You're about to discover 7 things that you should NEVER say to a contractor; or said another way; here are 7 common ways that contractors can screw you. Whether a big or small job, hiring a contractor is serious business and you must adhere to the following guidelines in this video or else you stand a good chance of being taken advantage of. You'll learn real world wisdom on hiring and dealing with contractors as well as get free access to a contractor agreement which can help you avoid some of the pitfalls that so many other investors experience.
If you're looking to hire a contractor for a job, big or small, you need to read this blog. I am going to educate you on how to develop a fair relationship with your contractor. Contractors can be a source of a lot of stress and anxiety in the world of real estate. They can be masters at extracting the maximum amount of profit, while putting in the least amount of work.
I want to share some important information to ensure that you're in a mutually beneficial and fair relationship with your contractor. This information might offend some contractors, but that's a small price to pay, for sharing the truth. I have been a part of transactions involving hundreds and hundreds of different contractors. I have also been screwed over by a ton of them, which makes me uniquely qualified to educate you on what not to say to contractors.
Seven Things to Never Say to a Contractor
1. Never Tell a Contractor They are the Only One Bidding on the Job
Always get a minimum of three bids, in fact, the more bids you get the better. Separate each bid into the cost of materials and the cost of labor. This will help you tremendously when comparing each contractor.. Don't ever tell a contractor that they're the only one bidding on a job, because that gives them too much power. You need to lead them to believe that you are considering many contractors for a job, so that they are held accountable for their bid.
2. Don't Tell a Contractor Your Budget
If you tell a contractor that your budget is $20,000 they will find a way to make their bid $20,000, even if it should be lower. Instead you should have them provide a bid for the work you need done, so you can compare the cost of material and labor with other bids, to make an informed decision.
- Cost of Materials
Be aware that many contractors will upcharge you for the cost of materials. It is important to independently verify the cost of materials after receiving a bid. I have had contractors look me right and the eye and inform me that material cost is $850, when I know for a fact the cost is only $550. I refuse to hire anyone tat will lie to me about the cost of materials, so I always verify costs.
3. Never Ask a Contractor for a Discount if You Pay Upfront
It is an extremely stupid to offer to pay a contractor the entire amount owed upfront. If you pay a contractor upfront, they can end up not doing a good job, or some will even take your money and disappear.
I have actually seen some real estate traders on Youtube teaching people to do this in order to save money. It is very dumb advice, because you have to be very careful about payments to your contractor. You will have to pay some money upfront to cover the cost of materials, but I actually try to work out deals where I am purchasing the materials myself. I dont trust contractors to buy the materials for me, because in the past I have had issues with contractors using leftovers from prior jobs, or purchasing cheaper materials then requested, thus scamming me out of money.
Now, there might be some attorney's reading this, that would argue that the moment you purchase the materials, you are crossing the line, and the contractor can now be considered an employee. I find this theory completely bogus, because the contractor owns a contractor's license, and work with many other clients. I have the right to purchase my own materials, so that I know they are purchased correctly.
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Paying a Contractor
Personally, I give my contractors a little bit o money upfront, and then pay them over the course of the job as it is completed. I always save the final payment for after the job is finished, in order to protect myself from being scammed.
About a month ago, a hurricane began to approach Florida so my family and I decided to evacuate early, in order to get ahead of traffic. I own a large home, so I hired someone to put approximately 50 hurricane shutters up around my house. When it came time to leave, he was only about 3/4 of the way done, so I ended up paying him before he was finished. This resulted in me being screwed, because he never put up the rest of the shutters once we left. I had to get real serious with the guy I hired, and was able to get some of my money back, but I consider myself lucky for that, because some contractors just disappear after they screw you over.
So be advised that if you pay somebody upfront, there is no guarantee that they will finish the job. Don't give a contractor their final payment, until after the project has been completed.
4. Don't Tell a Contractor That You Aren't in A Hurry
If you tell a contractor that there's no rush to complete your project, they will give your job the lowest priority possible. They will take on other jobs and spend their time doing other things, besides getting your job done. You need to communicate timelines, and actually chart out the weekly expectations you have in terms of job completion. Be sure to set dates and deadlines, and let the contractor know that they will lose money if the job is not completed within a reasonable amount of time.
Never tell a contractor that you're not in a hurry, or else your project can end up delayed more and more, until you are pissed off and losing money.
5. Do Not Let a Contractor Choose the Materials
It is very important that you make the decisions on the exact materials you use for your project. With each type of material, there is a high end product, low end product, and something in the middle. Educate yourself on the difference between each type of material, so that you can choose based on your needs. If you allow the contractor to make all of these choices for you, they can really screw you over. They could use materials from other jobs, choose materials that are too expensive, or even too cheap.
In my contract with my contractors, I specify which materials they are to use. Picking the right materials can make all the difference in the world. If a contractor picks the wrong materials, the project is bound to go wrong.
I need you to choose the materials. Be specific on what materials they purchase, where they purchase it, and the price they pay for it.
6. Never Hire Anyone Illegally
Some contractors might offer to bring in people that aren't legally licensed to work on your jobs. You should never hire anyone that does not legally have the ability to do the job. If you are not diligent when hiring a contractor, you risk a huge liability if someone is injured. Make sure that the contractor is licensed and insured, and has evidence of an insurance policy. Be aware of any subs brought in by a general contractor, to ensure that they are covered under their policy.
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General Contractors
You must be critically careful that the subs hired by the general contractor are getting paid.I always pay the subs directly, because if you only pay the general contractor, there is no guarantee he will pay the subs. If the general contractor does not pay the subs, you could end up with a lien filed against your property. Always pay the sub contractors yourself.
7. Don't Agree to a "Gentleman's Agreement"
Always, always, always put your agreement with a contractor in writing. I don't care if it is a simple, one page piece of paper, just get the deal in writing. I have a link where you can download a copy of a contract I use with contractors. It is very simple, and ensures, that you and the contractor both understand what you are agreeing to.
Having everything in writing has nothing to do with trust. It helps ensure that everyone is on the same page and remembers what the agreed terms are. So that months down the road, we don't start arguing to what we agreed to in the beginning. I write out very detailed contracts, with my exact expectations and a list of all expenses.
If you decide to let the contractor purchase the materials, have them provide receipts to prove each material cost.
Conclusion:
Those are the seven things to never say to a contractor. They all might seem like pretty simple guidelines, but they're a lot more difficult to practice in real life. Oftentimes, we get busy, and try to take shortcuts in life. Do not take shortcuts with contractors or you will regret it. Take the time to do things right, and be very careful when working with contractors.
A lot of contractors actually have a criminal background. This doesn't make them bad people, it is just important to know someone's history from an ethics perspective. If you do not fully understand how serious working with a contractor is, you will get taken advantage of.
On the opposite side of the coin, don't try to screw over your contractor. It is very important that the people you hire make a profit. I actually have a great video that further explains why making a profit is a good thing in business.. I encourage contractors to make a profit, just not at the expense of you.
Is it possible to file a lien against a roofing company that owes a customer money for not performing the work that was contracted?
You’d have to sue and get a judgment that you could then record against any assets that roofing company may own.
All the information that you shared with us is very useful for us. Keep sharing.
Also, never believe a contractor when he says an inspection wont be need or he will schedule inspection. Schedule insoection yourself!
What do you do when a contractor e-mails you a statement and adds several fees for things never talked about or agreed to? Contract says any additional works will be done by Change Orders in writing and texts are considered as Change Orders. However, we’ve never talked about these fees, signed any Change Orders not texted about these items he’s billing us for. Plus he’s ruin all of our mattresses by putting them in a shed he kept open and now we are having to replace them. Mattresses are not cheap. He has taken it upon himself to put our belongings in a shed and now wants to charge us $500 for putting it in the shed and another $500 to bring it back in. The original agreement was us to put everything in one room. He chose to move it all out. I feel very taken advantage of. We are older and I’m handicap. Not like we are physically able to bring our things back in ourselves.
He’s billing us $900 to put our blinds back up that he took down. This was never discussed.
He’s billing us $400 to open the door for Lowe’s to bring in our new appliances.
The list goes on. He is already 8 weeks past his quoted expected completion date. We can’t seem to get him to finish the job we’ve hired him for.
Can we hire a different Contractor to complete his work and take it out that cost from the final payment we owe him?
Can we charge him for the mattresses he ruin?
I want to do the right thing.
I have a friend, who recommended a guy to me who does painting and tile work. I wanted him to paint the inside of my condo and do a tile backsplash behind my kitchen sink.
He’s not a professional contractor he just does side jobs.
I paid him $2500, upfront, because he was having “hard times.”
He wrote me a receipt, “paid in full.”
He did the trim work In the office he used the wrong color. So he had to do over again with the right color.
When he did the trim work in the bedroom and bathroom, I didn’t like the color was too dark. So he had to do that over again, my fault. He never complained. He never said I have to pay him extra because he had to do this over.
He did the backsplash tile work over The kitchen counter and sink. When he was finished, he didn’t allow for the plugs and covers, so it is messed up. Now he refuses to fix it.
I’ve tried to get a hold of him through phone calls and text messages. He does not return my calls or my messages. I sent messages at night, because for two nights I have not been able to sleep. When he finally responded, I said “now I have your attention! “
He then called the friend that recommended him, and slandered me. Telling my friend i was a nutcase! She in turn sent me a message and told me she didn’t want to be my friend anymore.
Even though I paid in full I told him I would pay for the redos. He didn’t respond to that he didn’t want to hear it. I in turn, fed him, picked him up and took him home, gave him curtains for his rental home, basically catered to him. That’s what I do, from my heart not because I have to.
I am 77 years old, worked 33 years, on Social Security, and running out of money, so I have applied for some assistance. He in-turn, slandered me, and told my friend
I was cheating the system and taking taxpayers money! That I was a con!
I’m am now scared and afraid of him, I live alone.
One thing I cant agree with here is when the author says not to hire a contractor if they upcharge material. Everyone reading this article needs to understand that’s standard practice. Contractors who bid a job based on time and material will mark up material costs because thats how they cover the time and money they spend to go get it all. The gas they use, loading, unloading, standing in line, etc. If you dont want to pay mark up on material costs, then purchase and aquire the material yourself and make it accessible to the contractor when they begin the job.
I really enjoyed it, and I appreciate you sharing it with us. You have a fantastic picture and have presented this information really well.
Not a bad article. I am a painting contractor. I try my very best to do whatever I agree to,to the very best of my abilities. Can you make an article on how to be a good customer? I have been in business 30 years,and I can tell you,things are not like they used to be. There’s a such thing as being a bad customer. 15 years ago,I wouldn’t have dreamed of asking for a deposit,vut,but, face it,people have changed. I had people pull all manner of changes,leave me without access to the job for weeks while they travelled,traveled, try to get big extras without paying for them,while holding payment until it was done. We take a huge responsibility when we agree to nurture someone’s home. People should be reminded of how to be fair.
I love your comment! I wish someone would have touched on more of the “what not to do” examples. I have never had a house built so i don’t know “right from wrong” and the last thing i want to do is upset my builder and not realize it.
Contractors and Builders LOVE for people to fear upsetting them. Don’t worry about upsetting them. You are the boss. You make the rules, not them.
You’re absolutely right. I’m a Licensed contractor in Nyc 10 years. i deal tremendously with home Depot because of the veterans discount they provide to us that also takes a load off the customers material. I have them itemize the material and give me a detailed receipt. I also ask the customer to do the same at any location they wish. once done we both compare and go with the cheapest. For some reason”Veterans Discount” i always win.
Well this is awesome post and written very well. Your point of view is very good.
i wish I would have read this earlier. I am having a small side porch replace a deck. The contractor asked for 60% down and I was smart enough to only give him 1/3 but he cashed the check as soon as he left my house on 3/25 ($3600). It is 5 weeks later and he has only shown up 3 times when he does he stays only 2 hours and leaves. When there was a delay with him starting, he said the town was delaying the permit so I called the town and was informed that the paperwork was never submitted. There is a pile of junk in my yard for 5 weeks with no sign of building or new materials being purchased. . I guess the first clue should have been that his company truck is an old broken down school bus. I feel very stupid.
I’m having a nightmare of a time with a contractor for my deck. The old wooden deck was supposed to be replaced with a composite. I live in an area where it’s hard to get contractors. I gave him 50% down. When he started i got nervous. I wrote down the color i wanted. He got another. I’m pretty sure he didn’t give me the brand he said he would. It doesn’t look like the websites pictures. I got nervous about his behavior so i contacted the inspector. Turns out he didn’t get a permit. Where i live, he is responsible for it. The inspector came out to see if a permit was needed and told him if he does x and y (to meet code) the inspector wouldn’t require a permit. I was concerned by what the contractor was showing me and claiming was finished, so i asked the inspector to return. Turns out the contractor did some stuff that wasn’t discussed that the inspector thought should have a permit. The inspector said, if he could bring it to code, he’d let the lack of permit go. The contractor said he would make the changes that day…He didn’t. I’m worried he’s going to corner me and try to get more money out of me. I’ve already paid too much for the job he did. My only leverage i have for him to finish is the rest of the payment and the inspector at least trying to get it to code. Can the contractor quit? Can I fire him? The contract was unfortunately vague. This is my first time dealer with a contractor. I feel stupid.
I’d like to add that I really want this guy gone. He is asking me to pay for things that are his fault. I’ve already paid more than what everything cost. I even paid extra for the initial additions the inspector required. His personal financial woes are his problem
What if I asked a contractor for a bid and now he’s telling me the city might be out to look at what I’m going to have done …… Should I be concerned? He don’t even know if he has the job yet!
Is there a reason he contacted the city? I know I’m going to need a permit for the driveway or approach!????
Our contactor never went over the details on what type of windows, toilets, tub, insulation, plumbing, etc that they were going to use. They just gave a vague list and as we move along the project, I’m forced to give them the Spanish inquisition which causes animosity between us and I don’t like that. To me, I am their boss and thus what I want, should be what I get, given that it all goes to code and so forth.
Recently we were asked to choose which way we wanted our windows to open. I requested a link to the manufacture of windows that we will be receiving as we had no idea. When the builder gave us a link, we selected what we wanted and sent off the information as soon as possible to prevent any delay.
The builder responded with “you can’t have those double-hung windows as we already have a “window schedule” and they don’t meet the egress requirements. Two issues arose from that reply: 1. Where is this said “window schedule” as we did not see it in our submittal packet with our architect and structural drawings. 2. what the heck is an egress? I googled that one and I think I understand it.
Then we had a back and forth messaging on how now we, the customer, is causing a delay all because it was not communicated about windows from the get-go. The builder then sent an apology message on how he gave us the incorrect manufacture. He then directed us to Vista Windows. We looked at the list of the windows by Vista and then made our selection again.
Tomorrow we have a zoom meeting and I’m hoping we squash this window debacle and that the builder heeds to our preference, especially since there isn’t a “window schedule” in our submittal package to the city.
Contractors love to keep the original plans vague; it gives them much more wiggle room.
I am so happy I found your blog and I absolutely love your information about the 7 things that you should never say to contractors and the tips you have shared are awesome. I liked and it is wonderful to know about so many things that are useful for all of us! Thanks a lot for this amazing blog!!
Really good information . Thanks for sharing with us. Good to see this kind of informative blogs nowdays.
Hi. great information. How do I pick which materials I need for a full bathroom remodel? Do I have the contractor tell me where to purchase the items or create a list of what I need to shop for?
I had a vehicle slam into my house in April 2020. The foundation, siding, deck, and the yard needs repair. $78,000 job. I interviewed and got proposals from 3 contractors. As we walked around in July, the one I chose, I told him I wanted the job done by 1 Sep and asked how many people would be on his crew. He said at least himself and two others. When we were at signing, I said I don’t see the end date, and I don’t want this job to go on forever (let alone into winter). He agreed to send me an email with a September end date. By August, no email, and I asked him about it, and he said he never agreed to September, and “I can sue you for dictating my work.” I said, J***, we talked about this at signing, and he said, “I don’t recollect that conversation.” I was so mad!. His work is impeccable, but he is slow and, most times, has no help. My house has part of the siding off, partially wrapped in new house wrap and partially wrapped in old (it rained Monday) and no work since last Friday. Now I walk on eggshells because I am worried he won’t finish if I inquire about the hours and/or his coming back. Can he sue me if the contract didn’t have the hours, days, end date, etc and I push for his working M-F, 6 hours a day? How to I push for an end date? He is a nice guy and does excellent work, but I’m not sure if he is walking all over me with the job’s slow rolling.
These are some great things about the 7 things you should never say to a contractor this have discussed here. I really loved it and thank you very much for sharing this with us. You have a great visualization and you have really presented this content in a really good manner.
I wish I read this prior to hiring the floor company in my home. They damaged my water heater drain pan, which caused a minor existing leak to spread to the floor. I took the opportunity to replace the old unit altogether on a Saturday. I planned on a water heater upgrade along with toilet install. However, the drain pan puncture forced me to pay emergency same-day plumbing services.
On Monday afternoon baseboards were installed and my new water heater was dented at the base, the new drain pan was warped, and new hoses were bent due to proximity to the wall. I now have a second round of emergency plumbing services.
The floor company is licensed and insured, but not bonded. I want to be fair but I am just in complete disbelief. What portion of these costs should they pay for?
I recently hired a contractor without a contract and he gave me a price $750.00 I though it was high but I couldn’t find a carpenter quickly before my carpet got installed. They came and did such poor work it was imbarrising I confronted them he got verbally loud took a fit didn’t finish the work it’s all crooked a staircase and sent an invoice 2 days later for 1900.00 with a threat that if not paid in 30days he will sue me I have not paid anything as of yet what should i do
Very Interesting article! Thanks for Sharing
This is all great information; unfortunately I found it too late. We survived Hurricane Michael 2018. When we started the process of finding a contractor they all wanted to see the insurance claim 1st—is this normal they don’t know how to write an estimate. The contractor we hired seemed sincere and stated he had worked with hurricane claims (found out later he was a storm chaser working under a local contractor’s license) and wanted to be sure all damage was covered. After almost 18 months we have just okay repairs. The contractor increased the costs of things quoted because he did a really bad job on the drywall and spent an extra 10 days trying to repair…doesn’t look any better. He never completely finished window installation, window trim, door trim, told us it was cost effective for him to paint the house or install the rock on the gable. What a lesson this has been…. Monday through Friday we work on repairing the things he did and completing the things he did not do. We are in our 60’s and so tired we try to get a breath on Saturday & Sunday. More times than not we wished we would have just walked away like some people did. Never thought dealing with a contractor would be worse than dealing with the insurance company.
My friend told me that he would like to build a house on the bare land that he owns but he wants to have in mind how much he would need to set as a budget. I like how you suggest asking for different quotes from different companies so that he can have an idea.
First, he needs a list of home builder that are active in his area. To do that, he needs to research the building permit records for the County that his land is located in, to collect the names of all home builders that are building a house in the County, say within in the past 6 months. Next, he needs to Google their names and research reviews from people who have worked with those home builders. Next, using the building permit records, he needs to drive by those houses that were built by builders with the best reputation. Then, he can reach out to at least the top 3 builders to find out what it typically costs per square foot for them to build a house (or the level of quality that he is considering). If your friend references a few houses that he drove by that the builder had done in the past, that would be the easiest way to get a gauge on what it cost to build for the houses he saw.
I did all I could think of to protect myself from getting screwed before hiring a person to add on to my already existing retaining wall — but got screwed anyway. Well I found someone to do the work. I hired the guy and he and two other guys built the wall. It turned out a mismatched color, not straight, broken bricks, loose bricks, feels like it could fall over, bricks don’t align and it’s tipped. I am so dissapointed. I asked a lawyer what recourse I have to get my money back and he told me probably none. Seems the law favors the side of the contractor. I can’t imagine looking at this unsightly sloppy job they did for the next ten years. I don’t know what I’m gonna do.
If contra tours are licensed you can report contractors board.
Excellent written article! I have been put in a horrible situation with a paving company. I called them on 3/27/20 to come out and give me an estimate to blacktop my driveway. On 4/1/20, said paving company met with my husband and informed him of the cost. He told my husband the cost was only good for this day since he had another job in the area. My husband told him okay, we will get back with you. Husband called me and said estimate was way too expensive. I called the guy back within 5 minutes of him meeting with my husband and relayed this information to him; and also that we were getting other estimates. He said okay. Roughly three hours later, I get a phone call from the paving company telling me he has completed my driveway and asked if I could leave a $4,000 check in the door. I thought it was an April fools joke, but it was not. I’m appalled that what should have been an estimate, turned into a $4k decision made for us. There was absolutely zero written, nor verbal authorization given to do the job. All talks and correspondence were done with the same individual. While I am a fair person, I do not appreciate being forced into something I did not ask. I have no clue on what we should do. The only feelings I do have is anger and feeling taken advantage of.Thanks for reading.
Sounds like you could have gotten a free driveway. I hope you didn’t pay them.
I truly wish I’d of seen this video before I had signed a contract. I made everyone of those mistakes. People insured feel immune from being screwed. I’m living proof that anyone can be screwed.
Please add a #8 to your list about Contractors who tell you their over charging to cover something denied & using the term “Legal Loophole” that screams they’ve probably sued other home owners & have been sued many times. Suffering a significant loss from a hurricane makes people an emotional wreck & we just want our home repaired. Realistically like taxes were responsible to know what we’re signing even though I though my insurance company had my back. They should of informed all their customers that the fastest way to getting a claim paid was by having a Contractor do an estimate of damages & the cost to repair.
My entire claim almost ended up being denied after my claims representative told me I was purposely dragging the claim out to maximize payment. Fortunately I paid for my roof out of my own pocket once I realized it was gonna take months for them to pay this. I was hurt & pissed. The 1st contractor got in over his head taking on to many homes on at one time. The 2nd took me 45days & many calls to find since most were booked solid & even their waiting lists were far into end of 2019. Then I found another contractor who had several locations I was happy now the work was going to finally be completed. Wrong! Other than a small pack out in June nothing else was done. The contractor told me that due to who my insurance company was they’d need to wait on approval to repair. Once again my insurance carrier said the claim was being dragged out causing further damages to maximize the claim. Then the estimate & cost to repair issues began. Later I found out my contractor was trying to maximize the amount to rebuild & put in rooms that were unaffected. From July till October there were 4 more estimates that kept having to be revised before some of the approvals were given. The contractor showed up in November to start demo work but then they left it uncompleted. They insisted on all approvals before they’d return. I asked what was missing he said the approval to rip out the entire kitchen & I about died. The kitchen had no damages! Plus he mentioned as of November they were owed $77,000 on work done at my home. What work?? Seriously the 3 worst rooms cost $5450.00 to demo right after the hurricane so all they did was a little more drywall, floors & ceilings. Plus they weren’t getting paid because they didn’t send in the 1099 etc to my bank & nothings getting paid without that. Finally 2wks ago I received a check for about 65% of the entire approved claim which has to go to my mortgage company. I let the contractor know the money is there. Still he hadn’t turned in his paper work after I’d asked many times. The contractor got mad at me because he wanted the entire check upfront & I told him even if I could do that I wouldn’t. Seriously I can’t force him to do his paperwork & I made him tell me how long it would take to finish my job he said 6-9months most likely a year depending on payment & the missing approvals. I said why can’t you at least complete the upstairs & he told me it’s all or nothing. Thats when I told him I was calling my attorney.
I have a handicapped daughter that I take care of & we’ve been living in a camper behind my home since the hurricane. She attends school & a special center designed to help people with disabilities. My daughter freaks out when not in her own home & will escape during the night. I did what was in her best interest & got an RV my insurance refuses to pay for. I have No regrets about doing that but the money came from my retirement. The night mare just has to end. My home is 1 of 3 others in my subdivision who are still waiting on repairs & guess what? All 3 of us are using that same Contractor. Makes you wonder what their doing & how their staying in business. No ones been rebuilt & we all have different insurance carriers.
Can this contractor file a Lien on my property if he didn’t do what was needed for payment? Several months back I offered to pay the 1st 25% just to get this started but he refused that as well. I’m very grateful now but it makes me wonder what the end game & what’s it gonna end up costing me? I guess that’s another of their legal loopholes.
This is very good information. Question, I did everything that is suggested in this article. We got to the end of the bathroom remodel, they removed the toliet for the new flooring. Well, the found that the toilet needed a new flange, so the sales rep wanted to install it himself, since his plumber quick due to Coronavirus. He bought 2 flanges and neither worked. He asked that I contact my plumber to install. My question who should pay my plumber for his service?
It’s a very tiny aspect of the job. The General Contractor remodeling the whole bathroom should pay for it but the cost will be minimal either way.
We hired a contractor 14 months ago to build our custom home. Although the completion date estimate was 4 months ago, our home is still not complete. He has taken 3 vacations during this time period, two two week vacations to Hawaii, and one 1 month vacation to Africa with his wife to go surfing. His workers are all under 30 years old, are not supervised by a licensed contractor since he spends almost no time at the job site, therefore have made many mistakes in the building of our home. His excuse is “They can always reach me by phone”. We have had to monitor the situation daily to prevent disasters. The job site is always a total mess inside and out. The errors we caught were somewhat “corrected” per our request, but have reduced the “beauty and balance” of our home. They have spent countless hours building and tearing out and rebuilding.
We live in a gated community that requires us to give permission to those who are directly involved in the construction of our home. We’ve “caught” these workers bringing their friends, wives, children and office staff over to see our home without our permission. As gated community owners, we are deemed responsible for any problems these uninvited guests may cause. Our builder has a copy of the CC&Rs, but chooses to ignore them in so many ways.
We have had several houses built throughout our lifetimes that have gone well, but this one as you can imagine has been quite a challenge.
As seniors we really feel like victims here. Do we have any recourse? There is one draw remaining and we don’t want to pay it until all of the work is complete and correct.
Random success story about this. Needed to rip out carpet and put in engineered wood, about 1800 square feet worth. Found a contractor online. Got pricing and all that, but they wanted 100% upfront. We were literally just going to get a quote from them, but that upfront payment business wasn’t happening.
So we put it out to bid. We got I believe four other quotes, ranging from $21,000 to $30,000. The original contractor wanted $25,000. We went with the $21,000 guy, saved $4,000 and he actually told us which flooring supplier to call to order the material ourselves. We paid in three installments. He finished in two days.
You way overpaid. 1,800 sq ft. Installation costs should be no more than $3-4.
The contractor I have, we were in a relationship he was doing the work I paid him all of the money. Then he found a lame reason or excuse to get mad at me, so to make a long story short he keep saying he is sick. He got most of the Materials that is needed for the job, but it is taking forever & a day to get this job finished. Tell me what Iam suppose to do. To get him to Finish the job. Please e-mail me and let me know what steps to take. This job started jan 10, it is now march 1, and he keep bringing the stuff, but he never gets back over here to Finish up! Iam not happy at all with the way things are going.
Thanks so much for all of the awesome videos you post! We have followed for a couple of years and are doing great with investing.
Right now, I have a contractor who is asking for $1500 for a remodeling estimate for my personal home. He says it is to cover the cost of creating a 3-D walkthrough and detailed plan for the project. How common is this?
I like what you said about never telling a contractor your budget so that you can get a better deal. My sister has been telling me about how she wants to get a new store location built soon. I’ll share this information with her so that she can properly work with contractors.
I can see how getting multiple bids would be a good idea. It would allow for one to see what the average cost in the area is. I will have to keep this in mind for the kitchen remodel I want to do in the spring.
Great advice. I needed some concrete contracting done, and even though I have trust for the contracting company, it’s always better safe than sorry! And honestly I don’t think this article paints a bad picture, I think that it just reflects how people are always gonna be, wherever you look. It’s just reasonable.
Thanks!
-Jamie
Hi Phil
How is the contractor paid with a construction loan? I want to buy my own materials.
Please advice Thank you
Application for a construction loan is submitted with the Contractors bid, draw schedule, cost allocation and timeline for project. The bank will release money based on those schedules. The borrower typically pays interest only during construction.
These are helpful tips on how to work with a contractor so the project goes as smooth as possible. I want to remodel my home and we need to find a contractor that shares our vision.
Really Impressive, Thanks a lot for sharing such a helpful post.
I like how you mentioned that one should get at least 3 different bids when looking for a contractor. A lot of relatives are building new homes, so these tips could help them. Thanks for all the tips on interacting with a contractor.
Great stuff Phil. I am a GC and have found this to be an extremely awesome selling tool. May I ask your permission to include a few of these details on the FAQ section of my website? I will definitely cite my sources to include your page. Thanks in advance.
Approved
It was worth reading
There are good and bad people in every walk of life. I am a GC and we almost never participate in multiple bidding – it costs thousands of dollars. We have been in business 40 years and there are enough completed jobs to show prospective clients and lots of past clients willing to discuss the experience they had with us.
My son is a GC.I cant tell you how many times customers have not paid my son his last payment! They always make excuses or simply just dont pay it.My son is a very kind person and people take full advantage of that.Its pitiful.How does he ensure getting his last payment.He is super honest.
All that you have said is what is leading to major collapse of high rise structures in Kenya .
Trust is very important in any deal concerning construction.
I have undertaken several projects worth millions to the end and no such day have ever disappeared with client nor workers money.
Lastly we say God provides and what is meant for you no one can take it.
If you can downplay the roles of a contractor the way you have done I do bet that you count the egg shell at your home before stocking..
Phil, you are so right. And it hits home to know these slick bastards have screwed you, too. Am going back at it after twenty years, and am not looking forward to it. A person really has to figure out how to work on his own property.
Hi there, I have very similar issue like June 2 2018 Margaux situation, my contractor now leaves text messages with lien threats and still wants to come to my house for the balance on estimate paper, NO contract because second claim was filed. Need help, please. I am uncomfortable with the contractor coming over my house uninvited.
I must be honest and say when I first started listening to your video I thought you were a crackpot but after listening to your whole 7 things you should never say to your contractor I am so glad because I am one of those people that just speak before thinking sometimes and I can just see me getting into trouble the contractor and getting ripped off so thank you mr. Phil for all this great information I have actually wrote it down and going to pin it to my wall when I go to have my Foundation fixed on my property thank you so very much I plan to look into the rest of your videos God bless she’s looking out for you
All good and fair advice. Im a contractor and agree with all these points . I agree one should never lie to a customer but if i buy materials i upcharge for my time and work retrieving them… around 20% above cost.. i give the option for them to purchase parts themselves. If negotiations are fair and a customer is willing to pay what i need for labor i will pick them up for them no charge . Its a give and take and alittle give goes a long way with me. Its a 50/50 deal. I do a job for you to your satisfaction and you pay me money… if i have to negotiate to a lower price i dont expect to be asked to do extras .. its bad etiquette imho. alot of people seem to feel you owe them more because they are paying you like only giving access to a place when its convienient for them or expecting nights or weekends only or ” can u throw this little thing in ” after negotiations are finished . That means if you want something done in a resonable time you have to make the sl
Space available and make some consessions with your normal life…
just wish people would get multiple estimates more so they get a real sense of the avergae and what they are getting. Its equally frustrating for both sides. In my experience in doing things with integrity its way more of hassle on my end than it ever is for the customer.. get informed. Reseach your products and job you want done. It will make it easier gor all involved and help your bottom line in the end. Ty .
Phil,
Great advice. I’d like to get your advice on something … what are my options if a contractor screws me? E.g. when is it time to lawyer up or simply cut my losses? Also, at what point in time can I get out of my contract? What are some things that breach a contract? Curious what your and even some contractors thoughts are? Thanks warm regards, Chris
Advice from your attorney should help you avoid legal pitfalls where no one wins.
WOW! This is EXCELLENT advice. I am getting ready to reno kitchen and have already had one guy run when I asked for itemized break down between labor and materials. Thank you for this invaluable info.
Phil – You hit it on the head and bold, I like it! Excellent information to use!! Thank you for your insight!
from an Interior Designer, by trade.
Phil when you laughed in the video you made me laugh. Everything you said is true. I had been in the construction industry for while and i worked for different companies. Hopefully i’m working on a construction Start-Up here in Penn State.
I’m just an individual trying to have a house built and it’s good to know how to deal with contractors so you don’t get screwed
Many of the issues discussed in this could be eliminated by simply hiring a contractor with great referrals from friends or aquaintances. If you have the word of mouth from trusted sources regarding their integrity there is no reason to fret over most of the process.
I completely disagree. You need to apply these tips no matter how good their reputation is. These are fundamental to dealing with contractors.
Not just contractors. The advice about disclosing your budget applies EVERYWHERE. I showed my wife this video and then we called around to get prices on an implement for a tractor. We called 5 places. 2 we gave a budget to based on the most expensive brand of that implement. 3 we gave specs for what we needed to accomplish. Guess which 2 came back the highest?
Great info! Thanks so much, very helpful. Common sense stuff but really important to avoid slip-ups.
I would love advice. I hired a guy for a simple bath renovation- new tile, electrical and fixtures. He sent an estimate and said it would be about 3 weeks at most. second day on job I asked for a contact- with dates, etc. He refused. He brought in a guy who barely spoke English and left him to tile. The work was sloppy. Many tiles had to be replaced. The contractor has been disrespectful and unprofessional . Numerous mistakes and he lies about them. What should I do?
When you hire the next contractor check his references thoroughly. And review the contract thoroughly as well.
good blog!
Many great comments. Yes I have bought and sold houses on a small scale and have also worked as self employed contractor. If it’s not in writing I don’t do it. Thanks Phil you are the best!
Hi Phil, I love your videos! You are down to earth, honest and sincere. I ran across your videos by mistake, but I’m glad I did,. Thank you for your wisdom and sincerity. God bless.
So excellent! Thank you so much for your honesty
wow ..Thanks a lot …
Great video (my husband is an Electrical Contractor, but only does Commercial), and have seen this type of activity first hand. I am in the process of doing a partial Reno in our kitchen. I researched/purchased all the materials, and hired a GC to act as the Project Manager. Doing it this way saved me several thousand dollars. Totally agree, buy as much of the materials yourself.
I was almost laughing, it so painfully true on so many levels. Like give the answers on test to 5th grader 5 minutes before test time… They will use it and then tell you they passed honestly, it helps no one in the end. And we can file this under control the deal and don’t spill your candy in the lobby.
In short, excellent video on common sense.
They can SNIFF the newbie on you. And will always align it so it is maximized for themselves, NOT for you.
There is a monetary amount that determines how much you should pay up front, and there is a science behind it. But as you said, they will always make it better for themselves AND have a straight face when they tell you someting BS that lines their pockets more than yours. Good video, I approve.
Put in a new kitchen upgraded faucet while getting repair of a kitchen sink leak not even a month after husband, very qualified engineer always kept house in good repair.
Found out leak was coming from need of a new garbage disposal. Found a very good resource from Home Advisor who put in a new garbage disposal. I checked around many other internet resources like mentioned above for comparables first. This was a hard decision to make but the Home Advisor person did do a good job & also gave me a so many years guarantee. I am lucky in one way, the person who guaranteed for years has ownership of a home not far from me. I think I could take him to small claims court myself if he does not stand up to the guarantee? Since he does have a home legally as an asset of his, then I could file a lein against his home for the total lein that might become in my favor against him to be paid before he or anyone could sell his home, even though I would upfront have to pay for court filing & recording of the judgement (not that much compared to a possible total judgement. Very worth doing a study by any individual plus, for individuals to check person/company/contractor, etc assets in same state.
Phil! You will lose the rest of your hair if you keep hitting yourself like that! I’m a fan of yours, this may be the funniest and at the same time most powerful video ever… Thanks for sharing your wisdom…
Great video, every word of it 100% true. In my experience (one top to bottom remodel of a duplex), top tier (read expensive) contractors give you a fairly professional and detailed estimate, but then again you are paying TOP dollar.
Almost everyone else writes the estimate in sloppy hand writing or in a cryptic email. I’m overstating it a bit, but to get 3 half way decent estimates you have to call 30 guys.
Any tips on where to find a good contractor? I’ve tried Angies list, Yelp (totally unreliable, they virtually force businesses to pay monthly to get the good reviews to appear) and grabbing guys out of Home Depot.
I’ll be doing a video on the topic of finding great contractors shortly.
Did you ever do that video on finding great contractors?
Yes! How to Find Great Contractors
I own 3 houses from your advise you are a blessing to me! Keep up the good work! God bless you
Phil your the man I love your energy and use all your advice !!love ya Gabriella
That was great! Thank you.
I can relate.
Love your talk so much, your points are always very helpful and honest. Thanks Phil!!!
Thanks Phil! I really appreciate your sentiment. You expressed yourself how I feel. I’m going through a similar situation, although not by my own volition. I have partnered with someone who hired a contractor who on the start date failed to show up; and in between does not return calls and is in my opinion, at face-to-face, one of the nicest guys -right?, but out of sight is atrocious. Already I don’t like him.
The funny thing is that there are many suspicions that run around in my head about contractors about there unscrupulous ways and this (your) video confirms many of them.
Thanks Phil for the video. That’s real service.
by the way, I also appreciate your integrity in your overall business approach. This world is crawling with cockroaches…
This is why you’re on top. You’re not kidding. You’re the Bob Munden of real estate.
Can you do a video on how to develop the materials list?
Every project is different. That would be a tough one to be a catch all for all types of projects
I’ve experienced paying based on completion of a project in increments (20% 40%, etc) from the balance of the amount. Can I stipulate in the contract if the I have to pay for corrections based on an inspection, the cost be deducted from the balance of the contracted amount.
Absolutely!
Phil, I am a contractor. I love your passion and would love to work with you.
Wow. Great information and even better presentation. I’ve done this business for more than 20 years and appreciate the accurate information. Another “con tractor” trick is to overorder materials, later the contractor takes materials back and gets a refund. Makes you value the honest contractors more. Thank you Phil.
Thanks for the great insight. I shall be having a conversation with my contractor next 2 weeks and have picked useful new insights
Hi Phil, Almost every point you made has truth in it. I am a small contractor. I remind people / potential clients, all the time to be careful. However when you go shopping and have people bid jobs for you over and over and you go for the cheap price, you will get what you pay for or possibly worse. A Legitimate contractor in my state ( FLORIDA) is registered with the state and must adhere to the LAW. This costs $$$$$$ the ones you find on craigs list or other cheap ad places are usually fly by night bozos.They will underbid work to get it. Now after someone has had me bid for them a few times and they keep giving the work to a low ball, and call me up to FIX THIER screwups, ( THE CLIENT ) that is, I say the client , because they did not listen to me in the first place,and hired the BOZO, who thinks they know what they are doing. I tell them No THANKS. I gave you a proper bid. I do not fix client mistakes. The client is the client. It is their responsibility to Hire a REAL Contractor not a Con Artist with a clip board and a tape measure in a work truck. Make sure you are working with legitimate HONEST contractors and look for a bid somewhere in the middle and yes SPECIFY the quality of the material and the quality of the workmanship you are looking for. And yes YOU BETTER have a BUDGET in YOUR MIND or you will probably find out to do a good job is going to cost more than you think. Just like going to auto repair or a Dr. or lawyer or accountant. Accept those professionals do not come do the work at your house you go to theirs. It costs $$$ to go to pick up materials that can not be delivered and if they can, They usually charge for that service. Note…. Nothing is FREE. Sorry you are so jaded. I suggest you change your contractor referral source to the one that offers Legitimate contractors. Other than that I agree with most of what you say. Good luck with your students. I am also a real estate investor. My brother and I buy fix flip etc. As well as my installation business. My Brother is an Attorney, in CT. We had a General Contractor business in Westport, Ct. back in the 70’s & 80’s. He got tired of chasing Clients and Contractors for our $$$$$.So he went to Law School and became a lawyer instead. He and I were raised by our father, a former Officer in the U.S. Army who was born into the depression and served his country during the Korean Conflict.He was also a manager for A.T&T. & an entrepreneur of many labels as well as a Deacon in our Church. Oh I forgot to mention, my brother also attended West Point Military Academy Yes Phil, there are Honest Contractors out there. It’s a shame there aren’t more of us. As I said before good luck with your continuing investment strategies. I just think you might want to tell your students, that there is an acception to the rule, they must look in the right places for us. We do not advertise in cheap or free ad services if we advertise at all.We come highly recommended and do not have to look for work ,( usually) & we do not go looking for cheap work. We do not provide cheap work. The services we provide cost $ for our offices, help, insurance, tools trucks office equipment , accountants Lawyers as well as our registration fees and license fees etc. Sounds like you may need a handyman. Not a Contractor for a lot of your needed projects. There is a vast difference between a Legitimate Contractor and a handy man with a clip board. Research the Contractor and make sure they are a Real Contractor. I noticed this was near the end of your lesson on how to deal with Contractors. I think the first part of the lesson should be this POINT….:) Have A Nice Day
J.. R. in Fl.
Your video on contractors is very helpful. My older son is a small contractor in Colorado, doing jobs that cost the client about $1800 per job. He, as a practicing Lutheran Christian has alerted me to some of the points that you have made.
The Word of God, His Law) states many of the same things: First, regarding a contractor’s temptations: “Thou shalt not covet” (9th and 10th Commandments (Exodus 20; Romans 7). Regarding motivations, which apply to contractors and clients, “The love of money is the root of all sorts of evil” (1 Timothy 6). Consolation both for client and contractor: “God works in all things for God, for those who love Him and are the called according to His gracious purpose in the Savior of sinners, Jesus Christ, the crucified and righteous One, through faith in His blessed Name” (paraphrase, based on part of Romans 8)
I think it’s better that you hire a manager to over look the subs. Skip the contractor thing all together… what’s your thoughts?
I have done that several times.
Can you explain why do you think it is better to have a manager that overlooks the subs, rather than a General contractor?
I am a contractor / investor .
Was a contractor for 30 years before starting to invest. Can tell everyone one thing.” Walk a mile in a contractors shoes .”
and then you will know.
Another point I will make , I am considered to be fairly intelligent .If there were such great profits in being a contractor , I wouldnt be phasing out the contracting part of my business . I would not be moving towards full time investing .
I dont leave good deals to get a bad deal.
I am an investor and can say this will all certainty .Some not all investors but alot, have ruined the whole residential housing game. Budget is important, but lets not forget there is a buyer that will have to deal with the shoddy work that is performed.
They have driven everything towards price. Well I am a custom home builder and a third generation one at that. “Good work aint cheap and cheap work aInt good” .
I dont work for the seller or the buyer. I work for the property. Then booth sides win.
Regards , Todd
Cutting Edge Renovation & Design LLC
Other videos of mine handle the issues related to investors screwing contractors and customers. That is certainly horrible too. I appreciate your comment.
Todd, I am not an investor yet. Still lurking around the fringes trying absorb some knowledge. But I do know one thing….
Good Work Ain’t Cheap and Cheap Work Ain’t Good is a mantra I could get behind!
Thanks again Phil!
Thank you Phil. Great lesson
What about when all of these things are followed, you know where the guy lives, he is a maintance man at a local apartments complex, has no contractors’ liscense, and drags on and on one to two hours per week (we are on month 3 and still trying to do the work he was paid for) The job: Tile, Granite, and Cabinets / new can Lighting, move laundry room to the garage, and install a gas line / water line to the kitchen for gas stove and modern fridge ($4,000 flat).. I paid him $1,000 to start for tile he kicked ass but didn’t seal it. After that he delivers the large slabs of granite and on that day he did not break it but actually set it flawlessly cutting the pieces and setting them in place.. no sink hole.. he asks to get the next check and I oblige after all tile is done that is a huge job and alone worth $2,500 – $3,000 so I write the check gladly. From that day he flies to Denver. HA HA HA dissappears 2 weeks doesnt reply to a phone call or email and seems to have jipped me. However i had a gut feeling he was in some sort of trouble. He calls on the 15th day stating he was back in town and ready to continue. SO seriously 1 month passes he misses the deadline.. so we redo the contract again this time he promises to complete it by August 30th, he comes and completed the can lighting in both the office and kitchen in a day (with electrical for everything, following day demo the cabinets, install the new ones I bought. 4 days later comes in and asks for the 3rd check. I am pissed. SInk aint cut and tile is not sealed. Still pending was the 1/3 the work so I say noway but he insists and threatens to not complete the job stating that he underbid thinking I was a good guy.. I feel bad as he was right that he was doing a lot for a little and write him the 3rd thousand although at the time we only had $1,300 in the bank. He completely disappears again for a week just having assured us he would be completed by Sept 10th (his 3rd promise and that was the day before my wife’s birthday) to think that not 1 day he worked between that check and her birthday save him breaking the granite while moving it to cut the sink hole.. I feel assured when he tells me it broke where right where the sink hole was so no one will see that tiny crack in the front and the back of the sink (2″ or whatever). For my wife that was the end but i was so convinced he could buff it out. Still hasn’t. SO I add on some work to make up or it and have him knock down a wall to the kitchen to make a pony wall capped delivery style open concept to the dining table. I tell him I will call it even if he builds the pony wall and pantry for the $1400 slab was not to be cracked and I didn’t want him to have to pay to replace it over such a hairline crack. A new pantry and open concept kitchen would surely shut up my wife and bring him back to favor with her. Which it did. However he realized this $4,000 job a rip off when I told him the final $1,000 is paid when all things are completed. He has not been back for 13 days now. He came today though I dont know what to do but I like the idea of never paying him the final $1,000 the job gets finished.
Contractors always show up on payday
HA HA that is the only time you can guarantee a meeting with them after hired…You are the best Phil!
LOL the same issue is going on with us. Someone else who has been involved with the same contractor (no license) has had work completed by them took out the entire check for the deal before the job was completed causing them to have to pay him extra. DO NOT make the same mistake they did. Pay him only on the day the job is completed or this could give you a serious headache.
Your doing the righ thing-just like Phil says, NEVER pay all of the money until the job is complete. Also don’t let them guilt you into paying ahead of schedule either. I’m a real estate investor and a contractor, so I’m fortunate in knowing both sides. Contractors are also masters of story telling, to make you feel sorry for them and pay them in advance. Only pay for what has been completed. You seem like a good and good hearted person, but you made several mistakes. Don’t compound them.
I think you are inexperienced in remodel work. Please work with real professional contractors. Not maintenance men trying to moonlight full remodel jobs involving electric, plumbing, etc. You do not know his background and or his training. He may just be a basic handy man that is barely qualified for the job he has. If you are going to take on projects of this nature, do not hire someone who already has a full time job. YOUR PROJECT will be a second job and be treated as such. A SECOND JOB, not his primary focus. Good Luck and Better luck next time.
As always phill killer contentt!!
Thanks. Very helpful and smart ideas when dealing with contractors.
You hit the nail on the head. Thank You..
Great Information !!