Hartford Courant Watchdog

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bobbyho

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Happy Easter guys, well spring is just around the corner. If you google Hartford Courant Watchdog, there is an article today about how to be firm with your contractor. This is the typical early spring article for homeowners about how to handle contractors. I have to take exception to a number of things this article has to say. Such as "no matter how honest your contractor is, he will want a contract that is as loose as possible with loopholes to drive a backhoe through" or "Find out how your contractor is calculating his profit". Maybe I can get a customer to pay for a flat rate book and we can learn together:rolleyes:. This article seems to be primarily for GC's but the average homeowner doesn't realize this. They will take the word contractor and apply it to all of us with tools. I am going to send this fellow an email or a letter but I will wait a few days to mull over just what I am going to say. If any of you would like to provide some feedback, I would love to hear your thoughts.
 
When I read that part of the article I was trying to imagine how other contractors would react. I'm wondering if a GC can manipulate that towards their own advantage.
 
MAK said:
When I read that part of the article I was trying to imagine how other contractors would react. I'm wondering if a GC can manipulate that towards their own advantage.
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As long as you've actually been paid, why would it matter if you signed a piece of paper to attest to that fact? I can see a GC trying to get you to sign one, even though you haven't' been paid, with the statement that when you sign it, it will release money to pay you. I haven't had that trick pulled on me, but I can see a guy trying it. I sure wouldn't sign it unless I have, in fact, been paid.
 
The article has some good advice for the homeowner. I would question one thing and that's about trying to get the plumber to reduce his mark-up. If the plumber can purchase 40% cheaper than retail then the mark-up should be his. I don't think many plumbers are going to reduce their rates. If this guy wants to see a real mark-up he should find out what that A/C unit actually cost the HVAC installer. Around 100% is normal. The only reason that many HVAC installers can buy so cheap is because of the volume of business they do.

I'm all for the requirement of lien waivers at the end of a job. This makes sure that all subs are paid before the GC gets his final payment. The final payment for the GC is normally his profit anyway. Why should he be allowed to take his profit at the begining of a job anyway ( that's what most try to do ).
 
Also, get written releases from each subcontractor stating that he was fully paid after each part of the project was completed and you have paid the contractor.
MAK said:
Is this a typical practice?
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Absolutely it is for any kind of contract work, and is standard practice for all commercial work. It prevents the a dishonest contractor from filing a lien on work he has been paid for.

I would also humbly suggest if you are buying a house and work was recently done either as part of the sale, or to make the house ready to sell, that you acquire the lean release before closing.

As for trying to get the plumber to tell you his markup or show you his quotes...yeah good luck with that, they wont even itemize let alone break their bid down for you.
 
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ITO said:
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I would also humbly suggest if you are buying a house and work was recently done either as part of the sale, or to make the house ready to sell, that you acquire the lean release before closing.
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Or get title insurance which protects you in the event someone places a claim after the sale.
 
but the plumbing contractor purchased an air-conditioning compressor without consulting us.
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Why would the plumber buy an A/C compressor?

Try going to Best Buy or Wal-mart and get them to tell you what their markup is.
 
Thanks for the input on the topic. I took exception to a couple of things.
1) The loose contract. I would love to give everybody a 6 page contract for every job. How many people would be scared off if I dropped a 6 page contract for installing a ceiling fan?
2)Find out how your contractor calculates profit? Ask the same question to your dentist or any other business. Why should we have to sit down and explain business practices to customers? Maybe we can provide a link to the thread on overhead for a contractor.
3) Itemized estimates? Never for a free estimate. That is proprietary information. You want that then there is a design/build charge for that estimate of at least $350.00
4) Talk to the workers? I never talk about price of items to the homeowner if I am a sub. I tell them to ask the GC and I will let the GC give them the price after I give it to him.
I am glad I waited till today to give myself a chance to think about this article a bit more. I was never really hot about this but I find it silly that the people or peoples advocates can really generalize and put all contractors in the same boat. Giving the author of the article the benefit of the doubt, I realize that sometimes you have to generalize to write an article. I really find it silly that they feel they can take up our time picking apart estimates to see how we arrive at prices. At the end of the day that is the $64,000 dollar question isn't it? McDonalds will sell you a cheeseburger for $.99 and Tavern on the Green will sell it to you for $14.00 are you going to ask these two how they arrived at their pricing? Either way you know you are getting..... a cheeseburger. Does it matter how they arrived at the price?
 
With all due respect we make our dinning decisions on a different level than we pick our service providers. Even between services we have a sliding scale, i.e. we might look for a good doctor, but we when we look for a plumber we qualify it with the word “cheap”, as in we are looking for a “good cheap” plumber.

It all comes down to value and trust, the customer wants to trust to the contractor and get a good and fair value for their money, but if they can’t trust the contractor, they don’t believe the value. Things like showing up on time, doing what you said you were going to do, keeping your schedule, owning up to your own mistakes, and having a good attitude , create trust. Things like being late, having a poor attitude, changing your price, gouging on change order and schedule over runs erode trust. If they don’t trust you, it does not matter how good a deal they are getting, they will think you are being dishonest.

I do not subscribe to the idea that transparent book keeping, and markups build trust. In fact transparent billing does more to erode trust than anything else. Some customers can count wire nuts and watch the clock and somehow come to the conclusion the three 27? wire nuts and ten minutes you took to put them on is a rip off, while others will call Home Depot to check your device prices, just to make sure that $1.30 a device you charged is not to much.

Never break down your price to nuts and bolts, it only fuels the fire of distrust. Instead create a clear scope of work that defines the work and schedule with a price that you can do the work for and make a little money. The scope of work should include the number of panels, fixtures, and devices included in your price. Sometimes if I am working on building trust, I will also include a unit price for adding lights, or receptacles before the sheetrock goes up (or even how much to add one as a wall drop). If they want a break down, tell them all the material is included for your scope and point out the scope clearly defines the quantities of big ticket items.

Keep in mind takes-offs and unit pricing is proprietary information and will be used against you every chance the customer gets, even to shop your number with your competitors.
 
I would expect a comprehensive price that included all labor and materials. I don't think it needs to be broken down a whole lot. I would expect some kind of overview as to what the scope of work is, and the model/brand/color of the major items, but beyond that, its not of much use to me to get much more information.
 
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