Why Hiring the Right Contractor will Save You Money

Aug. 31, 2023
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Written By Randy Fernandez

Today, with the encouragement of HGTV and thousands of DIYers on Youtube posting “how-to” videos, many homeowners are tempted to become their own self performing craftsman or project manager for their home’s construction project. If one has the time, the unlimited resources, the tools, the space, and the patience to deal with an area of your home under construction for a length of time, then, by all means, give it a go.

However, if you are like most people, your life doesn’t afford the luxury of tackling a home improvement project due to the above said reasons being nonexistent. The primary reason most homeowners would even consider attempting to perform their own renovations is to reduce Cost. With inflation increasing at an average of 3.7% annually for each of the last three years, consumers have seen the cost of goods, which include home building materials and supplies, increase altogether along with the cost of living rising overall at 8.7% in 2023 alone. The rise of fuel, supplies, materials, fixtures, and labor have raised the national median for a typical bathroom remodel project to well over $22,500 for a mid-grade project, up from $10,246 in 2018.

With that jump in costs, I can’t blame a homeowner for giving the DIY route some consideration. Nevertheless, I strongly urge you to really think it through logically, and do not make your decision on an emotional impulse. Again, the budget for a typical bathroom remodel lies around the $22,000 range. Sounds kind of steep, but to be honest, I have personally experienced situations where a homeowner went forth in performing their own remodel and cut corners during the repairs in an attempt to cut costs only to end up having to throw in the towel, hire a contractor, and incur more expenses in the total cost than saving money.

This article isn’t to discourage individuals from taking on a remodel project themselves or to create an impression that all people are incompetent in performing their own renovations. It is written to help you, the consumer, understand how hiring the right contractor will save you money.

Many opportunities exist for a Contractor to add value and find savings. Here are several key areas: Materials, Legal Accountability, Craftsmanship, and Insurance.

Let’s begin with Materials. Many contractors with years of business will have accounts established with multiple industry vendors and suppliers who do not service the public. Many of these supply houses provide a higher grade of quality materials than the big box chain stores and they do so at a discount to clients with accounts. Though it is a customary practice for contractors to mark up their supplies and materials, there are many contractors who will pass on the savings to their clients. You can spot “these” contractors rather easily because they are up front about it. Another factor to consider is that the right contractor will provide higher grade materials to deliver a quality product. These materials are a higher price, but they are, in most cases, a better product which performs better and is usually accompanied by a solid warranty if issues were to arise with the product.

Licensed contractors provide legal accountability. A licensed contractor is regulated by the Contractor’s State License Board for the state the license was issued. Any client can verify on the State Board’s website if a potential contractor’s license is valid and in good standing. This means that there are no claims or suspensions filed against the license and that the bond associated with said license is current. Bonds help protect and provide security for clients in the event there is financial damage to the client due to the contractor not adhering to state laws and regulations as outlined in the State’s Business and Professions code. A contractor abusing State laws runs the risk of incurring a bond payout, which they are liable for, disciplinary action by the State Board and possible revocation of their state license. How does this save the client dollars? Imagine the hordes of people who decided not to hire a licensed contractor and chose to hire the “side job bob” contractor – that’s what I call them guys. In most cases, these guys ask for a down payment, which is usually a lot more than the legal limit of 10% mandated by the State Board, and then they pull Houdini’s greatest trick and disappear. I have come across multiple clients who have signed over thousands of dollars to these characters in the hopes of saving money by accepting the lower bid when compared to the licensed counterparts, only to lose out on their deposit. And there is the other common behavioral trait of these unlicensed contractors and that is to leave the project unfinished and walk off the job – most likely due to the project being more than they can handle or not profitable at their low bid. In the event of both situations, money was handed over from the client and is nearly impossible to recoup. The client is already losing money and add to the fact that a licensed contractor will come in with his cost to complete the whole project – most will have to redo any work that has been completed to guarantee their services.

Craftsmanship. Quality craftsmanship is delivered by a skilled crew or tradesman with knowledge of their trade’s practices, materials and performed with integrity. The saying “you get what you pay for” cannot be truer when it comes to construction projects. Have you ever walked into someone’s house where a remodel project was completed and you can see where old walls were removed due to the poor drywall work, a lock and click floor system not properly installed with separation at joints and seams not spaced according to standard practice, or grout lines on new tile not straight and level. Now the homeowner must decide to live with the subpar performance, have the subpar crew redo the work – that is if they will even agree to it, or pay another crew to come in and make the corrections. Some people can live with it, others might get the unlicensed crew to make the necessary corrections, but, from my experience, I have seen the clients have to hand out more money to get it done right. Poor craftsmanship raises another question, can the client trust the integrity of the work completed? If poor quality is evident in the finished product, what is to say that the rough in work that can’t be seen is any better. This can lead to failure of materials or systems installed in the walls or under the floor coverings, etc. Again, this will cost the client additional time to deal with it and additional dollars to correct it.

Insurance. All contractors should carry out a comprehensive insurance policy, not only for the client’s sake, but for the contractor as well, should the need to file a claim arise. In some situations, a mistake can occur during the construction process, an accident can take place, or a product can prove faulty and fail. Any one of these can cause major damage to a client’s property resulting in expensive repairs. A comprehensive policy can provide compensation for such events. Let’s say a homeowner hires an unlicensed contractor – side job Bob – and a guy he brought on the jobsite to help gets injured. Guess who is liable? Not side job Bob, the property owner is at risk of paying out for damages. A lawsuit can be filed against the property owner as well as a claim filed against the property owner’s insurance. Had a licensed contractor with the correct insurance been hired, the accident would be covered by the insurance policy. Here is another example of how a licensed contractor’s insurance can help absorb the cost. Let’s say a subcontractor or the contractor’s helper installed some cabinets on the walls and didn’t use sufficient fasteners. Months later the cabinets, filled with plates, cooking ware, etc., come loose and fall off the wall damaging the cabinets, the countertops, and the floor. The client can file a claim against the contractor’s insurance to help recoup some of the costs. The contractor would be liable for the faulty craftsmanship and must provide the labor. Insurance is in place for when the need arises. It’s simply good business to hire a contractor who can provide proof of liability coverage.

On a final note, in addition to saving money by hiring the right contractor, you save time and hassle from dealing with any of the above unfortunate events.

Peace of mind is worth every cent.

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