The home remodeling industry is booming because everybody is spending more time at home. The housing market will likely stay robust for years to come as a result. Unfortunately, home remodeling always takes longer and costs more than expected.
A good mental exercise is to expect your home remodel to cost 50% more and take 50% longer than expected. If your home remodel comes under these metrics, you will feel good about your project. If not, your expectations were too high.
I’ve done four major home remodels before. None of them were pleasant experiences. All projects took longer than expected. After my first two home remodeling projects, I finally wisened up to the game some general contractors play to extract as much money from homeowners as possible.
If you are planning on buying a property and remodeling it, please know that the permitting and remodeling process can be a very big PITA. If you are not good with dealing with stress, buying an already remodeled home may be a better bet.
Let me share with you one home remodeling example that demonstrates the opaqueness of home remodel pricing. Pre-pandemic, home remodeling already took longer than expected.
Post-pandemic, it is taking even longer to remodel a home due to supply chain issues, labor shortages, and a backlog of permits to be improved. Further, the cost to remodel a home has also gone up. Patience is a must!
Why Home Remodeling Always Costs More: Opaque Pricing
Back in 2014, I bought a fixer on the west side of San Francisco. The house was smaller than our existing house at the time. But it had gorgeous ocean views.
Further, I wanted to utilize new capital from an expiring CD and build more passive income by renting out our old house.
My general contractor (GC), who was also my tennis teammate, made fun of me for spending $6,000 for replacing my 40-year-old gravity furnace. It was lined with asbestos. I also needed to replace all my ducts and vacuum seal my house for a day to prevent any asbestos from escaping as part of the replacement and permit process.
Offering Fake Quotes
“I could have done it for $2,000!” he said as he tried to make me feel bad about not hiring him. Oh well, saving $4,000 would have been nice. I thought he just did bathrooms and kitchens.
When my general contractor came back to me with a bid of $9,000 to paint the interior of my house, I almost threw up in amazement. $9,000 was a lot of money!
“$9,000 is a great price,” he said with a serious face. This was despite him quoting a furnace removal and replacement price 68% cheaper.
Because I thought $9,000 was ludicrously expensive, I declined his bid and found another fella I worked with in the past for $7,000.
After he discovered I was going with the other fella, my general contractor came back to me and said I was wasting my money. He said he knew guys that could paint my interior for only $5,800!
What the HELL?! He just said $9,000 was a great price. Now he quickly offered a new price 36% lower thanks to some competition.
Unfortunately for him, I didn’t take the bait. He gambled and lost. I decided to go with the other painters.
Endless Pricing Shenanigans With My General Contractor
After I hired my guys for $7,000, my contractor kept on harping at me that I was wasting money even though he initially gave me a bid for $9,000. Unfortunately, after I paid my guys $1,100 after two days of work (three guys one day, two guys the second day), they said the job was too much for them for only $7,000 so they quit.
Befuddled why they quit, I later found out that my contractor was fighting with the painters while I was away at work. My contractor was remodeling the kitchen while they were painting. The painters couldn’t take his harassment anymore! What a sabotage.
So now I was stuck without any painters. Logically I went to my contractor and asked him to do the job for $5,800 (his second bid price) MINUS the $1,100 that I already spent on two days worth of work = $4,700.
Changing The Price Of The Work: Bait And Switch
My general contractor said he could no longer get the $5,800 price. It was a one time deal and the guys are now busy. Ah, such utter bullshit.
Instead of getting the $5,800 gross price, he offered up one of his painting buddies at my original price of $7,000 minus the $1,100 spent = $5,900.
I understand everybody wants to make a buck, but I was thoroughly disappointed in my friend for trying to screw me.
In the end, I negotiated directly with a painter for $6,400; $600 more than my contractor had said he could get but $600 less than I was going to pay the other guys who quit (thanks to my contractor).
Why Home Remodeling Always Takes Longer And Costs More Than Expected
The reason why home remodeling projects tend to always cost more and take longer than agreed upon is because some general contractors want to make maximum money from you. Contractors can hold homeowners hostage due to more lucrative deals.
Making maximum profits is Business 101. However, some general contractors (GC) go too far. This article is definitely not going to make me any general contractor friends. However, I need to share my experiences on this often times very difficult process.
At the same time, the homeowner is also often at fault due to unreasonable expectations and demands. As soon as one wall is open, homeowners sometimes want to expand the project to do new things.
Let’s go through the reasons why most home remodeling projects take longer and cost more than expected.
1) The number one goal is to win the contract.
To win the project, the GC must highlight an attractive price and good quality craftsmanship. Competition is fierce, so contractors may exaggerate to win the contract.
It doesn’t matter if the price is an artificially low price. The goal is to have the homeowner sign the contract and lock them in. Once the contractor has gotten the homeowner to sign and begun demolition, this is when the GC can start manipulating the project to his benefit.
2) General contractors create a hostage scenario.
The deeper a project goes, the more a GC will highlight “unforeseen” problems that require more work. Even though there’s nothing really unforeseen for contractors who’ve been around long enough. Given most homeowners don’t have extensive experience remodeling, this information asymmetry is a powerful weapon held by the GC.
Let’s say a homeowner is $60,000 deep into a project after two months. Contractors know the chances are low that the homeowner will balk at an additional $10,000 – $20,000 worth of work to make the home better. However, sometimes, the addition work is unnecessary and doesn’t cost the new amounts.
If the homeowner really starts pushing back, then of course the GC will do the homeowner a “favor” and adjust the price so as to not have the project break down. But the homeowner really doesn’t know how to navigate the project as adeptly as the GC.
3) Homeowners’ emotions get in the way, which increases home remodeling costs.
A new home is very emotional for most people. It might have taken a couple 10 years of saving to come up with the downpayment. Or maybe the couple lost multiple bids and finally paid a big premium for this home.
The more emotional a homeowner is, the more profit the GC knows he can make. For example, let’s say the homeowner mistakenly tells the contractor this is their dream home. They overbid by $100,000. In such a scenario, what’s charging an extra $10,000 in remodeling costs?
4) Homeowners rely on default thinking which enables contractors to charge more.
Some experienced homeowners enter into a remodeling project with the default thought that the project will cost more and take longer than expected. Letting your GC know your default thinking is also bad, because a GC might really start taking advantage of you. As the saying goes, “give an inch, take a mile.”
It’s up to homeowners to cut this type of thinking out and make GCs stick to the contract. But GCs can be very intimidating sometimes. They use their intimidation to force things through.
The remedy for this is to have a LATE FEE clause in the contract. In other words, for every day a contractor goes beyond the agreed-upon finish date, you get a credit.
5) Smile and charge pricing strategy for home remodeling.
The most skilled price gougers are the GCs who bring up additional work to be done while constantly being nice and smiley. GCs understand that most homeowners just want to have GCs who take the time to listen to their problems and find beautiful solutions.
They understand homeowners are busy with their jobs and kids and don’t fully understand all the remodeling nuances. By just being responsive over e-mail and talking things through, some GCs adeptly persuade and guilt homeowners into paying more than expected.
6) Pricing discrimination by neighborhood.
I have a new contractor I’m using. He’s extremely unreliable and not a good communicator. But at least he is good value and honest.
One day, he readily admitted to me that if he has a home remodeling job in Pacific Heights, one of the most expensive neighborhoods in San Francisco, he will charge 100% more just because the homes there are more expensive.
He discovered that rich homeowners are much more likely to accept higher remodeling prices. The reason is because their homes are more expensive on a price per square foot basis. Therefore, there is a bigger cost buffer they can deal with e.g. remodel for $1,000/sqft and sell for $1,500/sqft.
Luckily for the GC, input and labor costs largely remain the same. For example, the cost of sheetrock and electrical wiring doesn’t change by house price.
I have one friend who owns a home in an expensive neighborhood get charged $600 per plant when he landscaped his terrace. Each plant cost less than $50 bucks and he could have easily planted each one himself. He had no idea about the $600/plant cost until they began to die. It was only then that he decided to check his invoice and see how much he had been overcharged.
GCs know that some homeowners are so rich that they never bother to look at the receipts. Check your receipts!
Welcome To The Home Remodeling Jungle
The residential remodeling business makes the auto service business look like a girl scout lemonade stand business. Everybody needs to take their cut in the building business, sometimes even corrupt building inspectors who approve and sign off on your project!
I’ve heard plenty of stories where an inspector demanded payment for approving a project. So far the building, plumbing, and electrical inspectors I’ve been dealing with seem above board.
However, when I pay $325 for a roof permit, and the building inspector doesn’t even bother to climb the ladder to inspect the roof, I begin to wonder. All he did was drive up to my house, look at the roof, and sign the permit card.
Main Excuse By General Contractors To Raise Prices
Beware, the number one bullshit excuse general contractors like to use to charge more is that the project will cost them money. They will always say something like, “I lost money working,” or “I’m working for free for you.” They will try to guilt you into paying them beyond the initially agreed upon contract. Don’t let them!
They don’t lose anything if they have to work longer. It’s not like they have to spend more money out of their pockets for much more material or pay their sub-contractors if they aren’t working. The GCs just need to spend more time based on their agreement.
If you can successfully navigate the shady home remodeling business and remodel fixers in strong real estate markets you’ll do very well. But chances are high that you will get run over and get buried in your backyard with cost overages.
During the pandemic, new construction and remodeled homes are commanding higher premiums.
Strategies To Keep Your Home Remodel Within Budget And On Time
1) Get multiple bids
Don’t rush into anything, get multiple bids, and be willing to walk away. Be as detailed as possible when drawing up the contract regarding costs, time, materials, and work to do. Whenever a GC wants to charge you more, simply point to your iron clad contract and have them carry on.
If they don’t, then you must be willing to fire them and hire someone else. Be aware that you are only required to pay for work that is completed. Don’t let a GC swindle you out of work that he says he’s planned for.
2) Have alternatives
The best way to keep your general contractor honest is by having a detailed list of alternative people who can do the job. Your GC must feel the pressure of losing your business if they try to screw you too much once remodeling has started.
One strategy is to have a handyman purposefully work on another part of your house while your GC is there. This way, your GC knows you are resourceful and have other alternatives.
Whenever my unreliable GC goes AWOL for more than two weeks, I text him saying I’ll get my friend who he knows to finish the job. If I do, I’ll subtract his cost from our existing contract. My contractor always responds and gets back to work once he hears this.
Keep the communication pressure on.
3) Have a late fee clause
Finally, absolutely include a late fee clause in your contract. Come up with a conservative finish date so that your general contractor will agree to the late fee clause. The conservative finish date is also something you need to be comfortable with as well.
The late fee clause should state that for each day the contractor is late there is a credit or reduction in price.
For example, I once had inserted a late fee clause that stated that for every day over our agreed-upon termination date, I would get a $250 credit. The project went three months over and I was able to save $22,500!
Further, the late fee clause will reduce your anxiety. You might start rooting for your contractor to take his sweet time in order to save more money.
Planning And Building Department Backups
Another reason why home remodeling takes longer and costs more than expected is because your city’s Planning and Building Department is inefficient. When the pandemic hit, Planning and Building Departments stopped working in person. They tried to put everything online, but the system failed.
Also, there is sometimes corruption in the Planning and Building Department. Plans sometimes don’t get approved unless you pay for a meal, pay for a vacation, or slip some money under the table! Corruption in the building and inspectors offices is common.
In the home remodeling industry, we call this “pay-to-play.” It stinks for homeowners. Hopefully, you won’t encounter a corrupt planning department plan approver or corrupt inspector who holds your permit hostage.
Related: Should I Remodel With Or Without A Permit?
Reduce Your Home Remodeling Expectations
Chances are high your home remodeling experience will be terrible. Therefore, I suggest you lower your expectations. Expect it to take longer and cost more than expected. But keep that to yourself. Further, you must educate yourself as much as possible about the home remodeling process so you aren’t constantly surprised.
You must negotiate hard with your contractor and continue to keep on him during the entire home remodeling project. If you find there are long delays, it is highly likely your contractor is working on another home remodeling project.
Of course, not all general contractors are going to try and rip you off. Some are going to be absolutely wonderful to work with. I just haven’t found any of them so far and neither have any of my friends who’ve remodeled. Even friends who have spent multi-millions remodeling their homes have had terrible experiences.
Keep The Faith When Remodeling Your Home
Good luck with your home remodeling project. It will likely be one the most difficult and frustrating things you’ll ever have to go through. Realtors have told me a home remodeling project gone bad is one of the most cited reasons for divorce and home sale!
But once your remodeling project is done, you’re going to be so glad the nightmare is over. If you focus on increasing the livable space, you will mostly likely increase the value of your home. I’ve never regretted doing a remodel and getting the permit signed off with final approval.
I‘ve got to say, reading this post definitely makes me not want to remodel ever again. From now on, I’m just going to buy an already remodeled home. I’m just too old to build sweat equity anymore! I’d much rather make real estate equity passively.
Home remodeling is costing more and taking longer in this post-pandemic world. The supply chains are still disrupted. Therefore, patience is a must. Make sure you set your home remodeling expectations low!
The good thing is, if you get through the remodeling gauntlet, your home will likely sell for an even bigger premium than before. With fewer people wanting to remodel homes due to how difficult it is, more people will pay up for already remodeled homes.
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[…] on the high end if the cost is low and the sale price is high. Just to be conservative, always add 50% more time and cost to your project to stay sane and conservative. Even if costs balloon to $525 / sqft, the low end return would still […]
Hi, I’m in the middle of a house re-siding project with a contractor who I thought gave a good price. Work was proceeding well, but the other day the contractor showed me 4 double-hung windows that were rotted around the edge and needed to be replaced before he could go further with the siding. He said the price was $5400 complete, including new interior molding. I was a little surprised and said OK right way, but now I think the price is high, as it looks like each window costs around $400 at Home Depot (Anderson 400 series). I’m a little upset, but I’m not sure if there’s anything I can do now that I gave the OK and the windows are in. He said windows are hard to get right now. Does anyone have a suggestion?
Go to Home Depot or Lowes to price. That Contractor is smoking crack! Always, Always get 3 estimates. Put a hold on the work. I hope you haven’t signed a contract. When someone gives you a price always tell them you have a cousin that’s a contractor and you want to get their recommendation too. Always ask for a written estimate listing the scope of work and amount.
I’ve remodeled 6 houses now as it is a passion of mine. Professionallly I sell building materials but also like to get my hands dirty. While I do 85% of my own work I don’t touch electrics, roofing or most plumbing work.
There have been many valid points made from both sides. In this world you definitely get what you pay for so keep in mind you aren’t paying for his 8 outs of labor, you are paying for the 25 years of skills he has accumulated. You are just renting them that day.
Planning is the biggest opportunity to save money. On my own jobs, the biggest unexpected costs arise when I deviate from plans. While the outcome may be more desirable it always costs exponentially more money. Plan beyond any level you believe you need to plan to save money.
Speaking from enormous experience, it’s the same way when contracting to write a computer program for someone. It’s not just a matter of inserting a few extra lines of code with a keyboard.
Scope creep awareness, firmly setting expectations, and a clearly defined change management process can help, at least with some clients. However, these won’t be the ones that want you to skip all that preliminary stuff and just start writing code.
Great synergy with your business and remodeling. I’d certainly do most of that myself too.
Although, I did see one sub slice open his finger with the blade saw and ripped from top of my house down. That was kinda traumatic.
Interesting perspectives. I think after reading some of these comments and the harsh views held by some related to the skill sets or knowledge base of some of these trades people and GCs i’m appalled with the arrogance. I work for a large GC so I may have some bias overall in relation to my view on small GCs and tradespeople. However, I do understand the frustration people can have with subcontracting any work and I think it is due to their own lack of experience, education or effort to research and understand options. As a side note, for those of you doubting the talents and billing rates of “uneducated trades people” check out Mike Rowe and MikeRoweWorks Foundation. The country as a whole is rapidly approaching a massive skills gap, largely due to the idea that everyone should go to college and chase the “corner office”. However, society will fail in my opinion if that is the case. We need people with proficient skills in all areas to survive. Good luck waiting for the tech geniuses to create a bot that will perform all of these repair tasks for you.
While the post itself has numerous valid points, I think like with anything having more information and open communication is the key. If you make your expectations known from the beginning and take the time to strike an agreement outlining all risks and contingency plans, including allocating funding for mitigation, then you will be successful.
I think some of your tips such as a late finish clause is good, though I think you would need to be flexible and understanding to reasons why there was a late finish. Utilizing LDs in construction is very common, but enforcing them doesn’t always happen.
Another point for those commentators who were “screwed over” in the past paying too much in advance or giving cash advances. Why would you do that? You come to an agreement and you need to enforce your contract. I have had contractors on my home renovations ask for 30% deposit, or 50%, etc. I always say no. I will pay for installed materials only (given the job scopes were small and short in duration). This is an agreement you come to, and then you need to stick with it.
I find the negative perspective on trades mentioned in the various comments unreal. There are so many skills required to become competent in performing some of the tasks people listed and mocked.
As for the comments about “barely graduated high school…” I don’t see how that is relevant. Not everyone is going to be good at the same things. Further, people with skills who find a way to get paid for them are likely better off at least economically than someone working in a dead end office job with a college degree.
I know a lot of individuals who “barely graduated high school” that now run their own business, whether auto mechanics, plumbers, electricians or GCs. They learn to master a skill or how to manage others and build their empires.
Sure, one mechanic I know can barely write a complete sentence without a couple spelling errors. This same guy of course has a franchise of auto repair shops, and a $5M house that he owns out right. So, I think there is a place for those who may not have excelled in high school, but have found a way to flex their talents.
As noted I happen to work for a large GC myself. I can tell you some of the most talented people I have ever met have gone through the trades programs. The amount of knowledge some of these people are able to gain in their careers while building, installing, running equipment, demoing, etc. is simply amazing. Not to mention those with the courage to go out on their own and start their own companies. Why would you look down on them?
My last suggestion for those of you who mock the trades. Try doing some of your own home renovations. See where the skill gaps really are. I think sometimes because these people make it look so easy based on their abilities, people begin to think the work is easy. I challenge each of you to try and do some home maintenance and maybe you will learn to appreciate the contractors and trades more. Their knowledge of the tools they need, and the materials required for a job. The fact that they can anticipate the duration, and give you a fair assessment of the value of work and time to complete the tasks alone should give you confidence on their abilities.
Sure you will have a varying price when you submit for quotes. This is one reason that you should always get at least three numbers. At a minimum this will allow you a sanity check, but also will give you a value confirmation. One of the best tips I can give you is to hide the final number of the quotes. Stack up the quotes and compare the value. Look at the track history, what they are offering, and your general comfort with the contractor. Then after you make that opinion look at the final price. If you can afford the one you rated the best, then maybe that’s the best option. If you can’t, then you need to make decisions on what service you are willing to sacrifice to get to the price you need, or what level of contractor you are willing to accept to perform the job.
Lastly, avoid the “F you” number. Sometimes you will get those, because a contractor/trades person is so busy with work they don’t really need more. However, they will go give you an estimate to see if the work can fit their schedule. If they don’t really have the time for it or it doesn’t align in their work cycle, they may still give you a number. This number will be high but if you are willing to pay it then they will shift things around to get the work completed for you. This isn’t exactly bad business, it’s more supply and demand. If they are in high demand, then the price goes up. If they are chasing work then the price goes down. Simple economics. Again, this is why you need multiple prices to get the sanity check.
Homeowners definitely need to educate themselves as well. Bad expectations and poor education by the homeowner is a cause of a lot of tension and problems for sure.
When remodeling a home, if you are living off site, you need to visit your property at least every other day. Here are just two examples of mistakes I caught what we were renovating our house. First, we decided to place kitchen cabinets up to the ceiling line. I came in one day and noticed that they had installed a soffit. The second item, was also in the kitchen. They had sealed the walls but failed to extend the gas line through the wall for the oven. The contractor tried to place the blame and additional costs us. You need to keep an eagle eye and take nothing for granted. .
Sorry to hear you had an experience that did not align with your expectations. It is stressful and can get expensive/ unpredictable depending on on your GC.
Our most recent remodel and the experience was quite pleasurable! Guess I got lucky. I didn’t hire a GC this time. I found my tradesperson through Craigslist and went one room at a time. When we were ready for the final piece (main area wall removal, ceiling vault, huge new kitchen) he had become quite familiar with us and we had time to build a great relationship. He also showed competence in reading the engineered drawings we had done for the eventual plans (also through an engineer I found on Craigslist).
I’m honestly so grateful toward him for his work ethic, skill level, innovation, and his devious ways to help us save money! I think he helped us so much because he wanted to keep working together- and it worked. I got him going on another house last month.
It was rocky at the start and there were the usual fights. But over time, I came to really like and appreciate the guy. I did things to keep him happy like sending him Starbucks gift cards, gift cards to go for back massages, money to get his truck detailed, Christmas presents for his family, and I let him find a couple of gold coins tucked into walls during demo (which he incredibly told me about). He has been totally worth it and has underbid his own work. I thought about late fees initially, but instead I gave him surprise completion bonuses on each scope of work from the start. This worked well to incentive him to get stuff done.
It’s OK. My remodel ended up being good value, so it’s fine to look back on it now and laugh.
Did you do your work with permits and get it approved? That’s one of the big issues for remodeling the U.S. I want the permit and I want it approved so it goes on the 3R report, which boost’s the property’s value.
Oh man home remodeling is SO stressful and takes freakin’ forever. And contractors are so unreliable. They start off great and then fade into the distance and sometimes totally disappear! Augh. It’s nuts how many details are involved when you remodel and if you don’t stay on top of the work, so many things can slip through the cracks or get done wrong.
I try and do small projects by myself when possible because it’s cheaper and much more efficient. But whenever I’ve been able to find someone reliable it’s nice to have someone to fix things. Recently I managed to install some Toto washlets all by myself which was nice. It was a little confusing at first because the instructions weren’t that great, but I figured it out. Anyway, really helpful post. Thanks for covering so much!
Yes, I can confirm that this is accurate from my experiences. I love the idea of a late fee. I’ve also heard that a good thing to do is this. Ask your GC for a conservative estimate of when they can complete the project. Get them to outline what potential things could go wrong that would make the project go longer and cost more. For each one, have a discussion about specific impacts for each of the situations they outline. Once these things are out in the open, you agree upon the deadline and talk late fee. This might not be foolproof, but at least it shows them that you are not going to fall for a bunch of made up bs reasons for a markups and delays.
Also, if you make additions or modifications to the project scope after it’s in motion (which happens a lot in my experience) get written commitments on the additional expenses and timelines in writing before you agree to them to protect yourself.
This problem is not unique to home remodeling. Proper cost estimation is ALWAYS a problem. People love to underestimate the amount of time and money that any project will cost. This is because they ignore the small details.
There is a rule in engineering that 80% of the cost comes from 20% of the features. In general, this means that the small features that you gloss over will have an outsized impact on the total cost of the project.
Thanks for this timely post, Sam. Yesterday, my husband and I transferred our reno budget to our bank account. We’ve been talking about this since before the pandemic started (yes, we’re cautious). I’ve gone back and forth, “Do we hire a GC? Or act as our own GCs?”
I’m forwarding your post to my husband!
Again, thank you for sharing this.
My step brother is a GC. Let me tell you that he can confirm most of the stories you mention in his experiences before he became a GC himself. They say its good to have a doctor in the family, but let me tell you, a contractor in the family is beyond priceless.
Hope he’s a good GC! Having one you trust is so incredibly valuable.
Mine is absolutely terrible. But he’s good value. Also, as I’ve gotten older and wealthier, I’m not as stressed if there’s as much wasted time. The buffer has grown so the stress is down. The late clause is huge.
The thing is, you don’t always get what you pay for. Paying more for a GC doesn’t guarantee a great experience whatsoever!
I am fortunate from my law practice to know several local contractors and I am in the middle of an addition to my house. I hired the contractor I trusted most and didn’t bid the project but did negotiate an end date. Thrilled with the results so far.
This article is quite true. One thing I found interesting was the author refers to the contractors as “my contractor” or “my guys”. They are not! They will bait and switch and the idea is to try to get as much money as they can.
I have had the same exact experience in Los Angeles, twice in a row on a construction project.
The first one, a licensed general contractor took $41,000 and ran away. He would do whatever it takes to get the contract signed. Then he submitted invoices very quickly saying the quicker I pay, the quicker the work would get done.
I was naive to keep paying, but when I came to my senses and confronted him that this is a lot more money than the work completed, he started to abandon the work. I had to call him everyday, leave a voicemail, send text messages and email, but no response. Finally I had to file a CSLB complaint and a bond claim.
The CSLB was useless. He didn’t respond back to any of their correspondences and the bond company had 3 other claims, so I haven’t gotten anything.
The lumber company put a lien on my property because this scum bag didn’t pay the lumber company. I had to pay out of pocket nearly $12,000 that I had already paid the contractor.
Then it took me a while to trust any contractors. I got over it and selected another contractor to complete the work.
He did the same exact thing. He got into contract, kept wanting money every week, which became every day so he could pay the workers etc. and kept lying that he would finish 3 or 4 inspections next week. Once he got the monies, he would delay everything and keep asking for more money. He had advanced $22,000 (70% of the project cost) for work that was about 35% completed.
[Just to let you know I was not the only guy thinking these guys were slacking off, the electrician who happened to have been brought by the contractor, and his friend, would say it to their faces that they have too much work remaining and they are making very slow progress. This will tell you that I was not a biased homeowner. I was the guy who kept giving money every day.]
Then he would threaten to not come back if I didn’t pay him every day.
When they see the kind of car you drive, and that you have a good life, they want to extract as much money as they can. This guy drove 2 hours to get to my house because he couldn’t afford the rent in LA, he would run out of gas and I would fill his tank up to be good to him. I would keep giving him money for food and gas everyday, paid for the porta potty, scaffold and equipment etc. even though he had included those in the contract price.
Overall, I have come to realize that the only way to complete a project is to not enter into a contract with anyone. Just get a quote for it piece by piece and pay as they complete the job.
This may end up being the same as what you would pay with a full job quote, because every contractor will always extract more than they had quoted at the beginning, because they hold us “hostage” by knowing that the homeowners are lazy to go find another contractor and we just want to get the work done.
It is best to get the hard things like foundation, structural, framing, roof etc. done by different companies and the rest can be done by people with reasonable skills.
I have heard of people who own houses in third World countries. They’d just make a phone call from the US, and the contractor completes the job and they send the monies by Western Union. They are happy to have a job and they respect the homeowners as they know that’s how they can establish a good relationship for future business.
It is very disgusting that in Los Angeles (America), the construction workers are such dirt bags.
One race of construction workers hate the other, but they all do the same exact thing. So, it is not a racial thing, but it comes with the construction trade. Perhaps their mentors, fathers or someone teaches them these unscrupulous ways.
I can clearly say that based on my repeated experiences, there is a serious lack of ethics in the construction Industry. This has to change if America needs to keep its reputation as a good place to live in.
I need help with finishing up this construction, remodeling the main house, repeat this construction on a different house etc. It is in their best interest if they worked smoothly with me and other homeowners so they can get repeat business. But they seem to want to get their kids to college with one project. They seem to lack good business ethics and common business sense.
Any contractors who find this post and my comment offensive, c’mon dude, we know you have done this before!
First of everyone needs to do due diligence before hiring a contractor & signing a contract ( you always have 3 days to back out of a signed contract) Contractors will never charge more than what was on the a quote unless it’s a change order.
If you get an estimate then it’s a different story or if you do T&M. In those cases both parties are screwed because the homeowner will think they getting ripped off if it takes longer than they think it should. The contractor will lose a client justifying the cost of extra work that was done. If your contractor cant give you an exact price you should pass.
Second is about this guy “ShaK” crying about contractors, he is out of line and guys like him get what they put out in the world.
Third is you can go out to eat at McDonald’s or French Laundry, should you pay the same price? Is the service the same? Is the skill level the same?
It’s all food right…lol wrong there is a level in every industry and you decide what level you can afford or or want.
You can have a master craftsman or a day laborer, you decide the level of craftsmanship, Passion, integrity you want to receive.
Great general contractors with amazing subcontractors are everywhere if you stop focusing on the price and start focusing on the value and quality craftsmanship you will receive!
I mean Shak isn’t really all that wrong…
I’ve been doing it for probably five years mostly cause I couldn’t find one. There’s shitty ones around every corner. My first one I took over the gc stole $50,000 and the guy had oodles of liens on his property.
I operate a little more informal at times but not shady. My original bid is a starting point. When you want to make changes we’ll alter it. If small things pop up though I do them and just bill. Part of my job is seeing the job gets done. If it has to be done, it has to be done.
I give free quick estimates. When it looks pretty confident the job is mine I’ll bid out the bulk of it based on what I can see. I don’t waste my time with window shoppers. If I get the impression you’re price shopping beyond a quick estimate I walk. Bids take time. Not interested in having my time wasted.
I’m not going to bid things like how many holes need to be fixed after the electrician has been in there running wires around in an existing structure, they’ll get fixed and billed for at what I would’ve bid at. I have a price book that I operate out of. Remodels can’t be be fully bided, but I try to make sure it’s fair to everyone myself included with extras. Recently replaced a bunch of windows, and they needed new stops. I made good margins and got what I wanted, so I made them new ones for free.
I don’t know if I’m cheap or not. I decide what I want to make on a job. You decide if the jobs worth the price to you. I know my markups on subs can be high. But it’s a job in itself staying on them.
Price shopping? So you think that a homeowner should just hire you without getting other bids? This is why I dislike GC’s, as “anyone” can be a GC and unfortunately, that’s what happens. To be an PE, or architect, you have to get a degree, and pass certification tests. The bar for the minimum level of skill in those fields is far higher.
So I am not the only one who has seen and experiencing this GC issue. It is interesting that there is no easy method of going after these guys. In California good GC are difficult to find.
One thing I’ve noticed is the GCs complaining in the comments can’t even write a coherent sentence. These guys are overpaid. I can’t wait for the day some tech guru creates a bot that can do this work. Most of these “skilled” tradesmen are useless. These were the guys who barely graduated high school and think replacing a wall or running some plumbing deserves to be compensated at the level of a skilled professional. Give me a break, lol!
Then do your own work
Probably the most ignorant comment thus far.
There’s a lot of crappy tradesmen out there, I’ll give him that.
But as the other reply points out; you’re welcome to do it yourself.
I’m college educated but fell into the trades.
Why?
Because I can bill $1000 a day installing windows.
I can make 50% in my pocket on shingling a roof.
I can charge $2000 to install a small kitchen worth of cabinets with a helper, usually in a day.
In California, a homeowner can be his own GC. So no need to hire GC, just brush up on code requirements, pull permits directly and then hire subcontractor to do specific job. Keeping out GC reduces level of complexity and also saves a lot of money! Also if owner is reasonably handy, he can do lots of things himself, as california allows owner to do all trades work on his own home (except well digging). Saves big headache and money dealing with unscrupulous contractors!
Sure, if you’ve got the time and know-how. I’ve been there when inspectors from building, electrical, and plumbing have shouted at my GC with decades of experience, and with sub-contractors with similar amounts of experience for the SMALLEST of issues. The whole project gets delayed by weeks or MONTHS.
Must have had really tough inspectors. We GC’ed our own home in SF bay area (total rebuild from foundation up), and we only ran into snag only with our main drain outside of house. Not being able to find a plumbing contractor in time, I did the work myself mostly (with helpers to dig the trench) and it passed on second inspection! I guess I was just lucky that where we live, inspectors aren’t so tough on home owners who are GC’ing their own house build.
Wow, I am truly impressed!
I guess my other fear is this: what if I do the work myself, and do it wrong? A leaky pipe inside a wall is terrible. A bad wiring could cause a fire, etc. At the end of the day, I just hire a guy I’ve done work with, and then try and check and oversea all their work. I guess that’s what the inspectors are for!
I’m finishing up a house now. Painful, and costly, but I feel good.
Inspectors aren’t always right.
Your gc should be just as up to codes if not more.
Had a project where the inspector wanted thousands of dollars of additional electrical work done. Put him on the phone with my master Electrican who said I didn’t have to and he caved, admitted he wanted it done but didn’t have to.
I built myself a house. Lots of big windows. The inspector wanted me to replace all the headers. Would’ve been costly and time consuming. I told him no, I was fine (they’d been running through computer programs and okayed, he measured it out by hand out of his book. The style of the house spread the weight differently than he was used to). Delayed the project three weeks or so. He caved. I agreed to replace one. The rest stayed.
I personally don’t like dealing with a lot of inspectors. There’s a couple I really like and when I have a question even in a different jurisdiction I’ll call and ask them. I’ve used their responses to shut down other inspectors.
From my perspective as a sub contractor I think this article. blog, whatever it is , is way off base. I am a very honest and hardworking person and have acquired very good skills over more than two decades working in the industry. I am not out to take as much as I can from a customer, I DO want to make a living though and I feel I deserve to. If this clown who wrote this article went with the lowest bidder then was surprised that things cost more in the end then that is on him. I am rarely the lowest bidder, I am often the highest bidder actually and I do not get a lot of jobs I bid on because of it but when I do win a contract I am able to stand by the numbers I give unless customers change things. It is just a reality that some things can be unforeseen and cost additional but that does not happen very often to me, I have usually anticipated a certain amount of this type of thing and built it into my price (hence not being the lowest bidder) yet time and time again I see cheaper guys taking jobs and in the long run they do lesser quality work and it costs more. I have been doing what I do for 24 years, I pretty much know how things will go and can estimate very accurately. I find it extremely offensive that this person who wrote this seems to think everyone in the trades is a crook. Id love to know what you think a guy like me should make in a year. I bet its something shockingly low. If you cant afford home remodels dont do them To sit here and rant on about how all tradesmen are crooks is total bullshit. the hardest working people I know are in the trades, guys who have nothing but a paycheck, no security for there future, no insurance no nothing,they beat there bodys up for 20 bucks an hour and that is because people want to pay obscenely small amounts of money for there projects and have no respect for the craftsman involved. I have people all the time that expect to get something done for less that it would even cost for me to buy the materials. So yeah, from my perspective this guy is way off base. sounds like a nightmare client to me, one I’d pass on . don’t work for a guy like this. you might find someone who says they will do something cheaper but are they licensed? bonded? insured? do they actually know what they are doing? do they actually know how to properly estimate a job? if all of those aren’t yes then you are a fool to hire and deserve what you get.
I do agree. He is way off base. He said he pulled a permit in 1.5 hrs. And that it usually takes 3. He doesn’t have a clue what he’s talking about. May name is Bart Koonsr my email is cbkoonse@gmail.com
wow you are a construction workers worst nightmare. clearly you have no resect for people who work in the trades and think they should make very small amounts of money for there many years of experience. you said you paid 3 guys 1100 bucks to work three days? ok the second day it was two guys, still that’s less than $200 a day each assuming we are talking 8 hour days, so $25 dollars an hour? and they pay there own taxes, insurance,surity bond ect? you are not an employer so you are not providing them health insurance or 401k,workmans comp or anything like that, so $25 dollars an hour is absolute shit pay for any professional tradesman. You do not understand all that goes in making things work when you are a tradesman particularly a licensed contractor who is abiding by the laws and paying his/her taxes. you need to check yourself. I wouldn’t even start my truck for that kind of money, you have no reason bitching. I run across fools like you all the time, the materials alone for something might cost $1200 and I need to charge at least 350-400 a day for labor for one guy, and that guy isn’t makin that much but there is payroll taxes and insurance and all kinds of crap to consider. so I give them a price $1800 so I can actually make some kind of profit,its not a charity afterall its a fucking business and they pass and go with some shithead drug addict who will work for 10 bucks an hour and hasn’t payed taxes since 1990 or ever gave a single thought to his future. you are a piece of shit who has no value for skilled tradesman. You should be blacklisted and no one should ever provide services for you.
Richard, did a deal recently go bad to cause you to vent on this article? If so, please share what happened and your lessons learned.
I’m assuming you found this article through a search on Google due to a problem.
I pay for all materials.
As a GC, I find this statement hilarious.
“As in my example, I was able to get guys to immediately do the paint job for $2,000 less. Unfortunately, they realized the work was too much so they bailed. This is actually a good sign that I negotiated a decent deal, because if I negotiated a bad deal, they would have gladly kept going to take my money.”
So, if I understand correctly, your benchmark for a bad deal is when you enter into an agreement with another party who fulfills their part of the agreement at the agreed upon price and you have to pay them upon receiving the service/work you requested to have done.
“if I negotiated a bad deal, they would have gladly kept going to take my money”
The measure of a “decent deal” is when the other party walks on the agreement?
Is it possible the goal of having some remodeling work completed by a professional has been replaced by the goal of getting a “deal” that obviously, as exemplified by your experience, benefits no one?
Just trying to stay positive after they broke their agreement and wasted my time.
People buy a house, and think they can manage a remodel. They have no idea what is involved, how any of the trades work, what order things are done in, and most importantly contractors are not your buddies who work for beer and pizza. they have families to feed, and your new home having hidden issues that increase time and cost are the problem. This is why a good contractor stops work, sends everyone home, and renegotiates the moment your little code violation or substandard foundation the new work will finish (example crumblng concrete, bad wiring, poorly placed plumbing, missing structural support, adequate surface prep, out of level plumb and square everything…) rather than proceed at his OWN COST to rectify issues that are not part of the agreed upon work. Next the overleveraged detail oriented “real estate investor extraordinaire” cant come up with money to pay for the work. also loves to change things all of the time, different lights, change finish types, does not want to pay for licensed plumbers or electricians, not interested in pulling permits or having them pulled, has work done by idiots he/she finds on craigslist in the wrong order example drywall install and finish work before installing electric, plumbing, or even adequate framing. I am both, real estate investor, and contractor, I have done this long enough to know it is much easier to find a good guy to do some work, than to find a client to work for who isn’t a hussler. My favorite line is “call somebody else” I know your type, I see you a mile away, I wouldn’t cut your grass. YOU CAN DO IT YOURSELF, ITS EASY AND FAST RIGHT?!!! should only take 5 minutes. Jeeze, I’ll even buy you the pizza so and beer so I don’t have to work for you.
You make all great points. Thank you for this perspective. I do not wish remodeling on my worst enemy’s. If you want to get a divorce, go for a full remodel.
Welcome to the Jungle?
Where are the stories about,
1. Changing the scope?
2. Inherent defects in the EXISTING HOUSE?
3. Picking more expensive finishes?
4. Casually and easily villainizing the GC?
5. Poor planning and rushing into important decisions.
Try googling Contractors getting screwed by homeowners, which in my humble 33 yrs experience is usually the case, the owner holds the purse and uses to withhold, and or sue for final payment.
I have had extremely wealthy, successful, very intelligent clients shake their head at me and say “I don’t know how you do this?”
The contractor does not dictate what needs to be done, he doesn’t choose the finishes, he doesn’t decide on the scope of work, this is the homeowners job, so why do people rush out and hurry into 500,000 to 2 mil decisions? Because it’s very complicated and involves many variables that are constantly changing, including many different decision makers, throw in designers, absent partners, and hundreds of minute details to decide on etc… ????
Wanna have Control?
Wanna make sure you are aware of every minute detail?
Either A. Do it yourself.
Or B. Educate yourself, so at least you know what your looking at.(stop blaming someone else)
Or C. Take the time to do your homework, purchase everything in advance, pick
ALL of your finishes, colors, faucets, appliances etc.. AND DONT CHANGE YOUR MIND ABOUT ANYTHING.
Otherwise Admit that YOU are part of the problem, YOU are participating, YOUR house condition is not the builders fault,
Think about how much time we spend deciding on a TV or a Car, spend 10 times that planning your remodel.
Like I always say, “No one whats to do their homework” “I just want it done”
“I don’t want to deal with this or that”
Time
Cost
Quality
Pick 2 and stop blaming everyone else,you dont even know what you’re talking about, or what your looking at?
How do you know how long it should take?
How do you know how much it should cost?
These kinds of forums make me sick,
Do it yourself
Great perspective from the other side. Thanks for sharing. I could make your comment into a new post for sure.
I needed a bathtub replaced and the surround tiled. I hired a young guy off Craigslist who had plumbing skills and he ripped out the shower/tub combo, put in the new tub for $100. He admitted he was not skilled in drywall or tiling, so I checked out craigslist for a tiler. I had three different guys submit me bids on what was a moderately skilled job. One wanted $8,000 for 76 sf of tile. Another wanted $1,500, and another $800. I went with the $800 guy and he lasted half a day. He cut out the backer board and slapped it on the walls with the wrong screws that were not flushed, and when I came into the room to look, I noticed that the backer board bowed at each end of the tub, and it didn’t align with the drywall by half an inch (he hadn’t bothered to shim the studs so backer board and drywall would be flush together) I was mad, and fired him. I then sat down, and posted on my FB page to the local FB Yard Sale group showing photo’s of the work this guy had done and requesting people to come fix my bathroom nightmare. I got over 30 people who wanted the job, and finally found my guy. He sent me photos of his recent jobs, and gave me a price on the fix that was $1000. In all, I pays to think outside of the box, and have as many people lined up that will work for you as possible in case you need a backup plan. I finally got my new bathroom, and in a timely manner.
I think your “friend”, the GC was unethical in his behavior and impulses, and I think you don’t have quite enough respect for truly skilled tradespeople. The combination created the result.
By the way, I never “bid” jobs because they’re misleading. This is a common practice that I find dysfunctional. I figure out what a job will cost me and I do meticulous planning up front, and during work, my client is kept in the communication loop on a daily basis (even if it’s just to say that I will only be on the site three hours “tomorrow”). Then I add my necessary profit which is my reward for doing good work. That is my price. It can only be lowered if less work is desired. If prospective clients balk at my price, then we are likely not a good match for each other and I give them the name of other businesses. I don’t do a lot of jobs per year because my needs are spare. This degree of punctiliousness on my part cannot possibly serve the needs of most builders, but it works for me.
Something else; it can be difficult for a client to compare two estimates based solely on price. The cost for a given job in a given area probably (?) falls within a 15% margin compared to the same job being performed by another builder, but the differences often lie in preparation, quality of skilled labor, and professionalism, or even size of company and the resources they can bring to bear on a job.
One thing I’ve noticed is that you get what you pay for with bids. When I was getting quotes for a central A/C system for my house last year, one guy quoted a price 20% lower than the next lowest bid and just over half the price of the highest one. But he missed his install appointment three times before he finally installed the unit, in the middle of a heatwave while I had an infant in the house.
Of course, in my day job in road construction, I also see the quality that low bid can get you, with fly-by-night companies that don’t follow rules that are designed to keep them, the contractors they are working for, and the public safe. I’ve personally went out on more than one job where my company was taking over for another company that had been kicked off the project for this.
If you want to hire painting contractors to paint your house, be careful. Most painters will brush your room with a broom, then start slopping it on. I would recommend hiring three ladies to clean the walls for about a week. That’s right, a light TSP and bleach solution. You can also hire a couple of teenagers to keep rinsing the ladies buckets. have them scrub the walls with soft sponges, and get all the dust, and grime off the walls. Your paintjob will last 15 years. If not, areas which have dirt, or have been painted multiple times, will bubble up rapidly.
I can’t agree more with this article . I just went through this and yes I am a first time remodeller .
There is a ton of misinformation here. First of all, only sign a contract that includes line items for every piece of work you want done. Only take lump sum bids, and don’t expect the cheapest guy to actually have it all the first go around (he’s missing permits, qualified supervision, something!).
Do not mix monies for fixtures and finishes like some have said, unless you have an architect or firm specifications. If you buy some ornate door hardware and expect someone to install it, as if it is something mass produced, they will ask you for a change order.
Economies of scale are a huge factor in pricing construction work. If I have to send my best carpenter 50 miles to your McMansion at rush hour on a Friday, you can bet that trim install that “my buddy could do in an hour” is going to get pricey.
Existing conditions are huge, as a painter noted above. If I value my work, I’m not going to just “paint over it.” Half the time clients are cool with winging it, but then they cry foul when obvious existing conditions cause problems in new work. You(moneybags)decided to call a pro, now pay for the work, and do it right the first time!
Clients are inherently biased when it comes to estimating costs of their projects. Professional estimators know that an 8 hour day includes smoke breaks, texting, tons of gasoline, and in general, tons of lost time. The best and most responsive Contractors have equipment and men ready to mobilize to knock out your project, and tons of other overhead costs. Avoid low ball prices on large remodel projects at all costs, these are the guys you find tearing up a 4×4 section of carpet instead of replacing the whole thing! You get what you pay for!
How is this misinformation by a contractor himself, and with countless examples of remodeling costing more and taking longer than expected due to shenanigans by contractors themselves?
If a price and time is agreed upon, STICK TO IT.
Like all professions, general contractors have some bad apples, and unfortunately the horror stories make the news.
In face, I point out these horror stories on my blog https://leadingedgehomes.com/LEHblog and through my website http://www.leadingedgehoms.com, so that homeowners can avoid these situations.
As a general contractor, I could not agree more about having a fixed price contract. The only exception is if there are hidden conditions (such as you remove a wall and find hidden electrical violations – which just happened yesterday at one of my jobsites) or if county/state code requirements change that may add an extra cost.
People need to do their due diligence before hiring a contractor. Make sure they are licensed, check references, and verify they have the proper insurance. The homeowner must feel comfortable with the contractor – you are trusting them with your most important investment, your home.
I never find construction who stick with their promises, they day robbers, no ethics atall better to stay away from them if possible.
Thanks, FS! I actually put this exact term into Google:
do people use “lendingtree” anymore
You’re like the 5th result..!
Very cool. I’ve been investing in real estate for about 15 years, and you’ve just got to be diligent with everything. I’m going through a current remodel now and building a new bathroom downstairs. Gonna be a long journey!
Yes, LendingTree is highly used. Give it a try to get the best rate. You’ll get a lot of banks bidding for your business.
Oh good, wasn’t sure about LendingTree, don’t hear much about them lately.. then again, I haven’t had cable in ages, so that might be why. Should be doing work-stuff, but am instead going through your site.. I think I love it here! Good luck with your remodel..!
So glad I stumbled upon this post..! Am looking to purchase (1st time) and do a remodel.. *GULP* Will be perusing your other posts on the subject.. Thanks! :)
Good luck! How did you find this post? I’m always curious to know. Thx
I own an 50s cottage with an added sunroom in 70s with too large glazing. Of 3 huge window panes one popped due to some ground movement/settling. This is a small, more remote town, one bid came in hand written in pencil, one was typed, better detailed. I hired this well known local company to replace, thye ordered the custom size safety glass, and when his guy was installing he broke the middle window adding exterior trim back. Owner ignore calls for several hours, then said they were not responsible for breakage! I told him no one would sign a contract if that were the case, I argued for free glass, or at least getting the glass at his cost, and not paying the extra labor. He refused, rushed me to close up and not wait for custom size, (it was November, weather could change) and put in REGULAR glass he had in shop (breaks as shards), ‘said’ he charged me his cost, DID charge me labor. I was totally furious because he was too cowardly to take my calls when trouble occurred. Had he been more professional I would have been less upset. A contractor friend later told me that type sheet glass is not “to code”, and now I have to disclose it when I sell. My worst fear is I don’t want a visiting child to accidentally get an arm cut off if they fall against it/break it, and I worry over quakes here in Nor Cal. So I keep a table in front of that window.
They say a happy person tells 2 people about good service, but an unhappy one tells at least 11..so I vote with my mouth and give their name when describing that repair. With Yelp and other net resources it is possible to warn others.
Labor is quite inexpensive in my part of the world. However, the modus operandi is same as you have mentioned. I have gone through renovation of my apartment a few months back. I know the contractor since years and he has worked for me on number of projects. However, my project went through all the phases mentioned here and ultimately I ended up paying more than the actual budget while not utilizing the all the fixtures that I have planned to use in the project.
Be wary of laborers and contractors, they seem innocent and friendly but they turn out quite shrewd business people.