Real Estate

Owner provided materials / labor not as cheap as you think

Every remodel project has a budget, and as a consumer, you need to manage that budget. One way to manage your budget is to cut costs and therefore save money. A thought could be; If I provide some of the materials, the contractor will not make money from them and I can save money, right? INCORRECT!

Yes, there are expenses that a contractor has that are reflected in the marking of materials. Selecting and collecting materials is one and delivering them to the workplace is another. There are many other reasons for markup, which I cover in detail in a previous article titled Benefits and Overhead.

Let’s look at an example where you, the owner, provide the plumbing fixtures for a project. You went to the local home improvement store and bought the toilet and delivered it to the workplace after work Tuesday night so it would be there for the plumber early Wednesday morning. Did you also remember to pick up the wax ring, seat, toilet bolts, lids and caulk, supply line, and shutoff valve?

The fiberglass tub unit you came back through and loaded into the back of your friend’s pickup truck at 8:30 last night has a chip on it. Who is going to return it and have it here ready to be installed after lunch? The list can go on and on.

Those Saturday morning home improvement programs do poor customer service, which makes it seem too easy, because they omit critical parts of the equation. A quality contractor spends a lot of time educating himself on the types of materials and their quality, as well as the suppliers that offer the best price and service.

Today’s builders and remodelers are both real managers and tradesmen. They make sales calls, calculate estimates, design projects, select materials, coordinate, schedule and accept delivery of hundreds of items, and manage up to 30 subcontractors during the home remodeling or construction process.

An alternative solution to save money on your project could be to work for the contractor completing various tasks such as sweeping and cleaning the job site every night or moving material from one location to another in exchange for a monetary discount. But at the same time, a contractor could resist such a situation because of insurance coverage. Suppose you are sweeping the floor, you step on a nail and you cannot go to work, who will pay for lost work time and doctor bills? If you are not an employee of the contractor, you will not be covered.

Another situation that scares contractors is when an owner wants you to use a relative or friend to do some of the work. There are a couple of problems with this scenario, one of which is described above. A real life example is that your friend comes in at night and puts 3 plugs and a switch. Several months later, he cuts himself off and starts a fire, his insurance company goes after the original contractor only to find that he didn’t do the job, his friend did, and he’s uninsured. You are now responsible for the damage. You don’t have the money to rebuild part of the house, now your mortgage company is getting involved, do you see where this is going?

The simplest solution is to go to work and do what you do best, to earn the money to pay the contractor for what he does best.

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