Negotiating construction costs?

[NBN]

What are your thoughts on haggling/negotiating for construction work?

I fully understand that contractors need to pay costs and have a little at the end of the day. I am not expecting someone to do a job for free or at cost but sometimes it seems prices could be "padded".

I worked for a guy one time that said "charge them until they squeal, then back it off just a bit so that the customer thinks he's getting value". Im sure there are contractors out there with that same mantra.

But back to me question, do you think that most contractors fluff their quotes for a little wiggle room for negotiations? Is it right to think that I could haggle a lower cost for a construction project? In this case, I am looking at having a 30x40 shop built.

 

[My Old Tools]

Life is negotiable....

 

[ssdave]

So, you don't have a bid yet, but are already assuming it will be higher than needs to be.

I'd get a bid, or several, compare them, and see if they fit your budget and expectations. If not, I'd discuss with one or more of the contractors that you prefer, where, and why it doesn't meet your expectations. They may offer suggestions on where costs could be cut.

If you want to haggle a little bit, because that's your thing, tell them up front that you're a negotiator, so that the ones that are also into that can put in a little extra to give up and make you feel good about your bargaining skills.

Personally, I've gotten to the point where I detest all the games and negotiating for the sake of negotiating. I tell bidders up front that I'm a cash buyer and ready to award. If I get an absurd bid because of that (some contractors assume that means you're stupid), I just hand the bid back and tell them that we must have had a misunderstanding on the scope of the project.

I usually have the bidder break down the project into tasks or phases. If any of the tasks seem unusually high, I discuss with the bidder why. Often, he has a good reason, and sometimes my needs can eliminate a high cost item that the bid breakdown shows. Working with the contractor to get a product you can live with at a price he can make money on is a win for both of you. To me, that's the best use of negotiation, not just trying to get some "discount" off of the price.

 

[kmacht]

You can negotiate it but make sure you have leverage and everything is clearly detailed out in a contract. The initial negotiation is going to require you get a few quotes. Unless you know what the actual going rate is for the work to be done you don’t know how much you have to negotiate with. The second part of having a detailed and enforceable contract is even more important. If you cut a contractors profit margin they are going to look for places to make it back. That may be lower quality materials or by cutting corners. Negotiating is a two way street. Neither party should be happy but neither should feel like they are getting screwed over.

 

[Goose_NC]

For large projects I get bids from 4-6 companies. And let them know I'm getting other bids.

I had folks tell me that they would match lower bids. I said I will not call you to 'match'. Some will adjust 10% on the spot if they want/need the work. In Wake county NC right now, good luck finding any available house skilled labor folks.

Sent from my moto z3 using The Garage Journal mobile app

 

[Showkey]

In this building market place......

You will be lucky to find 4-6 builders that will show to bid.......call 10 you might get 2 or 3 to show.
If they do bid they will subject to material market increases.......
You will be lucky to find a good builder that is not 6-18 months lead time.....

 

[Bigblockyeti]

Given the current work backlog most quality contractors are sitting on right now, I expect they'll have inflated labor costs on top of the highest lumber prices ever. If they're good at communicating, they'll politely ask you to check back with them in 1-2 years when things slow down, if they're not, they'll ghost you or outright tell you to eff off.

I was working with a contractor negotiating our build but he eased into letting us know he was incompetent up to eventually outright starting the job without a contract that culminated in us nearly filing a restraining order on him. Further investigation kept up from filing suit as you can't get blood from a turnip and he was made of more liability than asset.

His verbal guestimates for a mini-split for part of the house (that I could buy for $2500) went from $4K to $7.5K. The gravel driveway went from $4K to $9K. Initial excavation and grading went from $8.5K to 20K. All of this was in fall of '18 when labor and materials were not nearly as volatile as they are today, it appears he was shopping for a sucker to make up for his past mistakes. We got lucky and fired him before too much damage was done other than a few hundred murdered trees.

When negotiating, make sure you've got the right person to start with!

 

[NBN]

So, you don't have a bid yet, but are already assuming it will be higher than needs to be.

I'd get a bid, or several, compare them, and see if they fit your budget and expectations. If not, I'd discuss with one or more of the contractors that you prefer, where, and why it doesn't meet your expectations. They may offer suggestions on where costs could be cut.

If you want to haggle a little bit, because that's your thing, tell them up front that you're a negotiator, so that the ones that are also into that can put in a little extra to give up and make you feel good about your bargaining skills.

Personally, I've gotten to the point where I detest all the games and negotiating for the sake of negotiating. I tell bidders up front that I'm a cash buyer and ready to award. If I get an absurd bid because of that (some contractors assume that means you're stupid), I just hand the bid back and tell them that we must have had a misunderstanding on the scope of the project.

I usually have the bidder break down the project into tasks or phases. If any of the tasks seem unusually high, I discuss with the bidder why. Often, he has a good reason, and sometimes my needs can eliminate a high cost item that the bid breakdown shows. Working with the contractor to get a product you can live with at a price he can make money on is a win for both of you. To me, that's the best use of negotiation, not just trying to get some "discount" off of the price.

I've actually got a few quotes and each are completely different.

Reading your comment above, isn't that essentially negotiating? Not being argumentative, just seems you don't/won't necessarily pay a price a contractor quoted.

Regardless, thank you for your comment.

 

[Balvar24]

All quotes for work should be found at the end of a detailed scope of work.

 

[NBN]

For large projects I get bids from 4-6 companies. And let them know I'm getting other bids.

I had folks tell me that they would match lower bids. I said I will not call you to 'match'. Some will adjust 10% on the spot if they want/need the work. In Wake county NC right now, good luck finding any available house skilled labor folks.

Sent from my moto z3 using The Garage Journal mobile app

I like this. It doesn't put you into "negotiations" but persuades the contractor to give his best price.

 

[pcmeiners]

Have an Architect draw up plans and ALL specs, submit to multiple contractors. If you do not have a tight specs/contract you will never have anything to bargain with. If you do not want to pay for a decent contract now, pay for it later, after signing.

 

[tretter7]

This has been my experience exactly. I've called probably 8 builders, 2 have called me back, and so far only one is actively working with me on a 34x42 shop w/ upstairs apartment -- a small job for them, but not exactly tiny. I'm considering waiting a year and hoping the market softens up and folks get hungrier.

 

[dcg9381]

But back to me question, do you think that most contractors fluff their quotes for a little wiggle room for negotiations? Is it right to think that I could haggle a lower cost for a construction project? In this case, I am looking at having a 30x40 shop built.

I think a lot of it depends on how much "risk" is in the quote. Or if the contract covers the risk. I've got a contract with a GC where some items are "allowance" based and some items are simply for implementation.

Just think about the massive variation that we've seen in lumber prices in the last 12 months. I know this particular GC did have to eat a few things - including going way over on concrete foundation costs (largely due to having to drill some 10' piers).

I think the less risk - more simple a job is - the tighter they can bid it. When they depend on subs, commodity prices, or perhaps unknown things - like "what's under that dirt" - they need to get more creative or pad things more.

Other things - I've seen wild bids on things where contractors are simply busy and they're throwing high bids out to see if someone bites because they're on a timeline.

Full plans and specs DEFINITELY helps, it's also easier to hold their feet to the fire when they forget things or do things wrong... But your best defense is making sure that you owe them money at the end of the day and don't pay that final draw until they are 110% completely done.

What I'm running into is that most trades are really busy. They'll come out for a "big job" - but getting the plumber back for the 3 hose bibs that he's forgotten in the next few weeks is a real problem because he's on a commercial job. And the framer does great, as long as he's on site - but I know he's off "high bidding" other jobs and when he gets one, he'll go work on that for a few weeks.

 

[Whitworth]

I say NO.

Reason: A good contractor (i.e., experienced, mostly honest, very busy, does quality work) either will not haggle or will take umbrage at haggling. They get plenty of word-of-mouth recommendations and have or are trying to build a good reputation.

A bad contractor (inexperienced, or shyster, or quick-n-dirty workmanship) will be more inclined to haggle, just to get the cash flow. They may not have much word-of-mouth advertising and figure if this guys going to haggle for $X off the quote they can easily cut $X and more from job costs.

 

[twistedstang]

Is your wage negotiable?

 

[My Old Tools]

Is your wage negotiable?

Sure is. Didn't you ever ask for more money?

 

[klassenl]

I feel very fortunate that I have been in the construction industry for a long time. I know who to call because I have worked shoulder to shoulder with them

 

[Mthomas1686]

I just recently had my post frame garage put up. I got probably 5 quotes for red iron, and 5 or 6 for post frame buildings. It took me over a year to actually decide. Unless the numbers are way out of whack, I personally wouldn't negotiate. I feel like it tarnishes the project relationship.

 

[justtools]

I feel very fortunate that I have been in the construction industry for a long time. I know who to call because I have worked shoulder to shoulder with them

I like that answer. You know who is good and competitively priced so no negotiation needed. I found a small company near me that was highly recommended. In the last 2 years they replaced my roof, My siding and I am getting a new deck this fall. I have also recommended them to friends who had major work done. Over 200k in 1 job. Your life is so much better when you know who to call.

 

[Northislander]

I feel very fortunate that I have been in the construction industry for a long time. I know who to call because I have worked shoulder to shoulder with them

As a plumbing contractor who has built over a dozen fairly major homes, shops, and cabins it takes a thread like this to remind me how fortunate we in the trades are when we are building our own projects. In all my projects i have never asked for a price from any of the trades i have just asked them to come and do it and charge me accordingly. But i have the advantage of knowing who i can trust to do a respectable job and not **** me in the process.

 

[Cc_windsurfer]

Everything is negotiable. What are you willing to give up in exchange?

 

[imjustdave]

A lot depends on how you want to work this.

One direction is hire a company and they do all the work and give you a bill zero real decisions, and you get what they decide you should get for a shop. Basically cook cutter type setup. Town and country does this all the time with pole barns.

Second direction is you have plans drawn up and then you run the job and or you hire a GC to run the job, they get multiple bids for each aspect of the job Excavation, concrete, utilities, framing, roof ETC and or they have a small crew to do some aspects and you get your shop built the way you want it built. you pay the GC some coin usually based on the value of the entire job, but they work there regular suppliers to get you a decent price outcome for each job. This is what I am doing.

In terms of pricing. Do some contractors overcharge and take advantage of people For Sure, daily
Friend got a quote for gutters... 35k.... We both laughed at that one...
about 10 years ago I got quote for 18 window to be replaced... Just shy of 40k I purchased replacement windows for $4,500 did my own labor.

almost 2 years ago I got 3 roof quotes, 24K, 19K and 8K. I went with the 8K quote and did T&M on the job, roofing cost about 3500 rest was labor, bid took 20 min because it took that long to measure the roof.
The 24K was same material and epic high pressure sales and the dude wanted to stay hours at my home, when the wife showed up 60 min in his pitch was flabbergasted as the decision makers weren't both there, started his sale pitch again with her, until I told him I didn't think she cared, as long as it was Black, lasted 30 years and kept the home dry, she confirmed then we moved to the numbers and financing options I just about laughed in his face it was so unreasonable, eventually he came down but it was today only type stupidity.

To me there are 2 types of bids...
1 is a bid based on info you provide, and with a detailed info on the bid.

2nd is a High pressure sales pitch that usually involves financing options and a low monthly payment plan, mysterious calls to the "boss" and surprise discounts if you have to "think about it"

Notice I didn't say either was high or low but #1 is usually better in terms of pricing.

Bigest thing I can say is shop around, don't be afraid of saying WOW too much NEXT.

 

[Showkey]

^^^^^^^^^^^
I would say 18 windows for $4500 is either a stretch or you buy some low budget windows at an average price of $250.

Quality window........clad outside, double or triple pane, low E with film, coated, stained wood inside...... will run $750 each. Yes, there are “builder special windows” at $250.

Same for the roof how small is the roof ?......quality shingles, underlayment, ice and water shield is at least $125 per sq..........so $3500 is 28 sq.

So yes ......roof you can save on labor because it’s $125 per sq to install.

 

[Glemon]

Not a contractor, but somebody who has tried to use one of several occasions over the last few years. It is very frustrating at times, as mentioned you call 10 and three respond, of the three, one never gets over to do a estimate, of the two that do one gets you a quote right away and the other you have to keep pestering.

I have been in business for myself, don't understand not responding, even if you don't want or don't have time for the work. It takes 10 seconds to email or text, sorry, we are too busy at this time, maybe later this year, or sorry, not the kind of work we do, or we can't do that right now, but I have worked with this other guy in the past and he might be able to help you. I have never been so busy that I didn't care about possible future business, but...

I also get that I am a small fish with with a small job, took me a while to figure that out, but I get it.

So all that being known, even though all things are negotiable, I wouldn't be inclined to negotiate simply for a better price, when I get a bid that is way too high I just say adios. I think it does make sense to break down the job with them and see if there are things quoted you don't need or want, or could be done a different way and go from there. If the contractor isn't willing to listen or just says this is how we always do it, I would walk away.

Example, not on price but just on working with, when I did my garage addition the brick contractor said he wouldn't tooth it in where it met up with existing brick on the back side, he would caulk it (he said if the addition settled at all the wall would crack) I didn't like that idea, so we sat down one afternoon and looked at the project and decided if we put trim on top of the human door by the joint we would break up the two walls, and could tooth it for a much better look with much less risk of a crack.

 

[jack stand]

It's my perception that (nationwide), any competent, experienced and successful contractor is not only there giving you a quote, but is also giving YOU an "audition". He'll walk in a minute if he senses anything about you that gives him reason to draw from his past experiences with a trouble customer. He's got a long list of perspective jobs and he's in the driver's seat.
I would tell him that you're getting multiple quotes and would be foolish not to. Let him quote you and just get back to him. That's business. Then you compare them, there will inevitably be minor differences and then there's the opportunity to discuss things.
Spoken as a 35 year contractor.

 

[matt_i]

It seems like a choice fraught with peril.

You might be happy up-front but be unhappy in the end.

Devil's Advocate position and not me trying to be mean: Supposing someone was trying to beat me down on my bid or price, I would look very carefully at the scope of work...when things changed after the agreement was inked or items that weren't included, my price for those "change orders" would be steep. Its very likely that I could make more money than originally agreed to. Another opportunity to make money back is to silently cut corners and there are a 380,000 of those methods out there...

I wouldn't want either one of those scenarios.

 

[NUTTSGT]

Right now, the way things are. I can see negotiating in only a few cases.

One, putting the building as side job, evenings/weekends.

Two, as filler work between larger jobs. You might have to wait longer than you want for completion.

Three, as a complete cash job and you're writing the check for all materials, nothing run through the contractors account.

 

[Bent Handle]

I had a guy recently ask for the friends and family discount. I told him everyone gets the friends and family discount. He laughed.

Told another guy his add on was $500. He said how about $450, come on make me feel good about it. I said, ok, how about $550, but I’ll do it for $500. He also laughed and said go ahead.

 

[jimindm]

I sometimes do not get the answers to some of these kinds of threads.

Get so many estimates, go with the low guy, go with the high guy, can not even get any one out, and the list goes on.

So many times people say they want the guy that does it all to do the job. Well you know what he is making no money giving out free estimates driving around all day. He only makes money by doing the work.

The company that can afford to have a guy come out at a whim and give an estimate, is likely the highest, because someone is paying him to not pound a single nail on a job site.

One part of negotiation that many do not figure on, is the very first rule of it. One has to know when to walk away. When the only guy that shows up to bid the job, I am not sure you want that guy to walk away, by negotiating.

I guess the biggest part that perplexes me about these threads, do posters not have friends or family, that have never paid to have anything done, and were happy. If you would not take a referral from one of them, what could you expect.

I guess I am not like most guys on here. If I need something done that I do not want to do, I likely know a guy. If I don't know a guy I a have plenty of friends that know a guy.

 

[K13]

Well you know what he is making no money giving out free estimates driving around all day. He only makes money by doing the work.

The company that can afford to have a guy come out at a whim and give an estimate, is likely the highest, because someone is paying him to not pound a single nail on a job site.

It's part of his overhead and if he runs his business properly it is factored into what he charges. Just like he doesn't bill you for the time it takes him or someone else to do his books every month but it still needs to be done to run a business.

 

[NBN]

I appreciate everyones input and comments on my post, to be clear, I AM NOT LOOKING TO HAGGLE FOR A JOB.

My initial question, and it may have not come out in text was simply, what is the likelihood that contractors pad their quotes to make a few extra bucks.

 

[NBN]

I sometimes do not get the answers to some of these kinds of threads.

Get so many estimates, go with the low guy, go with the high guy, can not even get any one out, and the list goes on.

So many times people say they want the guy that does it all to do the job. Well you know what he is making no money giving out free estimates driving around all day. He only makes money by doing the work.

The company that can afford to have a guy come out at a whim and give an estimate, is likely the highest, because someone is paying him to not pound a single nail on a job site.

One part of negotiation that many do not figure on, is the very first rule of it. One has to know when to walk away. When the only guy that shows up to bid the job, I am not sure you want that guy to walk away, by negotiating.

I guess the biggest part that perplexes me about these threads, do posters not have friends or family, that have never paid to have anything done, and were happy. If you would not take a referral from one of them, what could you expect.

I guess I am not like most guys on here. If I need something done that I do not want to do, I likely know a guy. If I don't know a guy I a have plenty of friends that know a guy.

I'm not Mr. Social Butterfly so my circle of friends is very small, just the way I like it. With that said, none of them have had a shop built so there is no friend referrals available.

 

[jimindm]

I'm not Mr. Social Butterfly so my circle of friends is very small, just the way I like it. With that said, none of them have had a shop built so there is no friend referrals available.

I guess maybe you should talk a little more about what shop means to you. What are you trying to get estimates for, that no one in your friend circles have never done.

A garage like structure, a pole barn, a garagminium.

There is so many aspects of building anything, it is just odd that you could not get a referral. These trade guys all talk to each other. Usually they only want to work with guys that they trust. Bad workmanship from any of them on a job, usually reflects on anyone that worked on it.

 

[ssdave]

I appreciate everyones input and comments on my post, to be clear, I AM NOT LOOKING TO HAGGLE FOR A JOB.

My initial question, and it may have not come out in text was simply, what is the likelihood that contractors pad their quotes to make a few extra bucks.

It depends on what you mean by a few extra bucks.

All of them probably put in something above the absolute minimum that it takes to pay for supplies, pay their help, and pay their own rent. That isn't extra, it's just part of the compensation, and it's needed to keep them in business long term.

Very few put in something extra just to negotiate out. In a multiple contractor quoting situation, that would be just stupid, to lose a job because you put in $500 or $5000 that you expected to discount later.

In this current contracting climate, I'd expect many are adding 10 to 25% or even 50% to what they would do the job for in a slow economy. That isn't extra to take out in negotiations, it is just a fact that they're in demand more now, and can charge accordingly. The current economy is not a good one to be negotiating with a contractor in to try to get him to cut his income. He'll just pass you by for a better client. He may come back to you in 6 months or a year if the building boom crashes, and see if you're still interested. But, he won't work for you now for a cut rate.

 

[toolmiser]

We had a former back yard neighbor do a couple projects for us including a second story addition. He gave us a bid up front and we thought it was fine and we had him do the work. No problems. We recommended him to a couple other people at work but with a caution that he isn't the cheapest, but he does good quality work, and has a good eye. Both chose other contractors because of cost. Both ended up firing their contractors because they weren't satisfied with them and both wished my neighbor would have done the job.
I guess my point is you have to know what you want, and what to expect, and you probably won't get it for nothing.

 

[Professor Fate]

As a Contractor here is my take. It takes a lot of time to give an accurate bid (WAGs are easy, but high) and I am only going to bid a job that I have a very good chance of signing a contract. I will provide a price and a detailed list of specifications to my clients so there is no areas of misunderstanding. My price is also my price. If you ask for a discount I will ask what are you willing to delete from the contract. What I won't do is bid high and drop a bit to make the client feel better as I believe the client will think the price is padded and not trust me. I am going to tell you up front that I will not be the cheapest price you get and if that is what you are looking for I will politely wish you luck on your project. I can tell you that all the Contractors that I know including myself interview the customer to a higher degree than they interview us. You just don't realize we are doing it. I have turned down many projects from potentially problem clients, usually by saying i am too busy to get to it for several months.

 

[Todd.Brock]

I decided to start my own business in April. I’m recognized as a contractor with the state and city, have commercial liability insurance and possibly the best/worst time to start an LLC.

I’m more in the “Handyman” dept, doing anything from replacing receptacles to hose bibs, rebuilding rotten screened in porches, to cutting grass and a boat load of fences.

I had a lady ask for recommendation for painters and this and that . Wanted to use me for lawn care, But found someone $5 cheaper.
I also quoted a Vinyl privacy fence at $9300 and it was just all about price for her. She was convinced it should cost 5k. The materials alone were more than that!

Some people are just about the lowest possible, others see I’m not the cheapest , but treat each project like my own and almost over communicate. The ability to show up when I say I will and use complete sentances seems to be working. I’ve fired a couple customers, some have thought I was too high. When a customer starts talking about her last three guys never understood her needs, ... I should have run.

I have a new appreciation for the time contractors spend giving quotes and on the phone with suppliers. I’d probably fired myself as a customer, lol


Sent from my iPhone using Tapatalk

 

[bczygan]

To the original question........The word "Pad" is inflammatory.

Different people will price their work differently for a multitude of reasons.

Different people will accept or reject any particular price based on a multitude of reasons.

You can always TRY to negotiate.

I've been a purchasing agent for construction projects and my method, and a useful one, was to try to get to a true "meeting of the minds" with any contractor that we hired. That means defining the work completely, qualifying the contractor for that work and selling us as the GC, to the contractor, so he would work for us.

In doing this, we both knew the expectations for the project in all it's detail.

The goal was "No unhappy surprises" for anyone!

Bill

 

[BB Sig]

I'm having a pool installation done. One contractor said he didn't want to come out, one gave me a quote over the phone, one wanted to come out and charged me $75 to come out and quote. I paid the $75 and will be using him. He's not cheap but he talked to me for an hour and asked me to take trees down ahead of time. Best $75 spent on the project!

Barry
North Florida

 

[NBN]

As a Contractor here is my take. It takes a lot of time to give an accurate bid (WAGs are easy, but high) and I am only going to bid a job that I have a very good chance of signing a contract. I will provide a price and a detailed list of specifications to my clients so there is no areas of misunderstanding. My price is also my price. If you ask for a discount I will ask what are you willing to delete from the contract. What I won't do is bid high and drop a bit to make the client feel better as I believe the client will think the price is padded and not trust me. I am going to tell you up front that I will not be the cheapest price you get and if that is what you are looking for I will politely wish you luck on your project. I can tell you that all the Contractors that I know including myself interview the customer to a higher degree than they interview us. You just don't realize we are doing it. I have turned down many projects from potentially problem clients, usually by saying i am too busy to get to it for several months.

This is the kind of information I was looking for. Thank you