Need to hire a person to help with Electrical? Plumbing? General contracting projects?
How to negotiate costs and save money when employing contractors:
When working with contractors, it’s always hard to get a price upfront, and more common than not, the price is more than we expect. However, it always comes down to two things: the size of the project and the time it will take. One way we’ve found success is by declaring the pay structure we will use upfront. We tend to say we will pay an hourly rate + cost of materials, and then discuss that hourly rate and the expected time it will take to complete the project. This allows us to set expectations upfront and have an easier conversation if issues arise that warrant more time to be added to the project.
Tips for negotiating with contractors:
Ask the contractor/plumber/electrician to declare their hourly rate upfront. A lot of contractors actually don’t know their hourly rate, so by doing so you can calculate the total cost of the project once you factor in the materials. If it seems high, double click into what their peers are charging or research other contractors. Always get multiple bids to help calibrate the range you can expect to pay and be comfortable with!
Don’t take flat, upfront, all-in prices at face value. When contractors give a flat estimate at the beginning of the project, I love it because it immediately warrants negotiation. This opens the conversation for you to ask them to explain how they arrived at their estimate, putting the responsibility on the contractor to declare the value of each step of the project. Flat upfront prices will almost always result in you leaving savings on the table and more often than not it doesn’t hold the contractor accountable to getting the job done in a timely manner. Rarely will I work with a flat upfront price!
If a contractor asks you how much you are willing to pay/budget for the project, always default to “ideally zero. I’d like to pay $0.” Then continue to press the contractor for THEIR estimate. As the old sales adage goes; the first person to name their price, loses. This tactic of minimally answering deflects you from showing your cards first and it prevents you from starkly overestimating if you are uninformed of material or labor costs for the project.
Tactics to make it cheaper for you and more efficient for the contractor:
Purchase as much of the materials on your own time and have it ready for the contractor on site. This reduces the time you pay your contractor because if they have to make a trip to the store, they are being paid their hourly rate to shop! This can really add up if your contractor has an expensive hourly rate. So, save some time for them and order everything beforehand or go purchase it yourself. More often than not, a contractor will insist on running to the store themselves. This is your opportunity to push back if you want to save some money. For instance, in Seattle, electricians can charge roughly $160/hour… the time I save by pre-ordering the socket parts is time added back into the project for the electrician to (a) get more done, and (b) spend less time shopping and more time leveraging the electrician for what I hired them for.
Be mindful of who is drilling into your walls: Plumbers stick to plumbing, electricians stick to electrical, and builders stick to drilling. Plumbers aren’t always aware of some building codes, similar to electricians not necessarily knowing how plumbing should be threaded. We ran into an issue with our first plumber during our renovation drilling huge 3 inch holes through four consecutive wall studs so he could relocate our sink pipes. Two things were incredibly unsafe about this: (A) 3 inch holes through a 3.5 inch stud makes the stud EXTREMELY unstable. Rule of building is that you can only drill into the middle-third of a piece of infrastructure wood… and the hole cannot exceed more than ⅓ the width of the wood. (B) You are supposed to only drill large holes through 2-3 consecutive studs AT MOST. This lack of oversight on our end cost us another $1,000 - we should not have let the plumber drill these holes the way he did. We had to pay for another plumber to come to our house ($160/hr) and sister a steel plates to each of the studs in order to reinforce the support.
Moreover, I want to share some additional advice from a colleague, Mike Judge (@mikebuiltsomething), who has been working with contractors for over 13 years. In his own words:
Many times, you get what you pay for. Period. Cheaper isn't necessarily better. Sometimes cheaper is just not good work and will end up costing you when you have to rework it! You also want someone that if they legitimately find a problem, they will resolve the problem, so it’s properly repaired.
Referrals- do your homework, understand the personalities. If you are like me, and hover, will your contractors be ok with that? Are your contractor ok if you do some work, mine don’t like it if homeowners want to do work themselves. Do they respond to text or emails, will they call if there is a decision to be made.
If you find a trusted contractor- stick with them! Reliability, trustworthiness and business understanding AS WELL AS construction understanding is gold in the industry. When and if you find someone that has that, that’s worth quite a bit. Not all contractors are created equal.
Clarify who is actually doing the work: if they sub it out, are the subs trusted and have they collaborated before? If they say they have never used someone before, pay extra attention!
Have a plan, stick with the plan- Be careful with scope creep, just because the ceilings are open doesn’t mean lights are free! All costs are compounding! Nothing is free just because it looks like it’s easy. When they say, “sure we can do it that way” you need to hear the silent prefix which is “it will cost more”.
