RSS FeedJan 21 2009
Sticker Shock (Otherwise Known As — The Latest Bill From My Contractor)
I’m learning at lot about the best way to work with contractors. Mainly, I’m afraid, by making every mistake in the book along the way. (Of course, a good friend of mine who used to fight martial arts competitively insists that pain is the best, most efficient educator there is. If he’s right, I think I deserve a PhD in home renovation by now.)
Anyway, I’ve decided to share some of my hard-earned wisdom. If someone were facing a significant renovation project like mine, and I was only able to give them once piece of advice, this is what it would be: Never, EVER, pay a contractor more money than what they say is the absolute minimum they need, right now, to either start or keep a project going. Let me tell you why…
Should you pay a contractor up front what they give you as the total estimated amount of the project, I pretty much guarantee that they’re going to be in a lot less hurry to finish you project (and, thus, be able to ask for the rest of the money). Especially if they have other projects which are competing with yours on which they can collect more money if they finish.
Moreover, the costs for renovations seem to magically expand in some particularly ruthless, evil version of Parkinson’s law. Plainly stated: remodeling costs will expand to what your contractor estimates to be the total size of your wallet. Trust me, you are much better off if your contractor/builder thinks it was a real struggle to come up with the 50% up-front than that you didn’t break a sweat writing a check for the full project before it’s even started.
One final advantage to paying in increments is it lets you keep better tabs on whether or not you’re running over-budget and provides you the opportunity to make mid-course corrections rather than simply being keelhauled when a bill for the final tab shows up.
Lest you all begin admiring me for my profound depths of wisdom, let me confess that that’s so NOT how I handled the latest round of things with Kenny…
At the beginning of this phase of renovations, Kenny gave me an estimate of $10,000 to replace the windows and doors, siding, and roof panels. I wrote him a check for $10,000 thinking that would be “easier” and that it was less likely I would burn through the $5000 that was sitting in my savings account waiting for him to finish the project.
What followed was v-e-r-y slow progress on the house. Followed by Kenny breaking his leg and being unable to finish the project for several months, and me being in a position of not being able to hire someone else to finish the project because the money had already been spent.
And now that the project is finally wrapping up, I’ve received a bill for an additional $6,000. This, after months of asking if we were over-budget at all and not getting a response. Oh, and by the way, he needs the money NOW or he’s not going to be able to do any more work on my house. Never mind that I waited, reasonably patiently, after he broke his leg and couldn’t put the new roof on my house, leaving my house without a roof for two months during the rainy season.
(Can you tell I’m just a teeny, little bit cranky today?)
Anyway, I guess I know where my tax returns are going. Sigh. The check went out in the mail today and I’m going to do my best to follow my own advice in the future.
I’m learning at lot about the best way to work with contractors. Mainly, I’m afraid, by making every mistake in the book along the way. (Of course, a good friend of mine who used to fight martial arts competitively insists that pain is the best, most efficient educator there is. If he’s right, I think I deserve a PhD in home renovation by now.)
Anyway, I’ve decided to share some of my hard-earned wisdom. If someone were facing a significant renovation project like mine, and I was only able to give them once piece of advice, this is what it would be: Never, EVER, pay a contractor more money than what they say is the absolute minimum they need, right now, to either start or keep a project going. Let me tell you why…
Should you pay a contractor up front what they give you as the total estimated amount of the project, I pretty much guarantee that they’re going to be in a lot less hurry to finish you project (and, thus, be able to ask for the rest of the money). Especially if they have other projects which are competing with yours on which they can collect more money if they finish.
Moreover, the costs for renovations seem to magically expand in some particularly ruthless, evil version of Parkinson’s law. Plainly stated: remodeling costs will expand to what your contractor estimates to be the total size of your wallet. Trust me, you are much better off if your contractor/builder thinks it was a real struggle to come up with the 50% up-front than that you didn’t break a sweat writing a check for the full project before it’s even started.
One final advantage to paying in increments is it lets you keep better tabs on whether or not you’re running over-budget and provides you the opportunity to make mid-course corrections rather than simply being keelhauled when a bill for the final tab shows up.
Lest you all begin admiring me for my profound depths of wisdom, let me confess that that’s so NOT how I handled the latest round of things with Kenny…
At the beginning of this phase of renovations, Kenny gave me an estimate of $10,000 to replace the windows and doors, siding, and roof panels. I wrote him a check for $10,000 thinking that would be “easier” and that it was less likely I would burn through the $5000 that was sitting in my savings account waiting for him to finish the project.
What followed was v-e-r-y slow progress on the house. Followed by Kenny breaking his leg and being unable to finish the project for several months, and me being in a position of not being able to hire someone else to finish the project because the money had already been spent.
And now that the project is finally wrapping up, I’ve received a bill for an additional $6,000. This, after months of asking if we were over-budget at all and not getting a response. Oh, and by the way, he needs the money NOW or he’s not going to be able to do any more work on my house. Never mind that I waited, reasonably patiently, after he broke his leg and couldn’t put the new roof on my house, leaving my house without a roof for two months during the rainy season.
(Can you tell I’m just a teeny, little bit cranky today?)
Anyway, I guess I know where my tax returns are going. Sigh. The check went out in the mail today and I’m going to do my best to follow my own advice in the future.
When I was in college, I worked for a kitchen place. They were very honest and upfront, and they did all they could to make it easier on clients, but remodeling was ALWAYS traumatizing for people. I agree: Don’t ever give more than the minimum deposit required. I never understand why the place I work for (the library) always pays contractors before they’re finished with the job. There is no incentive for them to do anything after that. Good luck to you!
Ran across your website. very cool.
I purchased a floating home about the same time as you. I have remodeled my place too,
but just some interior cosmetics. It has been very fun, I love the water. It’s a week-ender, a place for my family to escape. maybe we will see you when it gets nice.
2dalu from slip f-2
@Dan, I would love to see pictures of your place! Is yours also in Portland?
@Steph,
Hi Steph.
We are neighbors!!! same marina
I can see the back of your house from my front door
give me your email and I’ll send pictures
Dan
@Dan, oh, very neat! Please come by and say “hi” when you’re there this spring/summer. You can send me pics at stephanie.reiley@gmail.com. Odds are good I’ll know where you are when I see them. I’ve spent a decent amount of time running up and down the ramps taking pictures.
@Dan, just noticed the slip # in your previous comment. Is your place cedar shingled? If so, I think I may have taken a look at it the same time I viewed mine.
@Steph,
Yah, I did the same with your place
@Dan, believe me, there have definitely been times over the last year when I wished I’d made an offer on yours instead.
@Steph,
you have a great view
can’t put a price on that.
Contractor Response
As a contractor, I am often amused by homeowners who, after a bad experience, are now experts on contracting and have a number of superlatives regarding contracting in general. These poeple are usually the first to balk at a professional contractor’s price as it is “too high”, chosing instead to go with “my yoga instructors boyfriend” who is a “carpenter”. You get what you pay for in quality and headaches.
Here is the real scoop on contracting done right. First, working on a time and materials basis generally ends up costing more than anticipated. Why, because it gives you the ability to skip the planning / estimating step that is crutcial to success. If you can’t get a fixed price for a fixed scope of work, you will suffer the consequences. Next billing should be on a fixed time table (day, month, etc.) or in conjuction with completion of work (ie: $5000 at completion of framing). If a contractor tells you they need more money, you should be getting more service. Unforseen conditions are to be expected in renovations (rot, etc.), but a contractor asking for more money just because, is a sign of a hack, amateur.
There are in fact real contractors out there, who actually know business and building and do both well. Its unfortunate when people have bad experiences, but to lump all contractors into one”boat” (sorry for the bad bun), isn’t fair to the rest of us who have spent years mastering the skills necessary to not only build buildings, but build professional relationships, not unlike an accountant or lawyer.
Erik in VT
@Erik, thank you for the input and my apologies if I painted all contractors as “evil”. Certainly, part of the responsibility for my experience rests with me, both in terms of my selection process and also in terms of the extent which I did (or didn’t) hold him accountable for his performance.
If you have any tips on how to find a GOOD contractor, I’d love to hear them as there’s still several projects on my house to go. Thanks for visiting.
Steph
Contractors like most business are out to make money. There is nothing wrong with that. Consumers often leave themselves open to “add-on cost” as the project is progressing. Such as adding faucets, cabinet doors, new light fixtures ect… They often bond with the contractor explaining yes I would like this or that and then are in a state of shock when receiving the final bill. I have known a few to fall into an “pay by the hour trap” and witness slow motion in real time. As complex as this actually is one must try to keep it as simple as possible- Get references on people you would like to do the work. Then let the contractor do the agreed upon work for the agreed upon price. Make a list of all add-ons and if possible save these for another day. I know this is all easier said than done.