By: Revanche

On the home(buying) front: money choices

July 31, 2017

[Part 7] This whole post is going to be so much money. About so much money, I mean. Lots and lots of money. Stimulating the economy beyond anything I’d ever imagined would happen in this lifetime.

Hiring out work

The contractor’s labor, and the subcontractors’ labor, is a set price for the most part. I’m saying up front that we’re paying a premium for the general contractor whom we’ll call Bob and I didn’t negotiate a penny of that. Those of you who know me won’t even open your mouths to ask if I was “too embarrassed” to ask for a discount like some people thought.

It was deliberate. I’m a star performer at work, and I know how to treat them. You pay good money to get exceptional results. You do not nickel and dime someone who is going to play a huge role in quality control, and attend to your every need. That’s the best way to demotivate them.

Every week, my decision and refusal to negotiate his rate proves that Bob is worth every penny. He’s honest, hardworking, prompt to reply to any and all questions (stupid or not), shows up whenever and wherever we ask, on top of keeping the project on schedule. By the way, he wrote up a highly detailed schedule for us to work by. All of that makes him a total gem and a complete anomaly as a General Contractor, from the anecdotes of all the horrified friends and family hearing we were on a tight timeline.

But that’s not all!

• He advises us on the best places to source our materials and helps us find discounts without compromising on quality.
• He’s cultivated relationships in the contracting world: he chatted up the project reviewer which resulted in the job being classified as an update, instead of a renovation, and saved us $2700 in permitting costs. I would not have known to ask for that concession!
• When we decided to save money on one of the “work in every room” aspects of the project (lighting) delaying it for later, he discounted his own rate by $350 to do the full job now. We didn’t ask, he offered.
• When he made the wrong call on one of the walls, costing us an additional $500 in work, he made up for it by footing the bill for expensive aesthetic work that I wouldn’t have wanted to pay for, but PiC would have wanted.
• He’s offered us lots of reclaimed and leftover supplies from previous jobs that the owners just wanted dumped. So far, that’s worth a smidge north of $1000.
• The quality of his work is top notch so we passed rough inspection with flying colors.

By the end of this job, I anticipate that he will save us at least half the cost of his fees by doing stuff like this for us. Then there’s simply no price I can put on the sanity that he preserves by doing his actual services: coordinating all the work, hiring and managing the subcontractors, picking up all the materials that we purchase and checking them for damage, making all the returns.

The power of a warranty

Pretty much everything in this place is old enough to be replaced but we have to pick our battles. The roof is old, the wiring is old, the plumbing is old, the water heater is older, the furnace probably has a beard.

However, our realtor bought us a warranty that will cover all appliances, minor roof leaks, the water heater failing. She’s not so sure how well it covers plumbing because her experience has been that they’re finicky on which bits of pipes they’ll cover. Neither of us are willing to play the odds on whether or not the old wiring will catch fire, either, so we’re attacking those items now.

We’ll cross our fingers that the roof isn’t damaged and the water heater keeps truckin’ – but if it does, the warranty is more straightforward on those.

Negotiating costs

There are two places where we can really run up the bills, according to Bob.

The first is our selection of the finished materials like cabinets, flooring, fixtures, and so on. You can choose a $200 toilet, or an $800 toilet. A $20 showerhead, or an $800 shower fixture. Oh yes, you can spend $2000 on a door! (We did not.)

There’s not a lot of negotiation to be done but there are some bits you can do, aside from asking yourself if you REALLY need that super awesome rain bath showerhead.

1.  Ask for large volume discounts. Home Depot’s Pro shop gives a high volume discount on any orders that are over $1500 in addition to whatever other sales and discounts you can get.
2. Ask for small discounts. Our contractor gets a small discount if you use his pro account. We do!
3. Bob also advised us that you can often request a 10% discount at Home Depot just because if you go to the assistant store manager, or escalating to the store manager.
4. Ask for discounts just because! I online chatted with the good folks at Build.com to ask if they could beat the pricing I had in my cart and they did.

The second place is scope creep, AKA those AWOs that pop up on our progress invoices: Add Work Orders.

Those come up when you’re taking down walls to studs, thank crepes that you did and howl a few choice curses at the moon for what you found: more dry rot. If you didn’t find it, you would have fallen through the floor in about 8 months. Or your new windows would have fallen out when the dry rotted framing inside turned into a pile of splinters. Or when you realize that there’s black mold creeping across the back walls that the seller’s piles of belongings covered up. These weren’t in your original contract and that’s how the Bobs of the contracting world really make their money.

I’m so grateful that Bob was upfront about this little detail – we restructured our entire plan in the first week based on that advice and the saving is clear.

Spending choices: charge it up!

I could have chased down discounted gift cards to pay for supplies, saving 5-7%. For this project, though, I wanted the price protection from my credit card.

American Express will make it right if a store won’t honor their return policy. If something breaks or goes missing, I have protection for 90 days. We are buying tens of thousands of dollars worth of merchandise. I do not need to expend any personal energy fighting with any single merchant, and paying with the credit card is my insurance against that.

:: Would you (have you) have made any decisions differently? Do you have regrets on hiring someone cut-rate or did you have a great success story in getting a deal?

Before: Background, Part 1, Part 2, Part 3, Part 4, Part 5, Part 6

Next on our Home Buying Adventure: Part 8, Part 9, Part 10, Part 11

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