Why Does It Seem Like Contractors Want To Cheat Customers Out Of Their Money? - Remodeling - DIY Chatroom Home Improvement Forum


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Old 11-26-2007, 07:20 PM   #1
sil
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Why does it seem like contractors want to cheat customers out of their money?


For the last 2 months, I have been doing almost a complete remodel of my living room and kitchen. Whenever I get a bid for the exact same way for doing something and supplies needed to do a job , I get a wide range of prices. It doesn't matter whether they are licensed or not. For example, I got a bid for doing some drywall and replacing studs. Bid came from $500 to $1300 plus materials. For painting a kitchen , bid was $275 to $675 for labor and one coat of paint. For a complete cabinet refacing with the same doors and thickness of veneer, the bid was $8700 to $13800.

Do you really think that contractors are TRYING to rip me off by thinking I am a single woman and don't know anything about prices? It sure seems this way. I think it is very unethical. Someone did that several years ago and I took him to court, won the case and reported him to BBB. I told friends , co-workers, message boards people and everyone I knew about his reputation.

In fact, I had one guy come over and said he charges $250 (or something like that) to measure the cabinet doors for me and than said he would apply the credit towards the refacing job!!! How funny and I certainly didn't get fooled to do so. I am not stupid enough to pay someone $250 up front just to have him give me a ridiculous price and then subtract it from the price of the job. How funny! Can you imagine him quoting me for $20k or something like that.

If no one wants to answer, that is fine. Just venting.

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Last edited by sil; 11-26-2007 at 07:24 PM.
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Old 11-26-2007, 08:29 PM   #2
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Why does it seem like contractors want to cheat customers out of their money?


Hi Sil, I've been there. From the other side though. Some customers are great to work for where others expect you to do add ons for nothing....that's another story.. back to your quotes. What I find is that quotes for work and the actual finished work isn't the same! I've lost bids to contractors who were lower on their prices, only the work wasn't high quality. Some do great work, where others cut every corner possible and do some half a** work. Painters who give low quotes(and sometimes the others do it too) often do no prep work, such as sanding, priming, caulking,etc.
I live in a small town and have had some customers decide to hire the lowest quote guy, only to call me in to fix his mistakes!
The best thing you can do to ensure you get good quality for the money is to actually call his/her references and ask if they are happy with the work. You should not go for the lowest price unless the prices are close and you have thoroughly checked them out! And pay no more than 1/2 of the money upfront. This way you will have some leverage if you need it.
And if these people want the work, they should give you free estimates!
The best way to find someone seems to be word of mouth these days...good luck with your search!
Hope this helps you in some way!

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Old 11-26-2007, 08:34 PM   #3
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Why does it seem like contractors want to cheat customers out of their money?


You get a wide variety of prices because the vast majority of contractors dont know how to charge enough for their work to cover their costs AND overhead AND also make a profit. The ones that gave you the higher prices are most likely estimating the job correctly. 90+% of contractors go out of business within 5 years for this exact reason. They just figure out how much they want to make per hour, with no regard for the underlying cost of running a business. Some take it to the other extreme and try to make a big profit. I dont think it is unethical, I just think it leads to losing some jobs. Maybe that isnt such a bad thing if they can make the same amount of money every year as another guy who does more work...sounds good to me.

Im assuming you were referring to me when you felt you were being suckered into paying the up front fee for measuring. Maybe not as I recall saying $100 or $150. That is a perfectly legitimate request from a contractor who has been told that the customer is getting other bids. This almost always means that if my bid isnt the lowest, I am wasting my time. Asking for the fee is a way to make it not a complete waste. Believe it or not, we dont have a crystal ball in the truck that spits out the magic number. There is actually a little bit of work involved in putting together an estimate. This work includes measuring, doing material takeoffs based on the measurements, pricing and locating materials, entering this information into a computer, and then typing up a professional looking proposal. This is all approximately 4-5 hours worth of work for me on a job like yours. This is all while knowing that you are getting multiple estimates and that there is no way mine will be the lowest, because I am competing against guys who literally dont know how to charge enough to stay in business. So hopefully now, $150 dollars doesnt seem like a complete rip-off.

Maybe I should start a thread asking "why do homeowners have so little respect for a contactors time?" I have to be honest after sitting here for the last couple of weeks and reading the questions you have asked about your contractor and seeing how many times you have changed direction, I am relieved we didnt connect on that job.
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Old 11-26-2007, 08:35 PM   #4
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Why does it seem like contractors want to cheat customers out of their money?


There has never ever been a free estimate in the history of contracting. Someone is paying for the estimators time.

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Old 11-26-2007, 08:42 PM   #5
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Why does it seem like contractors want to cheat customers out of their money?


This can be a long drawn out debate, there is NO industry standard on what contractors can or will charge for their services, each of us has different expenses and overheads. The lower bids versus higher bids have so many factors that you as the consumer don't see you cannot just say the higher guy is ripping you off. Painting a kitchen for $ 275.00 I promise you the guy has limited libility insurance and there is no way he has medical coverage for his crew. Not that the medical should effect your decision, but the better the benefits the employer offers his employees the better the employee he attracts which offers you the consumer a better end product and usually more trustworthy and reliable people working in your residence.

Other companies could have sales people who get paid a commission, offer a 401k, supply vehicles or other allowances to their employees, all this gets calculated into the cost of doing your job. Perhaps the lower price contractor had a job cancel or was in a slow period and was giving you a job at cost just to keep his guys busy and create cashflow.

When I bid jobs I always let people know I am going to be the most expensive bid they get, but what you don't always see or notice is that I cover all my bases and I won't come back and hit you up for an extra because I accounted for it in the beginning. This is a common practice among unscrupulous contractors. By the way, I get over 90% of what I bid on.

Do you realize that between 60-75% of what you pay a contractor goes towards labor, insurance, taxes, licenses, benefits, overhead and profit? And profit is usually a small percentage of those figures.

So, do I think contractors are trying to rip you off because you are a single female? I am sure some are, most are not though. I can get a steak at Sizzler for $ 8.99, go to Ruth Chris Steakhouse and pay $ 39.99, is Ruth Chris ripping me off? No, I get a table cloth, a well dressed waiter/waitress, ambiance, no kids running around and a better piece of meat. I could use ANY other business in this world and show you various prices for similar products and end results, but you have to look at the service that goes with it and the same holds true with contractors.
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Old 11-26-2007, 08:51 PM   #6
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Why does it seem like contractors want to cheat customers out of their money?


You are right to some degree. I had 4 people give me a bid on the replacement of studs and sheetrock for a 8 x8 wall. Three were licensed folks. The one that asked me if my name was Mrs..... and I said "yes", he gave me the lowest quote.

Co-workers and friends have all agreed that if a Male is present on the job site, the contractor would be declined to rip him off.
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Old 11-26-2007, 09:05 PM   #7
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Why does it seem like contractors want to cheat customers out of their money?


Send it all- Yes, I was referring to you. Everyone gave me a free estimate on cabinet refacing. You said you would charge a fee (perhaps it was $100 - $150 but I heard $250). Nevertheless, I am at the mercy of your pricing. What if it was a high fee? I would have either lost my so called deposit or sign with you.

When I told everyone (family , friends, co-workers) they were so relieved that I didn't get sucked in.

Honestly, if you ask anyone to do something for you and he/she ask for a deposit only to be reimbursed when you agree to the job (not knowing how much it would cost you ), would you do it?

The reasons I ask alot of questions from this and other board is so I don't have to go through another lawsuit with an unscrupulous contractor. It took alot of stress and time off from work and hire an attorney. Yes, we won but no amount of money can pay for the stress I went through.

I had a very good hardworking and honest man who did my hardwood floors, my roofing, and electrical work. They were not the lowest bids but they were people I trusted through referrals.

Two of my friends had their tiles and hardwood floors done by the same man that did mine. Three co-workers who wanted a kitchen remodel signed up with the same guy I did. Both the hardwood floor and the kitchen guy did excellent work. I had many compliments.

I am not bashing all contractors but those that are ripping customers off.
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Old 11-26-2007, 09:24 PM   #8
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Why does it seem like contractors want to cheat customers out of their money?


What are the rough details of the lawsuit? Licensed contractor? Faulty work? Contract specifications?

Please define contractors ripping customers off. I know there out there, but they are either unlicensed or if licensed are few and far between than honest ones and deserve to have their tickets pulled.
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Old 11-26-2007, 09:32 PM   #9
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Why does it seem like contractors want to cheat customers out of their money?


Chris,

I don't want to relive the details of the lawsuit but it was a licensed contractor. Not a referral but someone who advertised in the newspaper.

My definition of a contractor ripping a customer off is that the contractor would give a different price depending on who the customer is and not the work. For example, for the same painting job in the living room, a contractor would give a younger couple a fee that would differ from a single woman or an elderly gentleman. Another example would be a contractor giving a higher price for someone living in a desirable and expensive neighbourhood versus low income housing for the EXACT specified job.

As a customer, integrity and customer service are the most important elements. I, and many others I know, have paid the highest or higher price but the quality of work was excellent. The customer didn't have to nag to make sure the contractor doesn't take any short cut.

Last edited by sil; 11-26-2007 at 10:00 PM.
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Old 11-26-2007, 09:46 PM   #10
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Why does it seem like contractors want to cheat customers out of their money?


There are a lot of crooks out there, but that's true for pretty much any industry.

I don't give designs away, if you want a detailed elevation and floorplan, you're going to have to pay. I also don't give detailed estimates away anymore. If you need a detailed estimate for insurance purposes, you'll have to pay for the time involved, $100 an hour. I do give rough estimates away. But if I'm going to sit down and do a detailed bid which is going to involve design, pricing, shop rate factoring and so on that takes several hours, then I'm going to be paid for it.

I get calls every week from somebody wanting an insurance estimate. When I tell them it's not free, they generally balk and some get downright rude.
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Old 11-26-2007, 09:55 PM   #11
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Why does it seem like contractors want to cheat customers out of their money?


P.K.

There are crooks in many industries. Word of mouth is the best kind of referrals.

With your profession, I wouldn't give free detailed estimates either. Sometimes, people like myself, don't even have a clue what the price would be. I always ask for a ballpark. I truly don't know whether it would be in the hundreds, thousands or more for a job. If I knew alot, I would do the work myself instead of hiring someone.
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Old 11-26-2007, 10:07 PM   #12
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Why does it seem like contractors want to cheat customers out of their money?


Word-of-mouth is the best way to find someone to do some work. If someone you trust refers someone, then the relationship on both sides is going to be better.
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Old 11-26-2007, 10:15 PM   #13
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Why does it seem like contractors want to cheat customers out of their money?


Quote:
Originally Posted by sil View Post
P.K.

There are crooks in many industries. Word of mouth is the best kind of referrals.

With your profession, I wouldn't give free detailed estimates either. Sometimes, people like myself, don't even have a clue what the price would be. I always ask for a ballpark. I truly don't know whether it would be in the hundreds, thousands or more for a job. If I knew alot, I would do the work myself instead of hiring someone.

Hi,

I can't speak for everyone else, but I have the same problem as you do... but like another poster has already stated, my problem is from the other side. Most of the time when I go out for an estimate, my customer has done no homework as to what he/she wants and has no idea of a ballpark price for the work they want done.

I'll use flooring for an example....

I gave a customer a quote for a flooring job @ $2325. They were flabergasted and practically accused me of trying to rip them off until I explained to them in detail where the money was going. This is something I normally don't take the time to do, but have started doing more since the market has slowed down, especially during the holiday season. Sometimes, we as contractors forget that the average homeowner has no clue how much the materials cost, let alone how much it takes to run a business.

As you said, if you knew how to do it... you wouldn't have called us.

I have recently started charging for my estimates. My way of seeing it is that if the customer isn't willing to spend a small fee for me to come to their home, they aren't willing to foot the bill for my quality of work. I get a lot of customers that want estimates that are shopping by price. Usually, by the time I leave their homes, they have seen the error of their ways and are shopping based on quality of work. That is why my company's slogan is "We don't sell price. We sell quality." You just can't put a cheap dollar figure on a job done right, and done right the first time. Sometimes I beat other contractor's proposals, sometimes I don't. I don't even think about what they are gonna charge. I give the customer what I am willing to do the work for, and they can take it or leave it. It's not debateable, it's not open for negotiation. It's the bottom line dollar figure that I can do the job for, pay my crew with, and still make enough money to pay my bills.
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Old 11-26-2007, 10:16 PM   #14
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Why does it seem like contractors want to cheat customers out of their money?


Sil;

All of my work is referral, no advertising, my rates vary slightly, not dramatically, the repeat clients get a little better deal then the new unknown client, people in a tight situation I try to work with. You never know who is going to refer you (hopeful all clients send you to 3 more), prices need to remain stable but flexible when needed, it probably doesn't make much sense, but it's an art that some of us contractors have developed over the years.

You hired a guy out of the newspaper and it turned out bad, I can say that he was part of a small percentage of licensed contractors that prey on people calling them, doing damage and hope that nothing comes from it. I hope you also reported him to the CSLB and had some penelty towards him (license revoked?)

As for Send It All, I have dealt with him on various occassions on a different forum for the past 6 months or so, both he and I seem to have similar attitudes and responses to the contracting business. In no way was he trying to rip you off by charging for an estimate, he knew you were price shopping and instead of spending time and money to work on a proposal he figured he was not going to get he wanted some form of compensation for his time, nothing wrong or illegal about it, and if you hired him he would have credited you on the contract. Was he going to more or less? We'll never know now.

My line of work is specialized and my competitors and I speak regularly and if we get people price shopping I don't bother looking at the plans, I just give a high sq.ft. number because it is not worth it for me to compete against 6 or 8 other contractors when I am busy enough on my current jobs. We're not trying to rip people off, we just don't like being abused by customers either and I hate to say it there is a lot out there.
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Old 11-26-2007, 10:34 PM   #15
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Why does it seem like contractors want to cheat customers out of their money?


Chris

I agree that the contractor and customer relationship is very important. No one wants to be ripped off. If I can get a referral from a friend or family, I wouldn't even ask for an estimate. I would just hire him/her. However, if I don't know anyone or can 't get a good referral for a job, I would go price shopping.

I work for a large corporation. We are always looking for good contractors to do repairs, kitchen remodels and room additions. I referred my cabinet guy to 3 co-workers. They are going to be getting their kitchen remodel early next year with him. He is a very honest man with great workmanship. His price is very reasonable. Even if he was expensive, I would have still referred him to my co-workers.

Just like in real estate, a fair price that both sides are happy with is much better than a win-lose relationship

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