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JULY, 2002

HOUSE-N-HOME-BUILDING.COM NEWSLETTER #207

House Construction Contractors

James Todd
July, 2002
Happy Independence Day!

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Beginning with the April 2002 edition, newsletters are now archived
online at: http://www.house-n-home-building.com/newsletters/newsletters.html
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CONTENTS:

1. Ten Keys to Success When Hiring Construction Contractors
    Special Feature Article by Mr. Chris McMinn, Friendship Press
2. Useful Links
3. Thought for the Day
4. Subscription Information

Please forward this newsletter to anyone whom you think may be interested!
 

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1. Ten Keys to Success When Hiring Construction Contractors
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As we did last month we are featuring in the July edition of the newsletter a guest article.
This month's article discusses the hiring of construction contractors. As discussed in the
House-N-Home Building Guide, you need not be your own GC to save thousands of dollars.
In fact, we advocate hiring a builder or GC and putting them in charge of the building process-- which includes the hiring of the many required subcontractors. However, it is probably that many of you will hire a contractor or two along the way - and when you do these tips will come in handy.

1) Watch out for a lowball price– the price you think you want to hear. "We have some materials left over from a job up the street..." Or, "We have a crew in your area and can give you a great deal..." Or "How much can you afford? Sure, we could do it for that!"

Reputable contractors rarely give you instant quotes unless your project is simple to bid from a unit price point of view– like square yards of carpet installed, driveways resurfaced, or flat concrete walkways. All other projects, including residing, new windows and re-roofing take some forethought and inspection. A quick offer to bid nearly always indicates the "contractor" is well versed in ways and means to hit you with extras. His initial quote is just words. The quicker he is with numbers, the more likely it is they will go up– dramatically– once you agree to hire him.


2) Watch out for verbal quotes with no supporting written bids, or sloppy two line
estimates with vague, ambiguous wording.

These usually leave enough room for an oil tanker to slip through. Good contractors are careful and meticulous in describing their work. They explain exactly what they will, and won't do for a given price.


3) Watch out for "We'll need a few thousand up front to buy materials..."

In many states, licensed contractors– by law– cannot collect more than a small percentage
"up front." Reputable contractors will explain their billing methods and only bill for work done. If you like a contractor and he has GOOD REFERENCES, which you have checked personally and his claim for material money is legitimate, make a check out to the material supplier for the supplies needed, spelling out on your check that they are to be delivered directly to your property. Never pay any contractor for material without an invoice from the supplier– and– call that supplier yourself. Remember President Reagan's great advice: "Trust... but verify."

4) Watch out for "If you can help me out with materials, I can give you a great deal..."

This often follows on the heels of the one above. Good contractors have great credit, not to
mention substantial legal rights if you fail to pay them for their work. Sometimes flaky
contractors, having no credit (or cash), ask you to buy the materials directly. "That way
(they say) you know what you're getting and you keep all the discounts..." Then comes this
next request: "Can you give me a small payment towards my labor?"

Before you know it you may have a pile of mis- ordered material on your front lawn and the
"contractor" has collected $500 for labor– but you never see him again. Watch out for all
appeals "for help." Good contractors have their act together. They won't risk their reputation and time on shoddy business practices and dubious requests.

5) Watch out for the phrase, "I've just moved back into this area, and I need work now..."

This is usually given when you ask for local references– for other people in your neighborhood you can call. If he will not give you three local jobs which you can see (and must see), which establish his previous work record for at least a year, don't go any further. Local references are essential. As painful and embarrassing as it is to call up complete strangers, you absolutely MUST do this, and go see those jobs.

6) Watch out for " I can give you a knock out price if I can work it on the side..."

Get a contract with a schedule. "We will start on (date) and be finished by (date). Those
side jobs, or "moonlight" jobs will drag on... and on...


7) Watch out for "Yeah, of course we're legal. My brother/uncle/nephew has a
license, construction business/store/works for Lowe's, Home Depot, the state,
Federal Government or a large local construction company (fill in the blank)...

Ask for licenses wherever they're required (call your state's department of consumer
affairs to find out what's needed). Check them carefully against your contractor's driver
license. They should be the same. If not, start asking questions...

8) Watch out for "Do I have liability insurance? I can get it if you're really
worried about that stuff. Ditto for Workmen's Compensation. "You really want
that too? I can arrange it, but its going to cost a lot more."

Good contractors are insured and carry Workmen's Compensation. This is still no guarantee.
Legitimate contractors can still take advantage of you, but basic insurance is a minimum–
unless you have a spare billion and can handle any possible problems and/or law suits.

9) Watch out for "You want me to get a permit? You know you can take out a permit as an owner builder. You'll save money and things will move faster."

Marginal contractors cannot take out permits in many states because they have neither a
business license (usually required by the permit issuing authority) or Workmen's Compensation.  Again, ask...

10) Watch out for "These plans are fine. I can work up some numbers and if it works for you, we can get started next week..."

Beware of too ready acceptance of plans and a push to get started. This can mean that contractor (from past experience) knows that whatever is missing he can turn into extras– which you will pay for. Good contractors review plans, come up with questions, explain your options and give you detailed cost break downs– line by line. (Not lump sum bids). They have nothing to hide. They don't push for money. Fully 98% of the plans we see are missing important, essential details, guaranteeing inevitable cost overruns. Get your plans tuned, detailed and reviewed by someone other than the person who prepared them, before you start looking for bids.

No plans? Find a retired contractor and pay them for advice. For fifty or a hundred dollars of their time, they'll save you a lot more.

Banks train their tellers to recognize counterfeit money– not by focusing on fake bills– but by spending a lot of time handling real money.

You can use this same approach to plan for a successful construction project by doing what's
right– not living in fear that someone will rip you off. If you would like to know more about
planning for success, please check out our web site @ http://www.Friendshippress.com

Copyright © C. S. McMinn 2002

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2. Useful Links
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The following are useful links that I have come across that might be helpful to you in
your home building project.

LoanWeb.com - This site has a nice set of financial calculators, in addition to providing
financing for all your home building, buying or remodeling needs.

Realty Times- This is a high traffic site that was rated by Yahoo Internet Life as the
"Best Real Estate News". This site contains volumes of useful information and as a page of articles for people building a new home.

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3. Thought for today: Get Involved
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To sin by silence when they should protest makes
cowards of men. --Abraham Lincoln.

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4. Subscription Information
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