We have all heard the horror stories of Contractors gone awry. A lot of you may have experienced this yourself or know of someone who has. Through all these stories, explanations and exclamations, two things are always missing…..COMMON SENSE ETHICS and plain old COMMUNICATION of EXPECTATIONS.

I have worked in and around this industry, and on both sides for the last 25 years. I have worked directly for owners who wanted me to treat their project as if it were my own money being spent. In other words, I was expected to squeeze the contractor for everything possible. I have also been in charge of several multi-housing rehab projects at a time, consisting of as many as 3000 units. It can get extremely confusing and scary even on the best of days.

On the flip side, I am now a business owner that specializes in turn-key renovations. I am one of those dreaded contractor! As I have watched and listened over the last few years, I have noticed the breakdown in relations between investors/home owners and contractors. I have now decided to speak out in order to ease the tension and stress of hiring and working with contractors.

These simple steps should ease the anxiety of hiring and then dealing with your contractor. Despite popular opinion, there are decent contractors out there who care about you and your needs. We are not all out to get you! It is not actually as hard as it seems, but it can be time consuming and you may have to put in a bit of effort.

If you are honest with yourself as well as your contractor, and if you properly communicate your expectations, you should end up being satisfied with your completed project. Always remember that higher expectations mean higher prices. The old rule of getting what you pay for still applies. Be honest and realistic and half the battle is already won.

The first step is to determine the type of contractor that you will need. Are you looking for individual trades so you can GC the job yourself? Are you looking for a general contractor that supplies all the trades that you will need? Is it a minor job that will only require only 1 or 2 trades? Be realistic with yourself and answer these basic questions:

1. Who is actually going to run the job on a day to day basis and be at the jobsite?
2. Who is going to make the day to day decisions and determine the order in which things are going to get done?
3. How much work really needs to be done based on what your goal is for the project?
4. Do I have a viable scope of work or does one need to be created?
5. Who is going to supply the materials?
6. Do I have the qualification’s to actually oversee the project?
7. Do I have the time to actually devote to oversee the project properly?

By honestly and realistically answering these simple questions you are now ready to start your search for a contractor. Let’s address these 7 steps and break them down to determine who or what you are looking for.

1. Who is going to run the job? If you plan on being the GC yourself, then save yourself and us a lot of headaches. DO NOT CALL A GENERAL CONTRACTOR! Look for the individual trades that you require. Do your own homework and research. Make your own phone calls and devote your own resources in finding the trades you will need. It never ceases to amaze me the number of people who call every week to ask who we use, who I can refer, if they can use our guy’s, if they can call our guy’s direct, what is our pricing for certain items and what is the mark up for certain things. Our answer is always the same. If you are going to GC the job yourself, then it is your responsibility to find these things out for yourself. We are in business to make money and support our families. We are not here to give these things away. It is unprofessional, unethical and extremely unfair to even think of doing this to a general contractor.

2. Who is going to make the day to day decisions and determine the order in which things are going to get done? It is important to know what needs to be done and when it needs to be done. If you feel you have the qualifications to do this, refer to #1. If not, then start your search for a general contractor.

3. How much work is there to be done? This plays a large role in determining who you will need as well. I would recommend that if you are employed full time, call a general contractor. If you are unfamiliar with the type work being done and are not sure how it is to be done, or where to start, call a GC. That is what we are here for.

4. Do I have a viable scope of work or does one need to be created? Are you truly qualified to create and price the scope of work? If you are, refer to #1, but if you are not, call a general contractor

5. Who is going to supply the materials? If you are planning on doing this, at least communicate it up front to your contractor. This requires that you supply your contractor with a specific list of the materials you plan to use, and also allows the contractor to decide if this is the way he wants to operate. He can then properly price out the project cost given this knowledge. Please do not assume that the contractor will be glad to deliver materials for free. If you are going to purchase and deliver, please communicate this to the contractor. This is not a free service. If this is a problem, feel free to contact Lowes, Home Depot or any other supplier and ask if your purchased materials are delivered free gratis.

6. Do I have the qualification’s to actually oversee the project? This involves the ability to converse in technical terms with the individual trades, and being able to understand what is being asked and why. This is sometimes not as simple as being able to get the point across over the phone or via e-mail. It requires your presence on the jobsite. If you are unable to do this, hire a general contractor.

7. Do I have the time to actually devote to oversee the project properly? This is critical. It is important to be available to your contractor at all times if you plan on being your own GC. Time is money. Being unavailable to the contractor will result in a lot of downtime and a disgruntled contractor. Nothing is more frustrating to a contractor who is in the middle of something and needing an immediate decision, and no one can be reached or found.

After considering all of these things, you are now ready to go to the next step of hiring your contractor. Having decided to be honest with yourself, now continue in being honest with your prospective contractors. Most will appreciate your honesty and respond in kind. If they do not, then they are not the contractor for you. The rule we learned as children really applies here. Treat others as you yourself wish to be treated. Remember, do not expect your contractor to take up the slack or lose money just because you have a tight deal. I hear this at least 5 times a week! “This deal is real tight and I am broke,” or “I do not have a lot of money to spend.” Here is the true fact of the matter…..if it is that tight; it is not a “DEAL”. If it is that tight, don’t expect the contractor to make less so that you can make your expected profit, and if you are so broke, then you should not be making tight deals or calling on a contractor. There are no great ‘deals’ when none actually existed to begin with. Facts are facts and it is what it is! Bad deals come about when you underestimate repair costs and/or overpay for a property. Seeing only the dollar signs without having enough knowledge is a sure sign for impending disaster.

I am not about to absolve contractor’s from any wrongdoing either. There are too many unethical contractors whose main purpose is to take your money. This type of contractor gives us all a black eye and is bad for business as a whole. This is the main reason people are advised to get 3 bids. The process of getting 3 bids can be lengthy and costly. If you feel you have to do it, or choose to continue to do it, especially on houses you only have under contract, you will eventually run out of contractors that are willing to show up to give a bid.

Contractors also spend a lot of time and money on the bid process in the hope of securing work. If a contractor never receives any work for all his effort, he will soon become very scarce. It is far more cost effective and less time consuming to find the right contractor and build a relationship out of mutual respect and trust. Pricing is easier to understand and follow on any future projects when you are aware of what the contractor charges. An honest contractor will be there to protect your interests especially when he knows more work will come his way by doing his very best. Promising him the world is not enough; actions do still speak louder than words. These tips are to protect you as well as reduce the crooks that may be out to get you.

Once you have settled on your contractor there are some do’s and don’ts of dealing and talking with your contractor, but first I would like to point out this important and often overlooked fact. The rules are constantly changing. Many local cities as well as the State of Texas are beginning to regulate general contractors. We have to be licensed through the state before we can pull permits in many localities. It is regulated through the Texas Residential Construction Commission (TRCC).

We can no longer be as flexible as in times past. Due to more stringent guidelines, day labor, not permitting and or unlicensed electrical, plumbing and HVAC work are things of the past for licensed contractors. Please be cognizant of the fact that some of your requests could cost us our license and livelihood, so do not be offended if the contractor does not wish to travel down that road. We as general contractors perform a delicate balancing act everyday. We have the local city/county, state as well as the owner/investor watching over our performance. As the GC, we are responsible to make sure all of these city and state agencies, the trades such as the electrical, plumbing, HVACR, carpenters, flooring, roofing, painting, foundation, and laborers all come together in an acceptable final product. The top is pushing down, the bottom is pushing up and it is our job to sit in the middle and make things happen in a harmonious, cost effective, legal, productive and profitable manor for all involved. Please be realistic next time you feel you have to squeeze your contractor out of a bit more of his hard earned money.

DON’TS

Never tell your contractor what another contractor said he would do or charge. If you are unhappy with the pricing of one contractor, you are free to hire another. Do not express the opinions and thoughts of others (Partner’s husband/wife, mother-in-laws third cousin that is a contractor, brother’s fiancée’s ex-boyfriend, daughter’s boyfriend’s father who is a contractor or any other supposed contractor or ex-contractor or worker).

Deal with your contractor in the first person and express any of your thoughts about the project as your own. Contractors do not care what some other person thought. If you have a point to make, express it as your own thought. This will get you much better results and does not threaten or push the contractor into a corner. Do not schedule to meet with more than one contractor during a set time frame. This may be convenient for you, but will generally end up with few positive results. This is unprofessional and rude. It limits your ability to get the best bid with the best ideas. It sends the message that you do not have enough respect for them to meet with them one on one. Everyone’s time is valuable, so do not waste your time or your contractor’s time by handling the bid process in this manner. Do not interfere with the GC’s crews. Do not make direct request of the GC’s crews. This causes tremendous grief for the GC in ways you may not be able to imagine and gives the impression of impropriety. Make all the major decisions up front and stick to them. Changing your mind in mid stream may cause additional expenses. This is time consuming and often winds up costing the GC money and is a major issue in relation breakdowns. Do not ask your contractor to bid things several different ways. It may be simple to say but difficult to do. Make up your mind and stick to it unless it is absolutely unavoidable. If it comes time to part with your contractor, do so professionally. Do not try to hire his people out from under him. It rarely ever works out for anyone. Do not dangle the contractor’s money like a carrot to get more out of him. This never works. Money issues are the largest of all issues between contractor’s and investors/owners. If you do not like the pricing and cannot agree on the cost, then move on to the next contractor. Beating your contractor down does not promote trust or respect. It usually just plants the seeds of distrust and disgust which leads to imminent disaster for all.

DO’S

Be polite and always expect the contractor to do the same. Treat him as you would want to be treated. Be fair in your request and expectations. Express any concerns that you may have, and establish a viable scope of work. Establish payment and work progression terms and stick to them. No one likes to have their payment dangled in their face with additional conditions tacked on. If you have a partner and or partners, decide which partner is going to deal with the contractor and communicate this to him. Only deal with the general contractor or his appointed representative in making any changes to the original scope of work. Always request that any change orders come directly to you for approval. Be prepared to devote the necessary time to review the work, deal with problems, make decisions and do final walkthroughs in a timely manor. Respond to all requests from the contractor in a timely fashion. If your intent is to get numerous bids and compare them and then piece it out according to who gave the best price on each item, tell the contractor’s up front. Let them decide in advance whether or not they wish to do this. Do not be surprised if this eliminates most or all of the ones that are bidding. Most reputable contractors and or GC’s do not do business in this way. This promotes good relations with the contractor’s you contacted regardless of whether or not they stay in the project. It shows tremendous class and respect for them as a contractor and a person and no bridges were burnt. Please feel free to hire whoever it is that is giving you the advice/pricing of the work to be done!!! (Partner’s husband/wife, mother-in-laws third cousin that is a contractor, brother’s fiancée’s ex-boyfriend, daughter’s boyfriend’s father who is a contractor or any other supposed contractor and or ex-contractor or worker) In short --------BE PROFESSIONAL. This is your money being spent! A good contractor does want to please you and return a product that you will be very satisfied with.

By conducting yourself in an ethical, professional, and courteous manor you as investors/owners are setting the standard for all to follow. This will result in a profitable and ongoing relationship with all who are involved within this project/industry. You the investor/owner cannot survive without contractors and contractors cannot survive without you. We are all here to make money. As long as everyone involved in the deal profits from it, everyone is happy. The happier everyone is, the more deals will be successfully completed. Remember; never steal from any part of the industry. It will eventually come back to bite you, and it only takes once for it to ruin everything you have worked so hard for. Then the only thing you have to show for it is a path of destruction, burnt bridges and half done and shoddy work. Squeezing and brow-beating your contractor is stealing from the industry. Make the best deal based on accurate assessments. Make your profit and allow everyone else to make theirs. These are the deals that drive the industry, and really make it a ‘TRUE DEAL’ for everyone involved. Otherwise, we are contributing to the problems that continue to plague this industry. The end result of this is the new heavy regulations of the trades and the new tougher laws governing how we do business. This leaves the impression on everyone, including our lawmakers, that we are nothing but a bunch of crooks. We have the power to change this. Let’s work together for a better future in our industry.
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