Negotiating the Best Price from a Home Improvement Contractor
Negotiating the Best Price from a Home Improvement Contractor
May 5, 2019 by Lauren Norris
Are you considering home improvement or house remodeling? If so, you might understandably be concerned about labor and material prices. Engaging a professional home improvement contractor can be expensive but totally worth it if you know what you’re looking for.
To get the best results at an affordable fee, you would do well to negotiate terms with your contractor. Consider these negotiation workshops tips to get the best price from a home improvement contractor.
Agree on the Scope of Work
Upgrading your home, creating your dream room, or home staging can be fun. Nonetheless, bringing your ideas into reality may take lots of organization and smart planning. Creating a detailed list makes it easier to organize your thoughts and access your ideas in one place without overlooking details.
Your list may play an important role in negotiating prices with contractors. Assign a priority or ranking to your list of improvements and materials. Then ask your contractor to price up each. In breaking down the work in this way, you can make more informed decisions as to which improvements and materials are not worth the money.
Negotiations workshops provide valuable training on how to use your list to agree on what should go into the project and what should be discarded. With your home remodel list, your contractor gets a better idea of how much work and material may be required. So, you’re more likely to get a more accurate quote than when you don’t have a written-down set of rules.
Get Multiple Quotes
Your list doesn’t only help you agree on the scope of work, but also helps you get multiple quotes from competing contractors. With your detailed specifications, you know you’re getting a fair comparison as all prospective contractors should be reading from the same list.
Multiple quotes based on the same list can give you clarity when negotiating contractor prices.
You can be better able to compare:
Permit and licensing fees
With the information contained in multiple quotes, it becomes clearer what areas you can negotiate for lower contractor prices and by how much. For instance, you may not be able to negotiate on local government licenses, but if that lighting fixture you want from Italy can be sourced locally, then that could translate into great savings.
When talking to prospective contractors, mention that you are getting other quotes from competing contractors. Ensuring the contractor knows you are assessing the market passes the message that:
You’re informed of your needs and costs
You’re looking for the best possible deal
If other contractors are polishing up their proposals, your contractor should ensure their offer is competitive
When planning a home improvement project, understand that what you’re charged as contractor fees does not directly translate into contractor profits. The contractor has to pay out considerable overheads to get the job complete in time and with the quality required.
Overhead is any expenditure your contractor faces beyond material and labor costs. Overhead may include transportation, office staff, training, taxes, and insurance. If you help lower overhead costs, you may be in a better position to negotiate lower contractor fees. Some ways to lower overhead include:
Seeing if you can purchase and ship your light fixtures, cabinets, and other materials from the sellers to your site. If you manage the cost of purchasing and shipping your own supplies to the site, then you may drastically reduce the contractor’s overheads.
If your insurance covers damage to the rest of the house, injury to workers and passersby, and other forms of liability, this may lower your contractor’s premium payments.
If you take care of the dirt and debris generated by the remodel work, the contractor may not have to pay for housekeeping and cleaners.
If you can pay subcontractors and suppliers directly, your contractor won’t have to deal with the extra paperwork and cost outlays. You also have the additional benefit of negotiating for lower prices with each subcontractor directly.
Ask Your Contractor on How to Lower Prices
Your contractor is experienced and an informed professional. Rather than flat out asking for discounts or lower professional fees, ask your contractor what you can do to lower your prices.
Be open and honest about your budget and quality requirements. For instance, if your budget is $15K but the contractor’s estimate comes to $18K, maybe there are ways to bring down some costs. The contractor may suggest similar-looking supplies that cost less or same-quality supplies that are sourced cheaper from other sources.
For instance, can the use of vinyl tiles work better for your budget than ceramic tiles without significant loss of aesthetics? May constructing the additional bathroom downstairs cost less than building it upstairs? Talk to your contractor and the answer may result in cost savings.
Make Part of the Work Your DIY Project
Are you handy with workshop tools or skilled at decorating? Completing part of the project yourself can reduce the contractor’s duties and costs. If you train yourself to be prepared to ask about removing parts of the project, your contractor will more than likely be flexible when negotiating with you.
Maybe you can paint the finished walls yourself after construction is complete. Or you can safely do the demolition and excavation work before construction begins.
For home improvement works you decide to tackle yourself, ensure you don’t need special or costly licenses, tools, gear, or insurance that could potentially push up your costs. Additionally, make safety a priority over costs.
Negotiate on Non-Price Terms
There are other aspects of a home remodel project that impact the cost of the project. For instance, can you be flexible about working hours? If the contractor prefers working at night when there’s less traffic, then they may be able to agree to lower fees. Maybe the contractor has another day job or his workers prefer non-business hours.
You can also negotiate on payment terms. An example would be offering an upfront deposit in exchange for discounts on total payments. You may also offer to pay cash immediately when the work is complete rather than the contractor having to wait for a 30-day invoicing and billing process.
Plumbing, electrical, and mechanical installations may also offer opportunities for lowering costs. Negotiate on extended parts and labor warranty to cut down on long-term service, repair, maintenance, and replacement costs.
Article submitted by: Milena Gallo – Content Editor | negotiations.com