What are some good negotiation strategies you have experienced when dealing with potential clients?
Do you have any advice for homeowners during the negotiation phase of a project?
This is a crutial part of the process, more likely the part where you don’t want to make the lets get the cheaper guy sort of mistake quite simply because number one this is your home and a large investment and because you really would get what you paid for.
You should always get at list 3 bids you do want to compare apples to apples beware of the company that offers a too low of a bid because if is to good to be truth it’s not really that good.
I wouldn’t recommend to get more than 3 because then you have to much information to digest, always ask for references and make sure you ask for a certificate of insurance that should proof that the contractor hold a current workers comp and a general liability policy
let the contractor that you finally decide to go with do his job if you did your home work choosing him more likely he know what’s he is doing.
Before you sign a contract make sure there is a part of that contract that mention that any change orders should be in writing and needs to be approved by you before it gets done and also be real careful with those change orders if there is any it should be really because you do want to change something or because something really unexpected happened and not because the contractor didn’t include the work on his original bid and now he is trying to make up for his mistakes with your money if he made a mistake on his bid you shouldn’t have to paid for it, but with that in mind there special situations where specially on renovations you can’t really know what you are going to run in to.
the contractor also should be the one pulling permits and scheduling inspections and the price of permits should be allocated on the bid proposal usually the fee it’s a percentage of the total of the project.
follow those guide lines and you should be fine
You can ask a contractor if this is their best price. You can say ‘we would like to hire you, but you’re a little out of our budget’
Some negotiating strategies for a homeowner are as follows.
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Not using/living in that area of the home during construction.
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Providing an empty work area prior to construction.
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Allowing longer working hours per day (earlier, later, weekends).
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Having materials, fixtures, tiles, appliances, paint colors selected prior to or as early as the start of the project.
When a homeowner is negotiating try presenting a logical arguement. Dont ask for something that makes no sense. My suggestion would be to offer to purchase a product like kitchen island for a kitchen remodeling in hopes of reducing the price. Ask for an itemize bill of why the amount is what it is.
You only get what you pay for.so cheep is not always the best option.
Lots of good answers already. The MOST important thing is to do a little research on ANY company/person you are contemplating hiring. Obviously, be SURE they are a licensed and insured business. Many claim to be, but actually do NOT have the proper credentials to do services they are bidding or expired licenses, etc. Usually if they have been in business for a period time, it is a good indication of their work. Also, that they will be around in the future if you ever need additional services.
Price negotiations are approached differently in different parts of the contracting industry and by different companies. In a sales situation with a commissioned sales professional, price is probably negotiable - the sales person needs only to sell the job at a certain price, and may start at a much higher number. You can usually tell if you’re talking to a commissioned sales person. The most effective negotiating technique is the direct one: “I can’t pay that much; it’s too expensive; that’s out of my budget.” The underlying assumption of that discussion is that you have not been offered the contractor’s best price, and that the sales person will find a way to offer you a special price.
If you’re dealing with an established or successful contractor, or the project is large or complex, you are much less likely to be able to negotiate a lower price, without giving up some aspect of the project. A good contractor will give you his or her best price for a given scope of work. If it’s too much money, you should once again be direct: “I can’t pay that much.” But now, you should expect the contractor to say, “I understand. Let’s talk about how to make the project smaller, or how to use more basic finishes…”
Sometimes a bit of cultural awareness is helpful - some homeowners and contractors belong to cultures in which a bit of price negotiation is part of every agreement, and some don’t have that mindset at all. If you’re not aware of the approach of the other person, and if you don’t include that awareness in your approach, you may miss an opportunity to work with a great homeowner or with a great contractor.
Some people say “You get what you pay for…” This is true, to a point. If you go out and hire one of those big national companies, you are getting what you pay for. A big national company that says they hire the right people (some of those are not the right people) and have lots of advertising. They are passing these costs on to you, and in reality you are paying a higher cost for hiring the bigger companies as they have more overhead.
You want to do your research and hire the right contractor. Many people like dealing with local people and people that come from referals. Some contractors give referal discounts, local discounts and sometimes offer sales and special offers to repeat customers.
Other ways to save cost on jobs is to help the contractor. By saying this, I do not mean go and swing a hammer but to go out and shop for materials. If the contractor has to go out to the store and go shopping with you, that is his time and will charge for it. If you can go to the store with a list supplied by the contractor and either have everything delivered or set up for a will call, this will save time and in return will save money. Also another way to save money is to not have the contractor move your belongings out of a room that they will be working in.
Some people want the job hours to be limited which in turn costs more, as the workers will need to come back in more trips. By not living at the home or extending the working hours in the home, the contractor can meet certain deadlines and finish different phases of construction in certain times rather than be against the clock to be finished by an exact time of day.