The Best Tips on How To Negotiate With a Building Contractor

by Hank Coleman

home-buildingNow that there is a recession and everyone is in need of every single dollar of revenue, the home owner is in control when dealing with contractors.  You have the negotiating power.  Vendors, contractors, subcontractors, and the like need your business.  And, there are a lot of out of work contractors milling about nowadays.  You have a lot of great choices and do not have to settle.  The ball is in the homeowners’ court, and they have the negotiating power.

Here is how to ensure that you get the best deal and amount of work for your money when you negotiate with contractors.

  1. Make sure that you get at least three bids for your job.  It sounds like a “no brainer”, but people are still getting ripped off by not getting competitive offers.
  2. Choose all of your project’s details such as the type of tile, fixtures, hardware, etc.  You can greatly control the costs and cut out the contractor’s increases if you purchase or at least dictate exactly which features you want used on your job.
  3. Be clear about your scope of work. Never leave things open for interpretation by the contractor.  And, also be clear about your expected start and finish dates.
  4. You may be able to save a lot of money by paying your contractor’s subcontractors directly instead of through the general contractor.  It never hurts to ask.  Doing so will help you skip the middle man mark ups.
  5. Demand itemized bids from your contractors. Ask who will work on your project. Will the individuals be employees or subcontractors? Obtain a list of all subcontractors and suppliers who intend to work on or deliver materials to your property.  Demand itemized bills from the contractor at each payment period too. Compare these bills with the amount of work performed and the itemized bid you received at the beginning of the job.
  6. Don’t pay up front for work that has not happened yet.  Deposits should only be made for special order non-returnable items that a contractor may have to purchase for your job, or when your state law requires it.
  7. Like negotiating for a new car, state your low budget and then stop talking.  Make him or her squirm and have to discuss making a lower offer.  Or, just say that their offer is not good enough and then still not say anything else.  The first one to name a price generally comes out paying more than the other would have said. 
  8. Being flexible about the timing of your projects can help save you money as well.  Work on the exterior of your home is usually cheaper in the fall, and interior renovations are sometimes cheaper between January and M arch when those types of jobs are slow.
  9. Ask your general contractor to ask his subcontractors to lower their rates instead of asking the general contractor to lower his.  No matter where the money comes from, most people are more inclined to help if they can keep the appearance of helping you work with others instead of just attacking the general contractor.  Treat your general contractor as an ally or a partner, and you will both come away with a positive experience and savings in your pocket.
  10. Don’t forget that your greatest power is that of walking away.  The contractor needs your business way more than you really need that granite countertop.
  11. No matter what, do not issue final payment to a contractor until you are satisfied with the work. 

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{ 2 comments… read them below or add one }

kim P. September 1, 2009 at 8:59 pm

As a certified building contractor, I agree and disagree with the your article. I do agree that it will save the owner money to pay for and pick up their own materials for the job. Just be sure you have a good understanding of what and how much of an item to get. It might cost you more if you hang up work because you didnt get the right stuff or enough of it. Also, by all means pay the subs yourself. Just remember that a true contractor will carry liability insurance. If you pay for the sub yourself, make sure you are sure that the contractor will still maintain responsibility if the subs dont do the work the right way. As for haggling for a lower price, the old “I have a small budget” is an old one and while a contractor is prepared to fight for your business, a good contractor knows what he is worth. If you get one that bids so much lower than the rest you gotta ask yourself why…why are they so desperate?

Micheal Pinney  January 22, 2015 at 12:23 am

Nice post.. If you look for a general contractor or you want to remodel your bath visit our site at ghannawi.ca. We are the no.1 general contractor in North York and GTA.

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