REMODELING COSTS, RENOVATION COSTS
CONTRACTOR COST DIFFERENCES IN SOUTH FLORIDA,
Here is an example of what real contractors must go through on just about every client they may complete a project for!
CUSTOMER: "How much will it cost to do this job?"
CONTRACTOR: "$2,800 Dollars."
CUSTOMER: "That's WAY too expensive for this job!!"
CONTRACTOR: "How much do YOU think it would cost?"
CUSTOMER: "No more than $800 Dollars - MAX!! It's a simple job!"
CONTRACTOR: "I can't prioritize my time for so little."
CUSTOMER: "People in your line of work are so greedy."
CONTRACTOR: "Sorry you feel that way. Why not do it yourself?"
CUSTOMER: "But... but... I don't know how to do any of this."
CONTRACTOR: "For $900 Dollars, I'll teach you EXACTLY how to get this job done. Then you can spend $800 to do the job and you'll still be saving $1,100 Dollars - PLUS... you'll get the knowledge and experience for the next time you want to do a job yourself."
CUSTOMER: "Deal!! Let's do it."
CONTRACTOR: To get started you'll need tools. So you'll have to buy a welder, a grinder, a chop saw, a drill press, a welding hood, gloves and a few other things."
CUSTOMER: "But I don't have all this equipment and I can't buy all of these for one job."
CONTRACTOR: "Well then for another $300 more I'll let you rent my tools... and you'll still be saving $800 Dollars."
CUSTOMER: "That's cutting into my savings. But I'll rent your tools."
CONTRACTOR: "Okay! I'll be back on Saturday and we can start."
CUSTOMER: "Wait. I can't on Saturday. I only have time today."
CONTRACTOR: "Sorry, I only give lessons on Saturday, because I have to prioritize my time and my tools have to be at other jobs with other customers all week long.
CUSTOMER: "Okay!! I'll sacrifice my family plans on Saturday."
CONTRACTOR: "Yeah... me too. Oh... and I forgot... to do your job yourself, you also have to pay for the materials. Everything is in high demand right now, so your best bet is to get your truck and load up at 6AM before everyone else gets there."
CUSTOMER: "SIX AM??? On a Saturday??? That's way to early for me. And also... I don't have a truck."
CONTRACTOR: "I guess you'll have to rent one. Do you have a couple of strong men to help you load and unload everything?"
CUSTOMER: "Ummm... ya know... I've been thinking. It's probably best if YOU get this job done. I'd rather pay someone to get it done correctly than go through all the hassle.
CONTRACTOR: "Smart move, sign this and please get out of the way so I can work."
THE REALITY IS THIS...When you pay for a job, especially handcrafted, you pay not only for the material used, but you are also paying for:
Knowledge
Experience
Tools
Services
Time
Punctuality
Accountability
A Completion Time Frame stated in writing with penalties to contractor should it be exceeded.
Project Supervision By The Proper Person
Drawings & Work Permits (If necessary on your project).
Professionalism
Accuracy
Labor
Sacrifices
Safety and Security
Liability Insurance
Worker's Compensation Insurance
Other insurance for vehicles, tools, and equipment
Payment of tax obligations for company & employees.
All Subcontractors (if used) must be properly insured as well.
Send out 1099"s to any sub contractors or helpers they use that are not listed as true employees of the company.
NOTE: In certain cases a single owner of a company who does all the work himself can be exempt from carrying Workers Compensation Insurance. Should he tell you that he is exempt he must show proof of this by way of an exemption form issued by the State of Florida naming his company or himself exempt. If he has helpers helping him they either need to be true employees that get a paycheck and taxes taken out of their paycheck and need to be covered under his workers compensation policy, which means if he shows you an exemption form from the state, he doe's not have the coverage and anyone helping him on your project is not covered by this insurance nor are they a real legal company employee. If any of these illegal helpers get hurt or injured on your project while working on your premises you as the homeowner are responsible for his injuries and all medical bills or lawsuits stemming from this situation. The contractor who lied to you is not responsible because it is not his property where the injuries occurred.
If your main contractor hires sub contractors to complete certain portions of your project then each sub contractor must have their own insurance including workers compensation if they have employees working on the project. If he pays different laborers periodically on jobs he does does for a few weeks at a time then the contractor who hires these day laborers is responsible to send them a 1099 form at the end of every year stating how much he paid them over that year and they would need to pay their own taxes on the money they made over that year from the company. Also should these day laborers get hurt while working on your project they are not covered by the contractors workers compensation policy (if he has one) because they are not listed as true employees which get a weekly paycheck with taxes taken out. Sadly many contractors play many games with the law which gives them a tremendous advantage on how much they charge for the work they do for you. They can charge half the price by playing all the games they play which the general public is completely unaware of. The level of integrity of many contractors is, let's just say not that high.
Again, you need to be careful of so called contractors stating that it is their name on any state or county license they show you and that they are the ones either doing the actual work themselves or having real employees working on the books, paying taxes, and are covered by workman's compensation should anyone get hurt on your property. Should this happen, the contractor or contracting company is not the one held responsible for this workers injuries or medical bills if any. The homeowner is the responsible party. Make sure you are very clear of exactly who is working on your project. Check into this before hiring some bargain contractor that charges half the price for his services but also not only doesn't abide by the laws in the state of Florida, but takes 3 times as long to finish your work if they finish at all. Many of these outfits show up for work two days a week which means you will suffer and be stressed to the point that it could actually effect your health in a serious manner.
Also just because someone has a state certified or county certified General Contractor, Building Contractor, or Residential Contractor's license doesn't mean they are allowed to do any of your plumbing or electrical work. There are one or two cases where the state of Florida may allow the most minor thing to be completed by a state or county certified general, building, or residential contractor.
There are many more factors involved in which the general public is completely unaware of that these law breaking low ball contractors completely ignore just so they can charge you half the money of a true and real professional contractor You can't haggle over a service that you don't actually have the skills or knowledge to do yourself. You can't get a high quality gourmet dinner party for the same price as a Happy Meal from McDonald's. You can't have your work completed in the same time frame as a true professional contractor who is diligent and understands the importance of interrupting a clients life by having a mess in their home, etc. etc. etc. You also can't be mad when skilled people actually KNOW their own worth.
Be smart. Trust a reputable professional. And never forget... that you ALWAYS get what you pay for.
The actual bottom line cost of your particular project will depend on many factors. Will you be using custom or stock items. What are the existing conditions. Where is the location of the project. Will there be difficulty in getting materials to the site, are you using a fully Licensed & Insured Contractor etc. You can talk to several different contractors and receive several different prices. We have outlined some very important concerns in the pricing area below.
In most cases the contract with your general contractor will be the single largest cost item in your remodeling budget. A good professional and fully experienced contractor can bring your project in on time and within budget saving time and money. A poor inexperienced contractor can be responsible for long delays and cost overuns, costing time and money. When it comes to renovation and remodeling work, the success or failure of your project directly rests on the skill and integrity of your contractor for the most part. It is critical to select a fully licensed and experienced contractor who is completely familiar with your exact type of alteration project. You must consider the reputation, relevant experience of the contractor, his team members, and the services they offer.
Experts say that there should not be more than a 30% difference in price between contractors. For the most part, we agree with this theory. However, this is providing that the contractors you are considering are providing the same quality of work, the same level of professionalism, and the same type of supervision by a truly qualified individual on site throughout your project on a daily basis. This also assumes that they are all playing on a level playing field by doing business legally and ethically. It assumes that they are not misleading their perspective clients in any way in regards to their company and the work that they claim to do, or have done in the past.
Professional Services Inc. is a company which is fully licensed, fully insured, and pays it's taxes. There are many contractors who are unlicensed, uninsured, and do not pay taxes. These individuals or companies can afford to charge 25% to 55% less than a true legitimate professional contracting firm. Having looked into this very issue, we know that if we do not pay taxes, liability insurance, disability insurance, and workmen's compensation insurance our profit margins would be twice to three times as much, or our pricing to our clients would simply be lower. Also, in comparing prices you must make absolutely certain that your are comparing apples to apples. Know exactly what materials are to be used for every aspect of your project. A real professional will put in writing exactly what is to be used down to the last detail and model number. In life, you get exactly what you pay for, and in the contracting industry this means the materials which are used to complete your work as well as the professionalism and integrity of the individual or contracting company which you are dealing with. Remember, the lowest price isn't always the best price for several reasons.
Our contracts state with pinpoint accuracy, what is, and is not, included in the work, so there is no "change order game, or additional charges." We list every stitch of work that we are about to do for you in our contracts. We also insist that before you sign our agreement that you or your attorney review it and discuss it thoroughly with us to be certain that everything you desire is in the agreement. Many contracts prepared by the average contractor are simple one or two page documents that are ambiguous or vague. They can be misleading, so it is critical that you make certain that everything in your contract is spelled out 100% accurately and all inclusive prior to signing it.
Our staff or sub contractors are highly experienced at each task they perform. They have been fully trained for each specific type of work that they are about to complete for you, and have performed these tasks over and over, again and again, for many years. We expect nothing but top quality work from our staff, which they are fully aware of and happy to produce. Quality and craftsmanship costs money. Having a helper or so-so carpenter install your finish trim and moldings instead of a trained and fully experienced master carpenter saves a company a bundle. This is especially true if an unethical and/or poor quality contractor knows that someone else is coming in behind him to do other types of work which tie into his trim installation. The quality problem gets passed onto the next guy (which in this case may be the painter) who has to fix it to get his portion of the work to look right. Professional, Reputable and Quality conscious contractors simply make sure that every single portion of your work is done to the highest level of craftsmanship humanly possible by the most qualified individuals on the team.
Just so you understand let me go over this scenario one more time. Some so called contractors use what is called Day Laborers. Day laborers are workers who are not regular full time staff employees. They are workers who are picked up off the street at certain particular pick up spots and used by the contractor to perform what ever task they may have some slight experience at on your project. Using this type of labor is just like rolling the dice and trying to get lucky. The use of Day laborers also allows the contracting company who uses them the liberty of not having to pay certain insurance on their labor. This is great for them, but not so good for their clients.
Unethical contractors of this nature are blatantly misleading the public and breaking the law. When caught, they will pay the consequences. The proper agencies are cracking down on these illegal operations by shutting them down, and confiscating their tools and vehicles. Should one of these contractors be in the middle of your job and get caught either by accident or because someone reported them for not operating under the law, you are the one who will suffer. Think twice before you base your decision on which contractor to hire on how much it costs. These types of contractors will always be much less than a real company who operates within the law and has all required items necessary to complete your project for you.
Day laborers can not be held accountable for the work they do on your renovation project simply because they are not full time regular staff employees. They are only present on your job when needed. In many cases, contractors who use Day Laborers end up having different people working on your job each week, or every few weeks. Even in the case where you get lucky and have these same day laborers on your project every day throughout the renovation, the overall quality and craftsmanship leaves much to be desired. Also should one of these individuals get hurt or have an accident on your property during the course of them performing any type of work on your project, you and you alone will be held responsible and can be sued for his or her injuries. The contractor who brought them in does not own the property, you do, so you are responsible.
Contractors who do not charge appropriately for their services will not be around for very long. In many cases, the average contractor is not business savvy enough to know that they are not making a profit on the work they do for their clients. Just about every so called contractor knows how to figure out direct costs. However, most of them really have no idea on how to account for profit and overhead, or how to apply an appropriate markup to cover their insurance costs, and all other associated costs which are part of your bottom line number. If these so called contractors were operating legally and had even a clue as to what they are doing, their end prices would simply be much higher and the industry itself would have a better reputation. In this case the 30% differential would apply.
Unfortunately, there will be many who read this information who will not allow it to sink in simply because their only concern is how much they pay to have their work done. At the very least, they will put much more emphasis on the bottom line price than any of the other factors which truly outweigh costs. They will insist on believing or hiring whoever gives them the lowest price. They may even get two or three prices from unethical, inexperienced, inadequately trained, and poorly skilled, so called contractors which are pretty much in the same price range and say to themselves, well, three contractors gave me just about the same cost, so it must be correct. Sadly, many of the companies out there posing as contractors, are really not contractors, and the numbers of these types far exceed the real professional contracting firms. It is quite possible to get three bids from amateurs who do not have the proper insurance coverage, proper required licensing, or the true knowledge, skill, proper work ethics, and years of documented work experience of a legitimate contractor.
Some so called contractors even go as far as to forge licenses, insurance certificates, etc. to show proof that they actually exist and are in force in either the individual's or company's name. Others use the licenses and insurance certificates from underhanded, greedy, licensed contractors and pay them a fee to let them use their paperwork. The bottom line is, that you must do everything in your power to check references of those who portray themselves as a contractor. By not doing so, it is quite possible to literally waste the money you do spend on your project by going with the lowest price theory. This is simply because in the end, your completed project is nothing compared to what you desired, imagined, or were told you were going to receive. To add insult to injury, your journey in dealing with your unprofessional illegitimate contractor to get to the end of your finished project, could very well end up being a nightmare. We strongly suggest that if you do not have enough money in your budget to remodel or renovate at the particular time you wish to do so with a true professional contracting firm, you should simply hold off and wait until you do. It is better to hold off rather than hire the wrong company just because their price is lower and you think you can get the work done right away.
We have posted this page in an effort to open your eyes and raise awareness with consumers in regards to the entire pricing issue picture. It is our belief that an educated consumer is armed with the proper tools to make the right decision in their contractor selection process. We have also posted some articles which discuss this area of concern. Please see what others are saying by clicking the links below. Should you have any additional questions or comments concerning costs, please do not hesitate to Contact Us.
