Besides the quality of work, what separates great contractors from so-so contractors is attitude. The difference between like and love is referrals.

Surrounded by contractors – who will I refer?

Paint contractor – I told him I wanted the entire house painted except for the ceilings. He gave me a flat-rate quote, including paint. He didn’t have a checklist and he didn’t ask me any questions, except for how many colors I wanted. I told him he had two weeks to get the job done because I had bathroom contractors lined up for the following week and hardwood floor installation after that.

Results:

• He took a week to prep.
• He gets to the job site every day around 2:00 p.m. and paints until around 6:00 p.m.
• He rinses painting equipment in my kitchen sink and leaves paint all over the sink and counter. He also rinses equipment on the ground cover in my front yard, leaving paint everywhere.
• In the middle of the job, he left to go work on another house for three days.
• When I saw that he hadn’t sprayed the closets, I asked about it. His response? “You never said anything about painting closets.” Frustrated, I replied, “I told you I wanted the entire house painted.” This is why checklists are a good thing. Communication stunk.
• He’s taken over three weeks and the job is still not done. Now he and the bathroom contractors are bumping into each other. The walls are sprayed, but the touch-up work is not finished.
• He accidentally over-sprayed onto the ceilings in every room.
• He painted over the over-sprayed spots with white satin (my ceiling finish is flat) and the whites don’t match at all. So now, we’re looking at having to paint entire ceilings.
• He asked for an additional $300 because according to him, “At this rate, I’m only making $17 per hour,” and I said, “If you didn’t over-spray and you worked faster, you’d be making $40 per hour.”

Will I refer him? No. No. No. 

General contractor – I gave him a checklist of about twenty items I wanted fixed, changed, taken down or added.

• I wanted three posts that housed outdoor lighting removed and electrical cut. He took the posts out and killed the electrical, but left long electrical cords sticking out of the ground. I felt it was sloppy work because he didn’t cut the wires to ground level.
• He keeps telling me that he’s going to make a cover for my fuse box. But he’s already been paid through escrow for this little job and hasn’t fixed the problem yet. It’s been over a month.
• He charged $25 per light fixture to hang exterior lights (on existing boxes) on both sides of my driveway. Since I plan on changing all of my light fixtures inside and out, as well as adding fans, I learned how to do it myself.

Will I refer him? Yes, because he is available for lots of little odd jobs, but I’ll tell my friend that sometimes he doesn’t complete work and that you have to stay on him. I suppose that for the most part, he was a decent contractor.

Bathroom contractors – they asked detailed questions about every aspect of the job and advised me on different solutions. They gave me a flat rate and wrote down all the work that would be done for that rate.

• They show up early in the morning and work hard until 5:00 or 6:00 p.m. every day.
• They call every afternoon to give me updates and their plans for the next day.
• They used their own backer board because they had extra in their trailer at no extra charge.
• They used their own cement at no charge.
• When they tore out the tub, there was a big hole in the sub floor and a missing or damaged joist. They used their own plywood that they had in a shed to fix the sub floor and then fixed the joist for free. One of the contractors had to lie in the crawl space in mud (from the dripping tub when they moved the pipes) and work on his back and they didn’t charge me for labor or materials.
• One of the contractors is an electrical contractor whose advice was badly needed one day. I was disconnecting a light fixture (from a soffit in the family room addition) in order to attach my new fixture. Upon pulling the fixture from the wall, I noticed that the wire looked like an extension cord instead of electrical wires. He said he’d climb through the attic, check it out and fix the wiring if he could get to it. The next day, when I walked into the house, the new light was attached, again at no charge.
• They went shopping with me to help with the vanity dimensions and tile ideas.

The bathroom is still under construction. All that’s left is the tile grout and shower door installation. I took them to lunch yesterday and told them how much I appreciated their hard work and thanked them for the “no charge” work. Their response? “It all comes back full circle.”

Will I refer them? Absolutely. In a heartbeat. No question about it.

Are you getting enough referrals?

My friend, however, who is also the realtor who sold me the house, made a smart suggestion to seal a hallway closet that abutted the bathroom and use that space for bathroom shelving. This made perfect sense because (a) there were too many doors in the hallway, making the space look smaller and (b) I desperately lacked storage in the bathroom.

Why didn’t my contractor come up with the brilliant idea? Perhaps it’s what we call tunnel vision. You go into the project by first listening to what the customer wants, you tell them whether or not it’s doable and then you create their vision. But if you looked around, you might get ideas that will greatly enhance the space and make it more functional for the homeowner.

Now, I know there are hoards of contractors who do make suggestions. But for those of you who don’t, it would not be considered an insult if you did. Most homeowners don’t have vision – they can’t see beyond the walls. I know, I’m one of them. If you can make my life easier by making the space in my home more functional, then I’m all ears.

So, here’s my suggestion to build more value and earn more money per project. Let’s say you’re working on a job and you pass by a staircase with unused, wasted space underneath (and the people have a lot of clutter). Suggest how the homeowner could utilize that space more efficiently with built-in storage. Bam – more money for you. Or you’re working on a job unrelated to the kitchen but notice that the kitchen is dark and small. Suggest installing skylights and removing a section of the wall to form a window through an adjoining room – wham-O, more $$.

Trust me, I’m a homeowner who needs you. These suggestions will pay off. Don’t just go into a job for the sake of the job. Go in for the client and help make their home a better place to live.

Low bidding is not without its pitfalls, however, and it is vital that no contractor bid lower than his or her means allow, especially within the realm of remodeling.

Pitfall #1: Losing Potential

Low bidding can easily lead to taking a loss. A contractor, in the oft mad drive for work, might look at a job — quickly measuring up the job and the homeowner — and feel confident enough to bid lower than normal for the work. The general gamble here is that the job will run smoothly and according to plan, despite experience of the opposite. We often counsel homeowners to be prepared for just about anything when “opening up” their home. In this case, the same advice is useful for remodelers seeking to outbid the next guy — simply having work does not necessarily spell success.

Pitfall #2: Labor and Manpower

Labor is another key issue. You, the contractor, are responsible for paying your employees, whether the job is over budget or not. Low bidding combined with unforeseen circumstances can spell disaster for your job, finances, reputation, and that all-important relationship with employees. Furthermore, should circumstances send the job behind schedule, you won’t have the resource to recruit the manpower to get it done in a reasonable amount of time.

Pitfall #3: Reputation

Reputation. Low bidding is often looked sternly upon by other contractors and trades within the community. It may seem like the short road to ongoing work, but in the long run it can be more damaging than helpful. In tough economic times all contractors are forced to lower their bids, there is no denying that; we all have mouths to feed, and that includes homeowners. But on top of all the other risks involved in low bidding, which can also hurt your reputation, tarnishing the company name is not one to ignore.

Pitfall #4: The Gamble

The basic summation of the pitfalls of low bidding is that it is a gamble, and a risky one. I imagine there are several contractors throughout the construction world for whom this practice has been successful, but I would venture that these are few and far between. I personally have seen low bidding become the downfall of two separate contractors, one to the tune of millions of dollars in losses and owed debts.

Again, at this time we all have to sacrifice, homeowner and contractor alike, but be wary of the pitfalls of low bidding. This, unfortunately, is no 4-bit video game.

The site covers the two important stimulus components for homebuilders and owners: the Existing Home Retrofit Tax Credit and The Wind, Solar, Geothermal and Fuel Cell Tax Credit. The credits are broken into categories (Windows and Doors, Insulation, etc.) with explanations for each category, including how a project qualifies for its corresponding tax credit. A PDF is also available for download and printing.

Online referral services serve a number of purposes. For the contractor, it is essentially a new form of advertising — contractors typically pay to be included on the list. For the homeowner, online services help expedite the contractor-finding process by doing a lot of the legwork. That includes such laborious tasks as:

• License verification
• Background checks
• Referral verification (the service calls references themselves)
• Insurance verification

Many also provide feedback from previous customers and make getting free estimates from these contractors a simple form-filling process.

Add to that the fact that many services are free, and the appeal is not hard to realize. Still, as Remodeling Guy points out, that doesn’t necessarily make online referral services a foolproof option. While the verification services provided are useful, and probably effective in general, it would not be too difficult for a dishonest contractor to get around these obstacles.

That is why the online referral service should not free the homeowner from all research obligations. It is important to remember that many of these services make money off the contractors — a good reason to let some mediocrity slip through the cracks. Now, there are plenty of online services out there; the rise of the online referral service will inevitably spawn even more hungry entrepreneurs to the cause. Therefore, it becomes necessary to effectively research the researcher, for homeowners to spend a few hours looking into the referral services themselves.

So while online referral services are an ever more effective way to reach homeowners and potentially gain some serious business, they are unlikely to be as easy for contractors as paying a fee and reaping the benefits. Well-researched homeowners will still judge by personality, although being on their list (narrowed down by the online service) will certainly help the cause.

In addition, when it comes to researching the same advice applies to contractors looking to advertise within this rising trend. It would be unwise to place your bets with a service that has had a negative reaction around the web.

• 31% visit a search engine, searching without a specific brand or business in mind
• 30% look up a business in print in the phone book
• 19% use Internet directories
• 11% look at local search sites like Google Maps (driving directions)
• 3% get their information from a newspaper or magazine

Sure the phone book still ranks second among avenues for prospective customers, but taken in total barely one-third actually use print media to find businesses anymore. And you can feel confident that these numbers will continue to decrease. The phone book of the future will be uploaded, not left on your doorstep.

Source: Small Business Trends

1. Advertisements. If the money is there, then advertisements are an excellent way to get the word out, but recessions are more about intimacy and word of mouth. Many homeowners want to remodel but are tentative about spending the money. In such cases, a handshake and some expert conversation are more likely to yield trust and a contract than the flash and flare of an advert. Start with recent or other past clients. Maintaining a relationship with one client often extends to others by association. Then, when cutting down your advertising budget, test out which outlets work best for you before deciding what to slash off the budget.
2. That Extra Truck or Trailer. There’s no need to go out and pawn tools, but that other heavy duty truck you bought during the boom that costs $500 per month could probably go. A contractor needs his truck, but two? The same goes for trailers and other superfluous equipment. It’s all part of trimming the fat and balancing a budget.
3. Office Space. It’s probably getting hard on a lot of contractors to pay for separate office space. As much as we all hate to see empty buildings lining city streets, is an office really necessary for your company? Perhaps it is, but many contractors could just as easily handle paperwork at home, especially since most meetings are held on job sites anyway.
4. The Warehouse. If you can do without an office to answer phones, can you go without a storage facility? If you (or your employees) have some extra time, it may be worthwhile to re-inventory all the extra material from jobs past, old tools, equipment, etc. that is collecting dust. You may even find a way to eliminate a costly bill, or at least downsize to a smaller unit. If your storage is your backyard, then consider it yard work.
5. Extra Help. It is hard to lay off employees, especially those that have been long-standing and loyal. I personally have been blessed in the past by contractors who did anything they could to keep me off the unemployment rolls. Still, even without laying anyone off, there are things many contractors can do without hiring anybody new. Take, for instance, answering your own phone or doing more of the leg- and paperwork. It’s not always easy, but if it were they wouldn’t call these hard times.