Initial Home Remodeling Contract Made Easy

Signature home remodeling contract

what's going on guys it's your boy mike from seattle former general contractor all-around good guy local small-time real estate investor and of course the duly elected sheriff of the internet i got a question asked in a facebook group that i'm a part of that's for landlords and the question was what are the red flags that you try to avoid if you see when dealing with a contract or what makes you say i don't want to do business with this guy and as somebody who used to be in construction for six years prior to becoming a police officer i said to myself you know what maybe i'll make a video about this because i actually know a thing or two about it so here are my five biggest red flags that if you see while working with someone you should absolutely avoid to keep yourself from getting into trouble getting ripped off or freaking losing your butt on a deal okay they're not in really any particular order i'm just going to jump right into it so number one if when you've had the salesperson or the person who does the bids or the contracting company come out to your house if at the end when they're asking if you're interested in purchasing and signing the deal if you say you know what i want to get a couple of other options if they begin to get really really defensive over you trying to shop around and look for a better deal that is a giant red flag and i'd be very concerned any good contractor any good construction company any good home remodeling company that's worth their salt knows that a smart buyer especially in today's market is going to shop around you're going to be looking for multiple bids and multiple offers if you don't that's your own fault for being dumb right unless you're taking someone who comes highly recommended by a friend or a neighbor and you know for sure already you want to go with them regardless of the price you should be shopping around and somebody who gets defensive that's a red flag and to piggyback on top of that if you go get a quote from someone else and it comes back 20 30 less than what they quoted you and you call them up and you say hey man we got a different bid from somebody else so they call you doing some follow up you're like you know honestly we got a different quote from somebody else they're 20 cheaper than you if they are willing to all of a sudden drop 15 20 30 off the actual purchase price of the package that we're putting together for you that's a giant red flag you're not supposed to have that much wiggle room built in if you do my question immediately is why what what this is all profit that certainly is a lot i want to know what your best deal is up front now that's not to say that good construction companies can't say well hey we can be a little more competitive or what's the other bid that you got let me take a look at it as somebody who went and had to do multiple bids for multiple people all the time with what i used to do if somebody said to me hey this person is three thousand dollars less than you want a ten thousand dollar project i'd say well what are the materials they're using right you can't compare apples to oranges in the construction industry if i'm providing permanently sealed quartz product with a beautiful recycled glass finish to it that is gonna wow the people that you're entertaining versus somebody who's giving you a two centimeter imported chinese granite that's going to fall apart and i wouldn't even put outside to get rained on on the patio you can't compare the two things and say well this company's giving me 30 less yeah it's because they're giving you garbage or that's what you're going with right if you want me to quote you at the cheaper product you know i'm sure i can figure out how to bring my price down as well so you need to keep that in mind just because someone can lower their price to make the bids be more comparable does not necessarily mean that they're being dishonest but if all of a sudden they can take their top quality top shelf product and knock 30 off the asking price of it that that's something you need to be leery about so sticking with money and finances how are they asking you to pay they don't accept credit cards they don't accept paypal you can't do any type of they only want cash hey man look all right we'll accept the credit card but it's going to be three thousand dollars plus taxes or you can pay me 2 200 bucks up front all cash that's a giant red flag obviously exceptions would be hey my brother's doing a deck for me or you know my mechanic who works on my cars man i give them a six pack of beer and i pay for whatever the parts cost and he fixes my car over a couple of weeks and that's just that's the brother-in-law discount right that's the buddy buddy that's not what i'm talking about here what i'm talking about is the construction company that you don't know anything about but they are very interested in all cash payments they don't want to give you a receipt if they do it's like hastily written on the back of a denny's napkin yeah that that's that's that it should be a red flag the fact that i have to say it just baffles me but i've dealt with people before who were very frustrated with sales people because they can be dishonest i'm like well tell me about your last experience and then they tell me the story that i just recounted to you know i mean avoid that type of stuff now again let me give you the caveat all right just because they offer a discount for all cash does not necessarily mean they're dishonest the company that i used to work for we would offer a two percent cash discount the reason being is if you pay with visa or you pay with mastercard there's a four percent processing fee just for us to run that transaction so if i'm going ahead and doing a ten thousand dollar project i'm spending 400 bucks like right at the get-go just to pay for that transaction now as our business owners decided what they would do is they would offer a two percent discount for whatever you paid if you paid in cash and we would split the difference so we would save two percent as the contractor and the customer would save two percent on the total cost so just because someone gives you a cash price versus a non-cash price does not mean they're doing anything shady or dishonest but you do want to make sure that it is a legitimate business and you want to see receipts and things like that so just just be be aware of what's going on okay so in the last probably five years this has become more and more important back when i was in construction starting out 0.70809 an online presence wasn't an absolute must it wasn't a surprise if a company didn't have their own facebook page or didn't have their own uh google landing page it didn't have their own business website right this that was the norm back then i worked from the 2009 to 2015 in construction nowadays however if there's no online presence for a business that you're interacting with that is extremely concerning everybody should have instagram facebook honestly they should all have youtube everybody should have google you should be able to google their name find their address get the directions to it and start looking through those google reviews if you can't things should be popping off in your mind because it's impossible to keep reviews for your company off of the internet now it's like people will pay thousands of dollars to try to have stuff scrubbed from them because it's so difficult to get negative reviews off so if you can't find an online presence for a business i would be very concerned as to why or they're changing their business name unless the answer is they just opened up and you're one of the first customers and it's the grand opening right which you should be able to figure that out why you can't find them online you should be very concerned if you can't find reviews next ask them for reviews hey can i talk to your last three jobs can i talk to three customers that have done business with you in the last two months if they can't provide reviews like that to you that you can call real people who you can chat with about the project that was done do you really want to do business with them every single person that i installed countertops for back in the day i would ask them hey can i do a video review on my ipad will you say what you think about our product and then when i would go out to my next sales call i bet hey here look at the last 10 people i did business with there you look at that while i walk around and take my measurements and that would sell them right there okay so this one's really really important if the business that you're trying to do business with wants all of the money up front that should be a giant red flag it's pretty typical in the construction industry to collect money in phases for us we would do 10 at the sales caller at the bid or at the estimate to lock in the deal that we had offered them hey we want to remodel your kitchen it's going to be fifteen thousand dollars we'll have you go ahead and give us fifteen hundred dollars to get this started and get the process rolling then when we would come back out to do the measurements to do the templating to check what the cabinets were gonna cost and take all of those measurements and order the materials we would require an additional forty percent so that we were 50 covered we had ability to pay for things if they backed out at the last second hey we we've paid for the materials already we've already paid for some of the labor we're not losing money but we're still giving the customer the consumer the buyer 50 of the leverage to not pay us until we've completed the job to their specifications to what they want which is how you do honest business with somebody if a contractor or construction company is saying hey we want all the money up front or we want you to pay 100 at the halfway point absolutely do not your leverage is that you have the remainder of their money still in your pocket that's their profit that 50 to 70 percent is what they paid in just labor and materials but the actual business owner isn't getting paid until he collects 100 of it so don't give it up until you have receipts and warranties and completed work in hand that you've inspected and that follows the contract that you signed for what everything needs to look like at the finish now it's pretty common most construction companies do it in thirds a third down a third at the halfway point and a third for closing but really what you want is just make sure that you have at least 20 percent of the final cost left in your pocket until it's done that way if you need to you have a strong area and position to negotiate from anybody who doesn't do this or anybody who acts like this is a weird or foreign concept to them is being dishonest run the other way that's a red flag okay the fifth thing that i can give you is legitimate business versus non-legitimate business so let me break it down for you me uh better business bureau a plus rated company that's been doing business for 10 years and has an actual hard location with a showroom that you can walk into and talk to a real receptionist who answers the phone versus chuck on a truck and when you call chuck on a truck he texts you back says i'm busy right now and he never responds and you can't get a hold of him and maybe once in a while you can get a hold of like his kid or his wife or something like that he's running a business out of the back of his toyota it's a 1988 toyota and you know it's breaking down in your driveway when you have them over to give you an estimate he also stops by home depot because he's got to pick up a few extra members for his crew to get whatever job he's doing done when they show up you know they're not insured you know that they are probably just scouting your place out so they can come back and steal from you later yeah chuck on a truck is not paying for business licenses he's not paying insurance in l i for his workers he's not paying unemployment nothing that he's doing is legitimate but chalk on a truck has a really really great price because he's got no overhead me working for a legitimate business well you know what if you want to be covered and have your bases covered and do business with somebody and not get ripped off and not have to worry at night that maybe something might get broken or someone might fall off your roof while they're doing it yeah you want to do business with me you get what you pay for i am actually legitimately running my business in a legal ethical manner and paying everybody and paying all the fees and the licensing fees chalk on a truck he's kind of just flying by the seat of his pants hey you might get lucky man you might get lucky and if you do good for you but if you don't hey you've been warned anyways those were the five different things that i could think of that'll really keep you from getting into too much trouble hopefully this video was 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