Today’s show is a little bit of rant. I get morally offended and outraged when I see people within the general public taken advantage of.
I recently came across a homeowner who was looking to renovate her home. We’re talking about the addition of a 12×14 bedroom, the redesign of a room to create an ensuite bathroom, new siding, new windows, new insulation, the addition of a garage and some landscaping. Contractors were quoting her an all-in cost of close to $400,000.
My initial reaction was to say that she could be an entirely new house for that price.
A detailed review of the quotes showed the problem. A simple amount of education could save this homeowner hundreds of thousands of dollars. I consider these types of quotes to be outright theft.
There is nothing criminal about charging a high price. If the grocery store starts charging $10 for a kit-kat chocolate bar, there is nothing compelling you to spend $10 for a chocolate bar. But when that happens, then everything else in the grocery store is called into question.
So if you don’t know construction pricing, and more than one general contractor gives you a high price, then you might be tempted to think it’s normal.
Let’s look at a few specific examples from the quotes this poor homeowner received.
Let’s start with the bathroom. It’s a relatively small bathroom at 5 x 12 feet. The quote for the tile work was for $10,000.
If we tiled the entire bathroom, across the entire floor, the shower floor, and all the walls from floor to ceiling including behind the cabinets, there are 332 feet of tile area. Let’s say that we hire an expensive tile installer at $8 per square foot, and let’s say that we spend $6 per square foot on the tile which is more than triple what a builder would pay. If you add all of that up, the most you could spend on tiling that bathroom would be $4,650 on the worst day ever. How the contractor justified their quote of $10,000 is a mystery to me.
So the question is, how does the average homeowner avoid paying these types of inflated retail prices for modest construction work?
Simple home remodelling projects like this are small projects. The really small contractors are the ones who are often gouging customers. I call these contractors 2 guys and a pickup truck. Everything about them is inconsistent. They don’t show up on time. They don’t keep their word on pricing. They charge too much. They take advantage of homeowners who don’t know any better.
The true professionals in construction on the other hand are a pleasure to work with. They work quickly, methodically, fairly. There is pride in workmanship. They spend the first half day on a job site measuring and marking with a laser level. They are slow and careful at the beginning, and then accelerate when it comes time to do the construction. They’re faster than you could imagine.
But unless you’re prepared to offer them full-time employment, how do you get access to them?
Well, it turns out that many of these professionals are willing to work evenings and weekends for a little extra pocket money. These weekend warriors will work for the same wage as their full-time employment. They will do quality work. They will be fast. But don’t waste their time picking up supplies. Make sure the materials they need are on the job site before they arrive.
The most difficult job to get done with quality people is the one that is too small for the major construction firms and too big for the weekend warriors to get done on evening and weekends.
But if your goal is to get a job done at a reasonable price, with high quality, figure out how to carve it up into chunks that are small enough for the weekend warriors to bid, commit, and complete. If you do, you’ll save more than 50% compared with the shark infested waters of retail home renovation contractors.
The Real Estate Espresso Podcast (0:5:49)
