5 Things General Contractors Wish You Knew
Keeping prices low, clients happy, and job sites moving
1. When builders are in a bidding competition, their prices will always be unrealistically low
When I am bidding on your home, and I know there are other competing bidders, the budget portion of my proposal has to be presented as low cost as possible. Other portions of the selection process like trust, presentation, and referrals all take care of themselves and are a much more subjective measure. But the budget is a very specific number that will be compared against the other contractor's bids, so it has to be competitive.
When I do an estimate, I have to choose what materials are in the estimate, when you have maybe never given some of these things a single thought. As an example, I can buy a doorknob that costs $50, and I may need 20 of them and the total cost would be $1,000. But I also know that most of my clients actually choose to spend about $150 on each doorknob, meaning this cost will actually be about $3,000.
Which is the more prudent way to go? If I enter what I truly think the house will cost, I will be the most expensive bidder in the group. If I go the cheaper route, I am building your home with the cheapest products available. That rarely feels good to people.
For me, the answer is to offer estimates with one column for the lowest price and one for the highest price. Your project will land somewhere within that range. As you get closer to construction on site, more details come into focus and the cost is more solidified, but early on you should work with ranges only... and know that if you're not, you're probably working with the low end of the range.
2. expect your builders to make mistakes
Every project is different and comes with a new set of obstacles and challenges my crew and I have never handled before. I have never remodeled your home before, and I barely know you, but I am expected to predict everything that will possibly go wrong and have a solution for it.
I have literally been in construction for over 30 years. I make mistakes on every single project. Most mistakes are turned into works of art, or blended into the environment and never noticed. An old-timer once told me “you’re only as good as your mistakes” and I have been pondering that phrase for my entire career. Some mistakes are the best thing to happen in the project.
In remodeling particularly, as opposed to new construction, the contractor has to react to existing conditions and do a good deal of head scratching and phone calling to resolve relatively small issues. These are not mistakes per se, but show how your builder must be able to react to unforeseen challenges all day every day. It's all about rolling with the punches.
3. Sometimes, in order to build your house, I don’t have time to meet with you
I know that sounds like bad customer service, but in our eyes, it is more about good time management. Builders are surrounded by and consumed by ever-evolving decision-making details all day every day. We crave any type or predictability and consistency that comes with a hard and fast plan.
Without fail, meetings with owners almost always result in some type of change to the plan. And often times, these changes are not really making anything "better," they are just switching between two different but equal options. When we limit unexpected meetings, we are better able to stay on track, stay within the budget, and finish around our projected completion time.
4. A group of workers that have worked together in the past will perform better than a group that isn't familiar with one another
There seems to be general knowledge that contractors get bids for each and every part of your project to control costs and ensure estimates are competitive. In truth, that's not always in everyone's best interest. Let me explain.
Think about every business book you’ve ever read or any class or seminar you’ve ever attended. They tell you to surround yourself with people that will uplift you, complement you, and make you a better person. A good team takes a long time to build. Think about every outdoor adventure you have ever been on. The more challenging the goal, the better people you want around you. People you can trust your life with.
The tradesmen are in the same situation. We are faced with a huge amount of responsibility and take our jobs very seriously. There are employees’ lives at stake on some sites. Scaffolding, cranes, open pits, big winds, lots of people… a big job site is like taking a fleet of rafts down the river-I want to be surrounded by the best. I want people I trust my life with.
For me, the answer is to work with the same group of key subcontractors on a regular basis, and to only change one sub at a time on any project. This creates continuity, accountability and ownership in all of the people involved. You may ask “then how do you control costs and ensure estimates are competitive?”
The local market prices for construction are fairly reliable in each region. For example, the cost of tile installation labor in the Roaring Fork Valley has remained steady at about $15-20 per square foot for the last 15 years. So if my tile installer of choice is within that range, the client and I both save money with a sub that is familiar, reliable, stable and dependable. Sometimes a preferred sub contractor grows too big, or changes substantially enough that I will start to look for a replacement. In those cases, I will do multiple bidding so I can conduct interviews for a new subcontractor.
5. That last check to the builder is the most painful one
At the beginning of the job, you give us money to spend on your behalf. At the end of the job, we have spent our own money to bring the job to completion. It’s a weird phenomenon that transpires over the course of months, but when I am waiting for your final payment, I have already paid off the entire cost of the work with my money. Even if we have documented every change order and signed every monthly invoice, that last check is the hardest one to write.
Please follow through on the promise you made me when this was still just a dream and send that last check. My team and I did our part by building your one-of-a-kind project and at the end of the day just need to get paid.