Value of Cash

[Peak53]

Most of us know the frustrations of trying to get contractors on board to do work around the homestead. I've spent the last seven weeks clearing out the place I've lived the last 24 years in preparation for sale. The house is now empty except for my bed, a small table, and a chair, oh and a microwave. That includes a large garage and shop with decades of accumulation. Whew! A combination of sales and grand giveaways.

When I got the house empty, I realized how shabby the paint and carpet really looked, so decided to replace that stuff. Through a stroke of luck, I managed to get a certified local painter out right away for an estimate. He was highly recommended by my realtor. He wanted 50% down, seemingly standard. We started talking about payment options since my checkbook is not at this location and credit cards are fee-bound. Seems like PayPal, Zell (or something), and maybe something else I never heard of were options.

I said, "Do you accept cash?"

"Of course. If you pay cash, I can start on Monday."

So, he followed me to the bank, I handed over the 50% (with an internet receipt), and I have no doubt he and his two sons will be here forthwith at 9 am on Monday. He says 5-6 days to complete the job. From our conversations he has high expectations for his quality of work and included some things I would not have expected for his price.

Same day, the realtor hooked me up with a carpet warehouse who actually turned out to have great prices. They can install 48 hours after the painter finishes (seems reasonable) and then I can put the house on the market for about 3.5x what I paid for it in 2000. I'll have spent less than 10K but should realize 40k or so in the sale. I count this as a good day.

I consider myself extremely fortunate in being able to get this work done in a timely fashion. Of course, it's not done, yet, but confidence is high. Do you have recent home improvement/contractor stories, daydreams, or nightmares?

 

[madmikeb]

I can add my current nightmare to this! Selling my house of 32 years. During the home inspection it was found that I need a new septic tank and leach field. This was to be done before the closing. Hired a contractor to do the job approximately 2 months ago with the stipulation that it would be done before the closing on 5/15 which is 5 days from now. Job is still not done with 5 days to go. Talked with the contractor Tuesday morning and he said it will be done end of this week, first of next. It's Friday night so I guess it won't be done the end of this week! Told him movers are coming Monday and driveway will be blocked. His comment was that we'll have to work around each other.

So movers are taking all my stuff on Monday, vehicle shippers are taking my car and truck Monday, supposed to be closing on the house in Arizona on 5/24 with everything delivered on the 25th. At this point I don't know if we will be able to close on my house Wednesday as I don't know if the septic will be done. If we can't close here I can't close on the house in Az and all my stuff will be out there with no place to deliver it.

Good times!

 

[444 Magnum]

Gold was discovered in Dahlonega GA in 1828. With so many claims being filed, a new courthouse was proposed.

John Humphries won the construction contract with a bid of $7,000. He stated in writing that he would construct the new building in 18 months. He was given a $2,000 advance, never began the work, and eventually fled the area.

Human nature has not changed and, unfortunately, construction draws out some of the worst.

I don't live in Colorado so I'm not familiar with your business practices. I am a contractor in the Southeast and I can tell you that, in my personal experience, I have been beaten out of money twice by sub-contractors. Both times I advanced more money than the amount of work that had been completed. I don't do it any more-no matter how sad the tale of woe. No work-no money.

About the only thing I pay advances on is custom cabinetry.

I hope it works out for you; but I would never advance 50% of the labor on any job-especially painters.

If he says he needed the money to buy the paint, I would be suspect. Most professionals have accounts at the paint stores and don't have to pay for the paint until the first of the month.

As stated, I hope this works out well for you, but I do not recommend making a habit of it.

 

[Rudi]

Cash is king, as the old saying goes.

 

[alwslate]

50% in a cash advance before starting? Stinks all the way here in Indiana to me given my experiences with scammers in recent years. I wouldn't have done it. Cash is king? Cash is untraceable. Keep your fingers crossed.

 

[Bald1]

50% is a huge advance. I would not have done that. But I wouldn’t worry until it’s time to worry. I’m sure it will work out……. On the other hand maybe the contractor is sick of getting jerked around by customers. And wants some assurance

 

[jeffrefrig]

I'm sort of in the same boat. Well, actually, I'm still looking for the boat docks, but 20 years here and I need a dumpster. I have to see exactly what my realtor wants me to do inside the house. It really needs painted and the wood floors need another coat of clear. Outside trim needs painted 1st. But I would love to have someone even answer the call.
I would think if my realtor suggests someone, they're going to do what & when they say. When I had my roof replaced years back I agreed to pay 1/2 when the dumpster and supplies showed up on property, 1/4 at about halfway done, and the rest on completion. Worked out fine at that time, and cash gave me certain discounts. I hope it works out for you, Peak53. Curious, did you store the furniture or buy a new place first? That's about what I might do, and hope like heck all the work gets done quickly. Right now it's a seller's market here.

 

[Greyman50]

An old saying, “Money Talks, B.S. Walks” seems to apply to many cases. I will Never pay any contractor in advance as I’ve been “ stuck” with lame low quality ones in the past. I also stick to the above mention regarding contractors having accounts with their suppliers to obtain whatever.

 

[taz666]

It's a two way street fellas. Do your homework* before a hire and deposit is awarded.



*references, including past and recent customers. If time is of the essence, you need to have a contract drawn up with some teeth in it. ie. legal penalty for non completion.

 

[Tom S.]

I didn't see anything about a contract. Just remember, a verbal contract isn't worth the paper it's written on.

 

[Skeet 028]

Cash still works. Had my cell phone fixed...was going to be 200 bucks...160 cash...I asked discount for cash? Yep Hey 40 bucks is a nice meal out for my wife and I! I wouldn't have fixed it but needed my contacts

 

[LoboGunLeather]

Home improvement contractors of all kinds seem to share one quality; about 98% of them give the rest a bad name.

My usual rules are:

1. Written agreement specifying scope of work, materials to be used, any warranties (materials manufacturer, workmanship, etc). Any changes must be by written agreement.

2. I don't mind paying for materials up front, but I do so at the suppliers so I own the materials.

3. I insist on an agreed start date and finish date, and there are penalties for failure to complete the work as agreed.

4. Payment only upon completion, no exceptions. Written receipt and lien waiver in exchange for payment in full.

Your methods may vary, as may your levels of satisfaction.

 

[Onomea]

I once needed to rewire a townhouse. Electrician said he could do it in two days, but asked for a third day for margin.

It eventually got done in three months. (And, in general, doling out the money in small payments as work progresses is a good way to go. Gives you some leverage, anyway.)

 

[45Smashemflat]

I used to pay brick masons “by the brick on the wall” at the end of each day. Made for an interesting end of day ritual.

Yes, certainly pay for materials up front, if needed, but buy them yourself. Pay for labor upon completion.

 

[THE PILGRIM]

Hey Peak53 - Best of Luck on your Move.
Where are you moving to?
As I have posted, I’ve been all over CO but never to Tincup.
Closest I ever got was about 10 miles away.

 

[444 Magnum]

My usual rules are:

1. Written agreement specifying scope of work, materials to be used, any warranties (materials manufacturer, workmanship, etc). Any changes must be by written agreement.

2. I don't mind paying for materials up front, but I do so at the suppliers so I own the materials.

3. I insist on an agreed start date and finish date, and there are penalties for failure to complete the work as agreed.

4. Payment only upon completion, no exceptions. Written receipt and lien waiver in exchange for payment in full.

Good luck getting painters to agree to all of that.

Residential construction is my second career after commercial banking. I've been doing it for about 20 years now. I build spec homes and do remodeling/storm repair by referral only. I don't advertise, send out flyers, or knock on doors. I don't give references because I don't need to--you were referred to me...remember?

I rarely ask for any money up front. I was told a long time ago that this was a mistake, but it hasn't been as yet. About the only time I'll take money up front is if materials have to be special ordered and the job is several weeks out. This is simply a matter of not tying up my money.

On small jobs, a handshake will do. No money until I'm finished. On larger jobs, a simple one page agreement outlining the job and how/when I am to be paid. If it's a long, expensive project I will get scheduled draws based on completion.

I take customers in order of commitment. I work one job at a time. I'll start the next job when I finish this job. I'll give you an estimate (usually fairly accurately) as to when I'll start on your job. I have had a waiting list up to 18 months in the past. Customers knew this up front and were willing to wait. Existing customers with catastrophic events get immediate attention to stabilize their situation.

I will not sign a contract with completion requirements and penalties-those are for large commercial jobs. Too many things happen in construction that I have no control over. Hurricanes in FLA lead to drywall and shingle shortages, covid leads to everything shortages, too much rain and we can't break ground, etc., etc.

I won't let customers buy the materials for the job. They NEVER get what I want/need. It's simply a waste a time. I pick them up or have them delivered.

I bill my jobs in two ways. I give a 'turn key' quote or cost plus. Many jobs are difficult to know what you'll run into; so, if you want a 'turn key' price, I have to account for the unforeseens. I work for an hourly wage on many jobs-the same way electricians, plumbers, and HVAC service men do. It's an honest way to work-I get paid for what I do and you only pay for my actual time- not my perceived time or 'book' time like auto mechanics use. Materials are my cost (usually lower than yours) plus 15% O&O. I don't charge for mileage.

Insurance jobs are the best. If you have a claim, hire a good contractor who has worked with adjusters. They NEVER give you all the money up front and you won't get it and the depreciation that's with-held if you try to manage it yourself. I have experience with insurance companies and I know how to squeeze the extra money out of them so I can do top notch work for you and throw in some extras. You will have to pay your deductible. It's the law. I can't "refund" your deductible--that's insurance fraud.

Sometimes job descriptions get expanded. If I tear off a trim board and find more rot, it's coming out too. If I come across dangerous/faulty electrical work, it's getting fixed. If you don't want it done right, don't call me. I don't cover anything up.

My warranty is my word. I get no complaints and no call backs because I do it right the first time.

I don't bid on jobs were homeowners are looking for multiple quotes. I'm never the highest but I don't try to be the cheapest either. Too many drunks and dope addicts out their willing to underbid to get the work. Hire them at your own risk. They'll screw you nearly every time in some form or fashion. The adage "you get what you pay for" has never been more true than in construction.

You don't like my methods/terms? No problem...it was nice meeting you.

Rant over.

 

[dave1918a2]

When I listed My house in Colorado the Realtor gave Me a list of stuff to do. Paint, carpet, roof, windows, ETC. I said no I'm not going to do that. The new owners can put in what They want. Realtor told Me She couldn't sell it unless I did. Told Her goodbye. One of the people I walked My dog with was also Realtor so I asked Him if He could sell it. He said yes and three days later it was sold for more than asking price without doing anything.

 

[cololab]

Home improvement contractors of all kinds seem to share one quality; about 98% of them give the rest a bad name.

My usual rules are:

1. Written agreement specifying scope of work, materials to be used, any warranties (materials manufacturer, workmanship, etc). Any changes must be by written agreement.

2. I don't mind paying for materials up front, but I do so at the suppliers so I own the materials.

3. I insist on an agreed start date and finish date, and there are penalties for failure to complete the work as agreed.

4. Payment only upon completion, no exceptions. Written receipt and lien waiver in exchange for payment in full.

Your methods may vary, as may your levels of satisfaction.

100% Agree. I also insist on proof of insurance and make it clear that no one other than those legally entitled to work in America are permitted on my property.

 

[444 Magnum]

100% Agree. I also insist on proof of insurance and make it clear that no one other than those legally entitled to work in America are permitted on my property.

What kind of insurance? Most homeowners don't even know.

A business owner can get worker's comp on his secretary and show you a certificate of coverage. The actual workers may not even be included. I've seen it more than once.

 

[Onomea]

...I don't bid on jobs were homeowners are looking for multiple quotes. I'm never the highest but I don't try to be the cheapest either. Too many drunks and dope addicts out their willing to underbid to get the work. Hire them at your own risk. They'll screw you nearly every time in some form or fashion. The adage "you get what you pay for" has never been more true than in construction...

I mostly agree with this, but with a caveat.

When I was just starting out in business, my boss put me in charge of negotiating a contract with a subcontractor. I negotiated a price at considerably less than the subcontractor's proposal, and thought I'd done a great job.

The subcontractor did a lousy job. What I realized, after the fact, was that I had not given him enough budget to do a good job. In short, through my "negotiating skills" I had made it impossible for him to do a good job.

This was a great lesson for me, and I never forgot it.

My caveat is that for most work on my home or yard I will solicit multiple bids, but, I rarely choose the cheapest bid. I try to weigh the proposals and choose the guy based on a variety of criteria. (I should also point out I am relatively new to the area, so do not have established relationships to rely on.)

During my own career, I used to tell customers that if they were after the least expensive product, they should choose a competitor, not us. We were selling a Lexus.