SELECTING A CONTRACTOR

The dilemma

How to select a contractor

Questions to ask references

Questions to ask contraactors

Buyer beware

Horror stories

BUYER BEWARE

WHAT YOU SHOULD KNOW BEFORE STARTING A REMODELING PROJECT

There are many skilled and honest contractors for sure, but there are also some contractors who are just inept and even worse, there are some who are scam artists. Statistics gathered by the Better Business Bureau show that the home improvement industry consistently ranks at the top of the list for consumer complaints.

So, how do you tell the good ones from the bad?

As you read through this you will see how most of the serious problems come down to money, or lack thereof. Although many contractors may be highly skilled craftsmen they may be poor businessmen, poor money managers, or just plain irresponsible. Ultimately, they run out of money and it has a seriously negative impact on your wallet and peace of mind.
 

THE FIVE BIGGEST SCAMS AND SHORTCOMINGS TO AVOID
(AND WHY IT WON’T HAPPEN WITH REMODELING ALLIANCE)

1.THEY TAKE YOUR MONEY AND RUN

It does not happen often but it certainly happens enough to be concerned about. These people are predators. The contractor may appear to be reputable and is very pleasant and personable through the entire bidding process. He promises the world and the price is unbelievably low so you sign up with him. He requests a significant down payment and will sometimes have some material delivered to your property to put you at ease. He may even start some work such as demolition. Once he gets the large payment and it clears the bank, suddenly you don’t see him anymore; he won’t return your calls etc. Then you come to find that the material that was delivered was not paid for and you are responsible for that cost, or the laborers and tradesmen haven’t been paid and are putting a lien on your home. Plus, your house is left torn apart and exposed to the elements and any work that was done was probably sub-standard and must be re-done. These are the horror stories that you see on tv and read in the newspapers but for every one that you read about there are countless others who suffer in silence with no place to turn and not enough money to continue with the project as planned.

Reasons For This:

There is a bad element in every sector of every industry. It is often difficult to tell these scam artists from the respectable businesses without a good investigation.

Our Solution:

We do not take large down payments (ie. $35,000 down on a $85,000 job) but rather our payments are spaced throughout the length of the project. Additionally your check is written directly to our Escrow Account and payments are only allowed to be released as per a release of funds schedule. If needed, you also now have the power of the attorney general to act on your behalf instead of taking your chances and in civil court.

2. THEY WALK OFF THE JOB

One big complaint we hear about is how many times contractors just walk off the job. The burden is now on you to try to locate another company to finish the project and in the interim you are living in a disaster zone. This is usually compounded by the fact that you lose time trying to get the contractor to come back and then determine your legal and financial alternatives to resolving the situation. You may not lose a lot of money out-of-pocket but chances are that the work that was completed leading up to the walk-off, was sub-standard and will need to be redone as well. You should also expect to deal with unpaid sub-contractors and material suppliers.

Possible Reasons For This:

a. They bid the job too low (inaccurate estimates) and at some point they realize they don’t have enough money to finish the job so they work until the next payment or ask for money ahead of schedule and then disappear.

b. They caused damage and do not have the proper insurance to cover the claim so they walk-off, cut their losses (especially if the damage is more than the potential profit on the job) And they don’t pay their help. Sometimes they just don’t want to use their insurance because they have too many claims filed against them already and their policy will be cancelled.

Our Solution:

Unfortunately, there are not a lot of contractual clauses to provide effective legal recourse if this occurs. Here is where your due diligence pays off in properly investigating your contractors before making your final selection (how to select a contractor). Because we hold your money in escrow you do have the ability to recoup any loses. We have a perfect track record and have never walked-off a job.
 

3. MAJOR DELAYS

This is another big complaint we hear about contractors. It is frustrating to live through a project that often doubles or triples in length of time. It creates a very stressful and therefore unhealthy environment, negatively impacts the contractor/homeowner relationship to a point of hostility, and creates hardship on your part especially if the completion of the project was planned around a specific event in your life. It also causes greater financial hardship due to displacement or inability to fully use your home. Even the best job is soured when needless delays occur.

 

Possible Reasons For This:

1. One reason may be that a sub-contractor does not show up as scheduled and the contractor, because of a poor or missing agreement with the sub, has no control or re-course and can’t hold them accountable to the job.

2. The contractor is short on money so he bounces back and forth from another profitable job to help cover his expenses.

3. He may have overscheduled himself and does not have enough forces to handle all the jobs so rather than walk-off your job he bounces back and forth, sometimes with weeks passing before you see him again.

4. He may have a problem with another job and has to leave yours to finish the work.

5. He may need to start another job to get a down payment to keep the cash flow, because he bid your job too low.

6. He is a poor manager and does not properly plan, schedule or order ahead, so delays are caused at each milestone of construction.

Our Solution:

1. We provide "Guaranteed Completion Dates" in our contracts. There are also penalties written into our contracts so we are financially penalized for every day that we go beyond the completion date if we are responsible for the delay.

2. The estimating system that we use allows for accurate pricing so we don’t underestimate the cost of your project. This allows us to stay solvent so we don’t have to play financial juggling games.

3. We have key people in place to handle any warrantee work so we can make repairs as needed to past projects without interruption of your job.

4. We pay more for qualified workers so we limit our exposure due to incidental damage. There is rarely a need to go back to past jobs for repairs.

5. We only take as much work as we can handle with the workforce we employ, which can be proven by speaking with past customers and checking our performance record with the BBB or consumer affairs department.

 

4. SURPRISE EXTRAS

Hidden costs, up-charges, and cost overruns

Many times a homeowner enters into an agreement with a contractor assuming that the estimate is a firm price. Unfortunately, they don’t read the fine print and the contractor has the ability to charge for items not spelled out in the contract. Frequently, the contractor takes advantage of unforeseen circumstances and racks up large additional costs that should have been included in the initial estimate. Secondly, most homeowners are not experts in construction and do not know the right questions to ask to compose a detailed estimate or to know when something is missing, and again the contractor has the opportunity to take advantage of the situation. These extras turn out be worse than initially selecting the higher bid because you are not prepared to quickly secure more financing and then big problems ensue. If you were better informed you would have had the opportunity to redesign your project to make it more suitable for your budget.

There are certainly going to be times that additional costs are legitimate. Sometimes existing problems with the home are only found after the work begins, but it should be the contractor’s responsibility to alert you to suspected possible circumstances prior to the start of work.

Reasons For This:

1. Some contractors do this unintentionally. They don’t know how to prepare an estimate and don’t ask the right questions so they miss too many things.

2. Many contractors use this as a ploy to get the job because they are the low bidder. They know that they can make up their shortcomings on extras and change orders. In fact this is so prevalent that the industry has coined a term for it called "making the profit on the back end." Unfortunately, it has become an accepted practice.

Our Solution:

1. Our contracts clearly indicate potential circumstances in which unforeseen site conditions may elicit additional costs. We identify these conditions and can provide some ballpark pricing of the potential costs for such an occurrence. This allows you to budget some additional funds if needed or reassess your scope of work.

2. We can put a cap on the total amount charged for unforeseen extras which help limit your liability.

3. We only charge straight time and material for unforeseen issues with no profit mark-up. We are not looking to make our money ìon the back endî but rather are trying to help you through by limiting your added expense.

 

5. SHODDY/INCONSISTENT WORKMANSHIP

It goes without saying that this is the number one complaint we hear from homeowners regarding contractors, although over 95% of these grievances never get filed with the BBB or other supervisory body. Sometimes the complaints will be about small but numerous workmanship deficiencies, or work practices which are not enough to justify a formal complaint, but they are certainly enough to sour the relationship. Other deficiencies in workmanship are so severe that they make the finished result ineffective, aesthetically unappealing, unsafe, and doomed for product failure.

Possible Reasons For This:

1. Does not pay the wage needed to attract and retain competent craftsmen.

2. Hires the least expensive help to keep his expenses as low as possible so he can be the lowest bidder to get the work.

3. Does not care enough about quality and is only interested in finishing quickly because the sooner he finishes the more money he makes per day.

Our Solution:

By reading our solution I believe that you will understand and appreciate the level of commitment toward preventing this pitfall through our management strategies and supervision protocols.

 

AND HERE ARE EIGHT OTHER CONTRACTOR SHORTCOMINGS
YOU GET WHAT YOU PAY FOR – THE REAL COST OF DEALING WITH THE LOWEST BIDDER
 

1. NO SERVICE AFTER COMPLETION OF JOBS FOR NEEDED REPAIR

A big frustration for many homeowners is trying to get their contractor back after a job has been completed to make repairs or adjustments. Many times the relationship is severed before the job is completed and getting them back is not even an option.

Possible Reasons For This:

1. The contractor knows the problem is worse than the homeowner is aware of and can’t afford or is not willing to spend the money to correct the problem.

2. They are not capable of making the repairs themselves and don’t have the money to pay another person to fix the problem.

3. They are on another job and can’t leave that paying job to fix your problem (they will lose the day’s pay or more). They make so little that they must get the monetary draw each day.

 

2. UNSAFE WORK ENVIRONMENT

Often overlooked by homeowners is the value that a contractor places on job safety. This should be of extra special concern when they are working in and around your home while you are living there. It could simple things such as protecting the home from airborne allergens or toxic fumes to safeguarding the tools from your children and pets, all of which can quickly turn a pleasant experience into a nightmare. Some examples are:

Dangerous off-gassing fumes from high VOC products

Unsafe scaffolding and subsequent falls

Injuries caused by falling objects

Nail punctures and other foreign objects in feet and tires

Falls into open trenches

Poor interior protection from elements and subsequent damage

Leaving the home unsecured and vulnerable to break-ins

Injuries to employees, neighbors, etc. and subsequent lawsuits caused by these unsafe work environments might have to be shouldered by you if the contractor does not have adequate insurance to cover these claims.

We have protocols in place that create a safe working and living environment.
 

3. DESTRUCTION OF PROPERTY

Unfortunately, no project runs perfectly and there is always a risk of damage to your property. Accidents happen. You hope that your contractor is willing to repair the damage or carries the proper insurance to cover these damages. If not, the result is that you usually absorb the cost of the repair and sometimes lose irreplaceable items. These accidents tend to occur more often with low budget outfits that have:

1. Inadequate or no safety training for their staff.

2. Little or no safety protocols observed.

3. When working very cheaply you tend to try to work fast and are looking to cut corners, so safety tends to be a low priority.

4. Some people just have little respect for the personal property of others.

We have protocols in place to reduce this risk.

 

4. MESSY JOBSITES

An inferior contractor is not willing to spend the extra money or time that it takes to properly protect your property from damage and has even less concern for cleanliness. Oftentimes, shrubs are damaged, tree limbs are broken, the lawn unnecessarily destroyed, work debris blowing onto neighbors property, food waste left exposed attracting rodents and insects, cigarettes butts spread all over the property, trash buried in the walls and floors during construction, dust allowed to spread into non-work areas, stepping over your personal items rather than taking the time to relocate them. Sometimes there are workers with poor personal hygiene and habits. Some people are willing to tolerate this behavior to save money but we believe that this is unacceptable and go to great lengths to provide a clean and safe working and living environment.

We have policies in place for this and penalties for non-compliance.

 

5. OVERPROMISE AND UNDERDELIVER

It may be difficult to separate the fluff from the real stuff. A slick salesman may paint a pretty picture of what they can do for you. Routinely, low bidders will have many ways to save money including cutting corners and they are good at talking around a situation to justify or rationalize their inadequate work.

We have protocols in place to inspect and correct deficiencies in workmanship.

6. BAIT AND SWITCH

You may have thought you found a contractor you can trust, you have a good feeling about this person and have faith in the person selling you the job but once it starts you don’t ever see that person again and the people who are in your home are not at all what you expected. There are many contractors who do not have an ongoing working relationship with their workers and they may have in fact been hired for the first time for your job. Worse yet, you may find yourself having to schedule tradesmen, point out defects, and clean up after them.

Our management and supervision policies and protocols prevent this from occurring.

7. UNETHICAL PRACTICES AND BEHAVIOR

The wrong people in your home can lead to disaster. We are always hearing horror stories from customers with unscrupulous contractors. Some of the problems include rude and threatening dispositions when confronted with a customer’s concerns, pressuring homeowners into early payments or extra money without entitlement, theft of personal property and money, and even violent altercations. Regularly, we have heard about contractors who sabotage the job because of a falling out with the homeowner.

We have hiring policies and ethics standards that prevent this type of person from being in your home.

 

8. POOR MANAGERS

Even good craftsmen can falter and fail in this business if they are poor businessmen or managers. Many guys can handle a small project when multitasking is not required but once more than one project is running simultaneously or if other issues arise with the current project, they falter. It is difficult to wear many hats and the responsibility proves to be overwhelming, especially if they do not have programs in place to help with this coordination. Subsequently, material is not ordered on time, they forget to schedule tradesmen, and countless other details that cause poor working relationships, major job delays and cost overruns which they pass on to you. Because they don’t have time they do not stay abreast of the new building codes and practices as well as new product availability and product installation procedures, therefore the advice that they give you can be inaccurate and or costly.

We have sophisticated management tools and protocols to effectively manage every aspect of your remodeling project.