Don’t Be Enticed By Too Low a Price

An industry expert once said, “Remodeling horror stories often begin with a great price.” Although consumers regularly use price as one of several deciding factors in making major purchasing decisions, savvy homeowners know that a too-low price can signal big problems and major unexpected costs ahead.

**Here are some caveats to heed before signing on the dotted line:**

Low Quality Products Cost Less
Some homeowners mistakenly assume that all building products are created equal. And while one nail may indeed be indistinguishable from another, this is not the case with many other building materials such as wallboard, structural materials, insulation, windows, doors, flooring, roofing or counters and cabinets. As you would expect with anything you buy, better quality, longer-lasting products cost more money. So a low estimate may be a sign of lower quality, less durable materials being used. When you get a remodeling estimate, make sure you understand EXACTLY the quality and specifications of the building materials to be used in every aspect of your job.

Poor Planning Can Lead to Unrealistic Pricing
A too-low price can mean a remodeler hasn’t based the estimate on a detailed, comprehensive work plan. Sometimes this is because the remodeler is really more of a carpenter, and is not experienced in planning and estimating costs. Like a cake that falls when you don’t follow the recipe, a remodeling project goes wrong when you don’t do the right things at the right time. Cost, quality and schedule control requires solid upfront planning and conscientious project management. If a job is plagued by poor estimating, planning or execution, critical time can be lost at many stages of the project, resulting in cost overruns that are often passed on to you, and cause you inconvenience and headaches.

Desperate Companies Resort to Fire Sale Prices
A lower-than-expected price is a red flag rather than a green light. When the economy creates tough times for remodeling businesses, some may resort to booking jobs at any price in order to retain their staff and trades people in the short-term. An experienced, reputable builder knows the real costs for quality materials and skilled labor, as well as the profit margins needed to stay in business. A company who chooses to ignore realistic pricing in the short term will have to cut corners somewhere. There is a chance they won’t make it in the long-term, and will perhaps leave you with a half-finished project or a project that is not as good as promised.

Low Estimates and
Less Skilled Labor
In every industry, workers with the highest level of skill and experience command the highest salaries. The remodeling industry is no exception. If you receive an estimate that is surprisingly low, you should question whether less skilled, less experienced workers are going to be working on your job. Remember, you will be living in your newly remodeled home every day for many years, and no homeowner is ever satisfied with poor craftsmanship.

Allowances Can
Cost You Big Time
A common practice in remodeling is for a remodeler to provide you an estimate/contract price that is based in part on “allowances.” These are place holders in the budget that should cover the products and parts of the project that you want for your project but have not yet selected (appliances, lighting, finishes, cabinets, etc.). Because a low price is attractive when selling, some remodelers use allowances for low-cost builder-grade components. When the time comes for you to make a product selection, you will have to pay for the difference between what you agreed to and what the product you want actually costs. For many types of projects, this can cost you thousands (or tens of thousands) of dollars you had not expected. A basic low-end light switch costs under a dollar. But if you what you have in mind is a high quality, long-lasting dimmer switch, it can cost over $75.

Low Estimates and Missing Security
If you receive an estimate that is lower than expected, investigate whether the remodeling company saves on expenses by not carrying proper insurance, licenses, workers compensation or does not get required building permits or inspections when needed. Reputable companies always take these requirements seriously, and consider insurance, licensing and permits as a fixed part of the cost of doing business. If a contractor takes illegal and unwise shortcuts here, can you trust them to avoid shortcuts that will cost you money or result in a lower quality, less durable project?

So, if an initial low estimate grabs your attention, stop and ask yourself why it’s so low. Remember your ultimate goal will be a smoothly run project that results in a beautifully remodeled home for you – completed on time and on budget. Chances are, after a little more research, you will decide against making that very expensive mistake.

Maintenance Tip: Look for Ways to Conserve Water In and Around Your Home

Fixing a leaky faucet can save 140 gallons of water per week. Replacing older model toilets with high-efficiency, low-flow ones can save almost 4 gallons of water per flush. Shorten each shower by a few minutes and you can save 150 gallons per month. And get the whole family in the habit of turning off the water while brushing their teeth!

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See you next month!

Terry
Terry Streich, President