Real Estate Advice

When you hire a contractor, there are several things that you should never consider saying. The term “never miss a good chance to shut up” applies when conversing with a contractor. When you hire a contractor, you are literally putting a property or a real estate deal in their hands. You do not want your property to fall into the wrong hands. This is your business. You don’t want to lose money on an investment because you overpaid a contractor by not following these rules. If you do, you’ve got nobody to blame but yourself. All of these tips are very simple; many are actually common sense. They are things that people view in retrospect after the project is finished, just how obvious the mistakes were.

Contractors are notorious for taking advantage. Many investors experience serious repercussions from not knowing how to talk to their contractor(s). By reading this article, you’re being given a chance to not end up with a disaster, or spending more money than you would have had to. Keep in mind that even if you only have a small job, every piece of advice in this article pertains to you. It is not only the large jobs that contractors take advantage.

Contractors can be very manipulative

Another thing, contractors can be very charming people who promise you the world; and, promise to not go over your budget. Many people complain that the contractor exceeded their budget. Realize that you really do hold a lot of power when it comes to whether or not their project goes over budget. If the project turns out being far more expensive than the bid, you aren’t completely innocent in that. There are so many things that you can do (which are mentioned in this article) that will make a big difference when it comes to staying in budget. It’s up to you to watch where exactly your money is going to. If you don’t, you can’t entirely blame the contractor.

Dealing with contractors sparks an unbelievable amount of stress. However, it’s got to be done. At least here you will be able to learn how to avoid the unnecessary stress that you experience only when you give them too much information. They are very skilled at doing the bare minimum of work, and reaping an exorbitant amount of profit. You’ll never have a 100% satisfactory experience with your contractor, but you can make sure it turns out to be a mutually beneficial relationship instead of being used. Contractors love to take advantage; make sure that you’re always on guard when dealing with one. Remember, this is you’re investment and you want to protect it and make sure you profit.

Telling them that they’re the only contractor you’re considering

This is a gigantic mistake. At minimum, you should be getting at least three bids from different contractors. The saying “the more the better” absolutely applies when it comes to contractors. If you let them know that they’re the only contractor you’re currently considering, and are getting a bid from, you lose immediately. Be sure to separate the bids into different categories: materials and cost of labor. This is going to serve you very well when you are choosing a contractor. You want them to believe that they’re the ones being considered, and not the other way around. Otherwise, expect to get overcharged.

Never disclose your actual budget

Rest assured that if you tell a contractor up-front that your budget is $50,000 you will be quoted for $50,000. They will figure out a way to calculate and add up the labor and materials to meet that budget. The solution here is to give them a bid for the job you need done. Let them create their own number, without telling them yours. That’s when you compare bids and find out what the job actually would have cost. Only when you have multiple bids will you be armed with enough information to make an accurate decision.

Most contractors charge you much more for materials than they actually cost. Most of the time, there is excess left over and they will bring it to another job and charge them for it. They make a lot of their money off of materials. Therefore, you must take each material cost on the bid and research to see if it is accurate. Sometimes, they’ll charge you $50 for a can of paint when it’s $20. The fact is, many people are trusting of the contractor; moreover, the bids usually are detailed with so many materials that they don’t bother to examine each and every one.

Don’t make the ultimate mistake of offering or agreeing to pay upfront

This is a foolish mistake, and not just one made with a contractor. Any time you pay someone upfront, they have less incentive to do the job as carefully as they would have if they were waiting on payment. Chances are, they’ve already spent it and therefore have lost determination. The worst-case scenario (which happens very frequently) is that they’ll disappear altogether after getting paid. The bottom line is that your job is immediately moved to the bottom of the priority list.

Of course, you’ve got to pay some portion toward the cost of materials upfront. If you’ll take the time to purchase and provide the materials yourself, all the better. You won’t regret it. Another thing they’ll do is buy cheaper materials than they wrote out in the bid. For example, if you wanted the top of the line caulk at $30 a tube, they’ll go and buy a $5 and use that on the job. You won’t find that out until later when you see the caulk deteriorating after a few months. All of those little materials add up, and you can’t be sure you’re getting what you paid for unless you buy them yourself. A contractor that won’t let you buy your own is probably not one you’ll want to work with.

Letting them know that you aren’t in a rush to complete the job

Fact: if you tell a contract that you’re not in a hurry to finish the project, and that you have no deadline in mind, the project is going to go on forever. Even when a contractor knows a specific, firm date that they need to finish by, they’ll still go over.

So if you want your kitchen finished in 2022, let them know that you “aren’t in a rush.” Even if you don’t have one, create one. You must write out the expectations you have for each week of the project. The contract needs to be excruciatingly specific and firm. Otherwise, they’re going to spend their time at other jobs instead of yours. The contractor must be made aware that they’ll lose money if the job isn’t finished by a certain date.

Do not let the contractor select the materials for the job for you

Never give a contractor the freedom to choose the materials for the project. Each material falls on the end of only one or three spectrums: cheap, high-quality, or somewhere in the middle. Regardless of what the job is, you will not need to use the highest quality materials for each aspect.

Some materials are a minor means to an end, and don’t need to have a fortune spent on them. It’s important that you research to become knowledgeable on each type of material so that you can choose the right material-grade based upon the specific project. By allowing the contractor to choose each material, you’re going to get messed over. That’s another fact. Choosing the right materials is everything when it comes to a construction project. If certain materials don’t look right, or fall apart after, you’ve only got yourself to blame.

You’re also going to be charged way more money than you needed to spend. They’ll likely end up using materials from another project. Think about it. From any kind of project (not just renovating or remodeling), you’ve always got materials left over. Wouldn’t, and don’t, you use those materials on the next project you have to do? It also should go without saying, but collect any and all receipts for the materials, if he purchases them. You’re far less likely to get ripped off if you tell him you want a copy of any and all receipts for materials purchased on the project.

Make sure anyone you hire is licensed, and holds an insurance policy

There are many contractors that suggest bringing in workers who aren’t licensed to do a specific job. It doesn’t matter how great they are, if they aren’t licensed, don’t allow them to work on the job. If someone is hurt at any point during the project, you are liable. You have got to be certain that the contractor is both insured, and licensed. Never proceed with a contractor without visually seeing their insurance policy. Make sure that any and all of their subcontractors are covered under that policy as well. After all, contractors have many jobs to work on, and usually the subcontractors perform most of the job.

On the topic of subcontractors, you’ll want to be sure that they are actual getting paid. Many times, the contractor won’t actually pay the subcontractors. If and when this happens (and this may shock you), you can have a lien filed against the property. Many people either don’t know that, or think it couldn’t happen to them. The lesson here is to always pay them yourself. Keep in mind as well, that there are many contractors who hold a criminal history. This doesn’t mean that they aren’t a good person, but you should know their background regarding ethics. Everyone should be given a second chance, and that means contractors too. Also, sometimes people are wrongly accused of matters. Be sure that when you read a negative review, you don’t automatically assume the contractor is bad to work with. Many times, clients get angry over something very, very minor and decide to explode their frustration on the internet. Often those reviews you read online can be very negative and biased. On the other hand, if you read tons of reviews in the same spot and notice a pattern, you need to listen to it. A bad review here and there is fine, but when you start to notice a pattern is when your ears (in this case eyes) should perk up.

Never proceed without a written contract

If you don’t have a contract in writing, you’re literally asking for trouble. Ideally, it should be extremely detailed and cover absolutely everything, but even a handwritten agreement signed on a piece of printer paper is more sufficient than absolutely nothing. You have to have something in firm writing that can be referred to if something goes wrong. Verbal commitments don’t hold up in court. Also, with a specific, signed agreement, the contractor is far less likely to cheat you because they don’t want to deal with the legal ramifications.

There you have it; the things you should never say to a contractor. The unfortunate part is that they seem so obvious, especially in retrospect after a disaster. When you look back on a huge mistake you made, it usually was a lot of little mistakes that could have been easily avoided that led up to it. One of the things that is so difficult is that they have a lot of freedom. No one can stay home every day for months when a project is being performed, people have to go to work. It usually is from being busy and not paying attention that mistakes are made.

Play fair; don’t mess him over either

On the flip side, make sure that you aren’t shorting your contractor, just like you don’t want him to short you. You should always pay someone well for a job. The more complicated you make a situation when someone is trying to do a job, or the more you micromanage, they will get resentful and put less effort into it. Mostly because they either don’t care anymore because they are being disrespected, or because they want to finish get out as fast as they can. Could you blame them?