Pick the Cheapest Contractor. What Could Go Wrong?

by | Jul 14, 2018 | Levco Service Difference, Remodeling Budget | 8 comments

Reading Time: 4 minutes

A friend and potential client used another contractor because we were more expensive than she could afford at the time. We designed her project, and then parted as friends. Now that the project is nearing the finish, here is what her experience was. The regrets keep piling up, but hey, he was cheaper. What she bought is a headache that won’t go away.

She selected someone who is new to the business. He had no website or referrals, but was known by a friend. Nothing went well, to be frank. During the project, a neighbor kept calling me over to look and scratch our heads.

She asked me to come look at the poor workmanship. OMG. I just kept my mouth shut. It made me so proud of my team, it wasn’t even funny. Besides what I saw, I knew that the worksite was a mess for the entire project, and I knew there were many short cuts used which made the end result look like hell.

It looks better through rose colored glasses

She Signed a Time and Materials Contract

I like to say that typically the only two parties upset at the end of a time and materials or cost-plus contract are the contractor and the client. In the end, it is going to cost her more than what I had proposed in the first place, and the workmanship with what I could have provided. A fixed price contract is the preferred method of the majority of professional remodelers. The problem is that,without a fixed price contract, there is no incentive to be efficient or keep costs under control.

Now three plus months past due, and far from complete, the client is naturally furious and out of funds. I do believe the contractor did the best he could with the knowledge and the experience of the crews he hired, but as they say, the road to hell is paved with good intentions. Odds are the contractor lost his shirt on the job too. He might abandon the project “as is” rather than fight with the owner or do what it takes to make it right for her. Q: What recourse does she have? A: None, Idaho laws were broken, but they have no teeth. The investigation would take forever, and the penalty is a virtual slap on the wrist.

All Remodelers Are Not Alike

No two snowflakes are the same either. If we were too expensive, then she needed to take a serious look at the ramifications of selecting the cheapest contractor. There are likely several reasons that they are the cheapest, and none of them bode well for the client. What are the odds of a mistake in the  estimate, when every other contractor is coming in with higher pricing?

Is That Remodeling Contractor Doomed?

Not necessarily. Remodeling, well, it’s complicated. There is much to learn and many pitfalls. The odds of being in business for 10 years is astronomically low. There are a million ways to fail and only a few ways to succeed. There are mentors and lots of organizations to help but there is only a limited amount of time in your life to immerse yourself into the remodeling game. Who wants the stress? Who has the tenacity? Who is willing to invest the time? Few make it, and those that do are not successful by accident or just lucky. Many try to partner up; others are loners.

What Is the Right Price for a Remodeling Project?

Hard to say. It is all about the relationship with the contractor and your belief that they understand the project and will get you through to the end. This is your home, and you need the confidence that what you want will be accomplished. If we can cover costs, take care of our overhead, and make 7-10%, then I am pleased, and we priced the project appropriately.

What makes a great remodeling project for Levco?

Goal setting and planning from the finish line backwards, so we achieve a project that is:

  1. On time
  2. On budget
  3. Happy client
  4. A warranty that shows we care

Can you think of a simpler mantra for my crews to work with? I can’t. The cost for your project gets the work done in this manner. No more, no less. I overcharged a client once and felt guilty, so I redesigned our processes to make sure it never happened again. Bet no other contractor can say that.


Your comments are welcome. To ask questions or get more information about remodeling, click here to email me directly, or call 208-947-7261

If you or someone you know is considering remodeling or just wants to speak to a trustworthy remodeling contractor, please contact me. You’ll be glad you did.

Disclaimer: Some of these images came from the WEB. If they are yours, and you object to them being used, please claim them and I will gladly remove and replace them at once.

Disclaimer: Some of these images came from the WEB. If they are yours, and you object to them being used, please claim them and I will gladly remove and replace them at once.

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Leave A Comment

8 Comments

  1. Manny Fisher

    Well said and written, Joe!

    Reply
    • Joe

      Thanks Manny, it is a rare thing when the cheapest is the best choice, there always seems to be a price to pay

      Reply
  2. Rick St Laurent

    Good story and well written

    Reply
    • Joe

      Thanks for the kudos, no matter how you slice it the cheapest is rarely the best choice.

      Reply
  3. Brian Levitch

    Great article Joe, T&M contracts are actually illegal for residential projects in CA over $500, they all require a written contract with amount stated, start date, end date, the whole bit. There is a good reason for this and your client found that out a little too late. As we used to say “There is no economical substitute for quality”

    Reply
    • Joe

      Thanks Brian. It is no surprise that it is no longer allowed in Ca. I had no idea. The contractor did it because he didn’t feel comfortable estimating and thought he was protected going into it, as we know this is a recipe for disaster. I appreciate you taking time to write back. Joe

      Reply
  4. Carol

    Thank Joe! Your blog is always interesting & very well written!

    Reply
    • Joe

      Thank you back, I enjoy writing about all sorts of things that happen to me and my perspective on things. Having an audience that is interested helps.

      Reply

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