There are a number of ways to bargain with a contractor for a lower price, but it is not always wise to do so.
The first question when negotiating a better price with a home contractor is; how big is the job? If it’s tiny, such as fixing a leak, unblocking drains, repairing an appliance or installing a lock, just “krunch.” An example of a krunch would be, “You’ve got to be kidding!” Or, “Can’t you sharpen your pencil on this one?” A krunch works when there isn’t time for another estimate, and the contractor isn’t making that much money on the work.
Negotiate Costs on Small Jobs
If the job is small or entirely straightforward, such as replacing a sink, building a fence, painting a room, refinishing a hardwood floor or constructing a small deck, then negotiate assertively, pick the lowest competent contractor, and define the work carefully in the contract so that nothing can be avoided.
There’s More Room to Bargain on Large Jobs
If the work is more elaborate such as new construction, an addition, or remodeling a house, greater discretion in bargaining is called for. This is also the case where specialist equipment is required, if you need someone for example, with an arcrite welding equipment range, you are going to expect to pay more, obviously While it’s unlikely you’d have a “payback” problem from too-aggressive negotiating with lawyers or doctors (imagine the revenge a plastic surgeon could invoke!), home contractors are a different story. On larger jobs, contractors have an overwhelming number of ways to cut costs and add extras. The more financially squeezed they feel, the more inclined they will be to do so.
Quality and Dependability is Important
Concentrate primarily on finding a contractor who will do your job correctly, whether it is a small job of building a garden wall or a big job like a loft extension. Getting the work done for a reasonable price is an important but secondary goal. Set aside all thoughts of vanquishing the contractor. Remember that bad construction is like a bad haircut: the discomfort continues long after the work is done.
Obtain Competing Bids
Always get at least three quotes on anything more than a small repair. Some contractors have begun charging for estimates, so determine beforehand if there’s a fee. Don’t look for contractors in the Yellow Pages; referrals are the best source. Ask neighbours and friends who have had similar work done and were pleased with the outcome.
Have the most prestigious contractor bid first. With this contractor’s assistance, define the specifications of the job in detail. Be sure each subsequent contractor bids on the same specifications.
Insist that each contractor itemize his bid: The more detail provided in each estimate, the better the job is likely to turn out; providing more negotiating options. If only given a price for the total job, the homeowner can’t do much more than a simple auction among bidders followed by some krunching. Itemization reveals the soft spots in each bid. With itemized prices a homeowner can better compare each contractor’s appreciation of the difficulty of each element of the work. The quality of materials each contractor uses will be apparent, as well as potential misunderstandings and corner cutting. If the homeowner decides to take on some of the work himself, such as painting, he’ll know how much to deduct.
The bids received may vary dramatically: Larger outfits tend to charge more because of higher overhead. Individuals and family firms may not have to pay workmen’s compensation insurance, so they can bid lower. If the homeowner lives in a high-end neighborhood and has an expensive car sitting in the driveway, he’ll likely be charged more. If the homeowner is friendly, he may be charged less. A very common reason for a low bid is that the contractor has a gap in his schedule. If he has no work for his crew, he can’t pay them and they’ll leave. He may bid a job at cost just to keep his crew together. A surprising amount of pricing is plain guesswork.
Roll Up Your Sleeves and Negotiate Everything You Can
Once the bids have been obtained, it’s time to really negotiate. Never simply choose the low or middle bidder. The lowest estimate is rarely the best deal. The workmanship or materials may be inferior. The bid may be a lowball on which the contractor plans to profit through expensive “change orders” after the work starts.
Start with a little cherry picking: Compare the bids on a task-by-task basis, and have the higher bidders either justify or reduce their price for each task. A contractor who refuses to reduce a bid may have figured it scientifically—even by computer. On the other hand, a contractor who bids on the spot or concedes too quickly may just be pulling numbers out of the air.