiate a deal with a contractorCost overruns and missed deadlines may be all-too-common in homerenovations, but thats because few homeowners know how to managecontractors. To ensure a successful project, first you need to walk in

their Wolverine boots or at least imagine what thats like forcontractors.

!sk yourself, what matters to a contractor" #Contractors want to knowyou are well funded and that the budget is on target with the job. Theyare more receptive when they know the homeowner is serious andready to get the job done,$ says %ebra Cohen, founder of &ome'emedies of (ew )ork, a contractor referral service.

#*ne of the first things we look at is to see if the project has a chanceof getting off the ground,$ says +ince utler, president of utlerrothers, a northern +irginia design build firm and former chairmanof the (ational !ssociation of &ome uilders 'emodelers Council.ike many contractors, utler says he increasingly finds that the scopeof projects eceeds budgets by as much as /0 percent. Today,homeowners epect projects to cost less because the value of their

home has decreased, but in reality the cost of lumber, cement andother building materials, which are highly dependent on oil, continueto rise.

1or most of us this discrepancy translates into sticker shock when weget estimates for any kind of work in the home.

Whats the best way to get a handle on costs" *f course the time-worn

advice of getting three bids and checking out recent jobs still applies,but having a clear idea of what you want to do is just as important.2ven something as straightforward as painting a room involvesoptions3 %o you want to paint the trim" What color" What about theceiling" &ow much patching is involved" 4riming" *ne or two coats"When you eplain the job to a contractor, its important to spell outevery detail. #There is no way to overvalue the planning process inconstruction,$ says Cohen.

#5f the customer knows what they want in terms of fitures orproducts, the more knowledge they have, the better they will be in

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negotiating a rate with the contractor and they are also more likely torecogni6e an offer that might be too good to be true,$ says +enus7tromberg, with the Contractors 7tate icensing oard 8C79 forCalifornia.

!sk for detailed bids and separate line item pricing. Thats particularlyimportant #1or labor 8demolition, plumbing, framing, flooringinstallation, painting, etc.9, and finish material :uotes 8for things likeflooring, tile, plumbing fitures, lighting, or doors9,$ says !manda;ettel, owner of &ome 0 percent down or ?>,000 ahead of time, whichever is less,

and not to let payments get ahead of the work.

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!sk if there is a less epensive way to do your project. *nce theyreali6e that your target budget is somewhat in line with the project, agood contractor will work with you to find ways to shave costs. 7till,utler says, #5 can help people get a project down by >0 or >/ percent

but 5 cant do /0 percent.$ Today, too, most contractors are trying tobe as lean and mean as possible. #4eople are being as competitive aspossible across the board and 5 am seeing a similar trend with my subs@subcontractorsA,$ says utler.

e wary of bids that are out of line with the others. Betting the bestdeal involves more than a cheap price. #Buys who are licensed,insured and doing things by the rules have more overhead. ut dealingwith them is much preferable to dealing with someone working out ofthe back of their truck,$ says Cohen. Boing with someone who isunlicensed might be fine for a small handyman job but for anythingmore you will want to know they are going to be in business a yearfrom and, most importantly, that they are insured and pay subs,suppliers and workers, who can file a lien against your home if theyare not paid, in a timely matter.

Check with your state to see if your contractor is licensed. !lso, sayeperts, dont just ask if they are insured, actually verify insurancecoverage with the insurance company. 1or big jobs, they suggest thehomeowner should also be listed as a certificate holder.

Will you save money by acting as your own general contractor"nless you understand construction and deal with trades, probablynot. 7ubs are likely to give the best price when they know thecontractor will hire them over and over again. !nd the contractor will

be much more knowledgeable of what costs should be and how the jobshould be done. !dditionally, good contractors ensure that their subsare insured.

*ne last tip, from Cohen3 )ou dont want to hire a contractor whofeels he is being underpaid. While its great to negotiate, you dontwant a contractor to start a job feeling like hes not making enough.