OfflineEven honest contractors occasionally play a bit fast and loose with the truth. All tradesmen are looking to maximize profits and minimize hassle and that can end up costing you extra money.
So don't take everything a contractor says as the complete truth. Try these strategies to neutralize three classic fibs without harming your working rapport.
What He Says: "I don't have any wiggle room on my price."
What He Means: "I'm hoping you'll pay my boom-time rates."
During the real estate bust, even top contractors have been forced to drop their bids as much as 10% to 40% to compete for the dwindling pool of jobs. Yours surely has too unless he thinks he has your business locked up at any price.
How to Respond: Get bids from a couple of other well-regarded companies and let your contractor know.
What He Says: "I need money upfront for materials."
What He Means: "I have to pay outstanding bills from other jobs."
Any well-established tradesman has 30 to 90 days to pay his suppliers. Asking you to prepay is a sign that he's either had his credit revoked or needs cash for something else (which could leave him short on your job). Regardless, you don't want to put your dough at risk if he suddenly can't complete the project.
How to Respond: Tell him you'll prepay the lesser of $1,000 or 10% of the price or offer to pay the supply house directly. If they balk, another $1,000 or 10% will show him you're serious, but don't cough up more.
What He Says: "You'll save on property taxes if you skip the permit for a small job."
What He Means: "My life would be easier if we did this job illicitly."
Even a small job requires a permit if you're installing walls, wiring, or plumbing lines. Inspectors check the crew's licensing, insurance, and code compliance. But if you aren't adding square footage or a major amenity like a new bathroom, you won't see a property tax hike, says Bill Carroll, president of the International Association of Assessing Officers.
How to Respond: Politely insist on a permit, and expect to pay $300 to $500 for the application fee and the contractor's time. And don't let him talk you into getting the permit yourself. Then you bear all the responsibility for compliance and you shouldn't let a contractor off the hook that easily.
Working with, and paying contractors you are using
Posted on: Tue, 07/06/2010 - 16:06
Working with, and paying contractors you are using
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Every contractor has wiggle room it's normally 20% Profit and overhead.
Only pay 10% or $1000.00 whichever is less as state law requires and only after you see materials and workers on site. Make sure hter is workers comp on employees.
Always obtain building permits and never pay untill the inspector has signed off this covers you incase a savvy home buyer asks for proof of the legality of work done. The building inspector is not happy if he catches you later. They can even fine you.
I have been a inspector and contractor. It got to the point in the last 5 years that I required 50% down. The reason I did this was that the people that did this I had no trouble collecting in the end. On some bigger jobs I did let the people set it up in draws going though the bank. I use to never charge anything up front. But after getting stiffed so many times and having to get attorneys involved this just seem a lot easy way to my money.
Randy
www.adeptpropertiesllc.com