Dealing With Contractors: The Myths and Reality

[Jim Y.]

There are countless stories and stereotypes about contractors failing deadlines, blowing out budgets, screwing clients, and being generally inept. Yet there are also many investors, small and giant, who have repeated success with contractors they entrust their ventures with. Surely there must be some secret magic sauce? Well, there is no magic, but there are solid and reliable fundamentals which bring success.

I started my career in commercial construction in 2005. Over that time, I have seen many multi-million dollar projects which failed, but more importantly, I have seen many succeed. The causes of failure were legion, but the causes of success were few and always the same. By following these reliable fundamentals, I have ran every one of my projects to success despite, at times, enormous obstacles. 

By stepping back to impartiality and understanding both the client's and contractor's mindset, you too can have repeat success in dealing with contractors. Please read on thoroughly.

First, I will bring it down to the level of smaller residential scope. This pertains to single family home structures, rehab remodels, specialized trades like electricians or HVAC, and 24 hour handyman. At this smaller scope, the contractor approaches a project without guarantee, yet their reputation, license, and bond on the line. The contractor has a focus solely on the project agreed to with the client, and ignores all other building-related issues. The contractor's goal is to complete the contracted task, and only that task, and get paid. This is the epicenter of the majority of dissatisfied clients and burned bridges. 

For example: homeowner/investor hires a plumber to replace a water heater, during peak construction season, then wishes to negotiate a lower price. The plumber will change the water heater, but will not investigate the home's plumbing system outside the water heater. In six months, the water pressure falls dramatically, due to sediment from old galvanized pipes plugging inlet port of new water heater. The client is upset because they feel that the plumber, as a professional, should have known this would be a possibility, and warned them, while the plumber feels they have done exactly what they were hired to do. 

This stalemate keeps repeating itself because neither party had true incentive to see past the immediate objective. The homeowner/investor wants a service as cheap as possible, at the same time as the contractor wants to accomplish the service as quickly and efficiently as possible. Many clients think that a contractor can become wildly successful by elevating their service, while many seasoned contractors know from experience that trying to up-sell their service is mostly a waste of time. There are those few who transcend from craftsmen to artisans. They, however, are booked out years in advance for premiums, and do not advertise.

Second, I'll say a bit about my world, that is, the large commercial side of construction. At this scope, there is often several years' of prior planning before any construction begins. The investment and entities involved is much greater. The governmental factor is ever-present. Therefore, the effects of failure are much more permanent.

So! What can you do, as an investor, a homeowner, a client of a contractor  - to ensure success? I would like to share my answers with you. In no particular order:

Rule #1 Verify.

Following this first step will eliminate, right from the start, the vast majority of the bad and unprofessional contractors.

A professional contractor is a professional in EVERY aspect of their business. So, you must verify. When you are shopping contractors, give each one or two simple tasks. For example, arrange a meeting onsite, or a phone call, at a very specific time. You could ask the contractor to email you a document or product description, also at a very specific time. Always ask, "Will this time work for you?" or "When can you make this work?" This places the duty to perform on the contractor, as they give you a time suitable to them. 

A good contractor will be timely or a bit early. The bad contractor will be late (even 3 minutes), and will always have an excuse. But, the logic of verifying here is that the contractor had chosen the time. You can adapt other methods to verify the contractor's professionalism.

Rule #2 Know exactly what you want.

Good contractors love details. They love detailed instructions even more. Many of my projects will have several 4 inch binders full of specs, and a process to request additional information.

Take the time to comb through every possible detail of your project and write it down, then do it again the next day. If you have a large project, have another trusted individual do the same for you and compare. Formulate contingencies. A good contractor will never ask you a question to which you have't already given them the answer to. By documenting to your contractor in clear, sharp detail your desires, they will be able to make field decisions on the fly without disrupting progress. They will be able to anticipate conflicts, and offer their professional solutions to those conflicts. Most of the time this happens in real time and without impact on budget.

In other words: If you aren't 100% sure of exactly what you want, how can your contractor know what you want?

Rule #3 Reciprocate.

A solid client/contractor relationship is a two way street. Give your contractor blunt, honest feedback if asked. If you see your project going sideways, jump on it right then. A good contractor is never insulted when a client brings up a flaw or deviation from plan. A good contractor openly welcomes constructive criticism because it is a fuel for improvement. PAY ON TIME: you may grow to fully trust your contractor, but your contractor may not grow to trust you.

These are the three biggest fundamentals which have helped me establish trust and ongoing relationships across multiple projects. This is why, despite construction industry's notorious swings, I have been able to have a stable career to invest in two rentals, and working on more. I'm working on reversing my role in the client/contractor role in the near future.

I hope this will be of use to you guys.