PM asking me not to negotiate with vendors. How to respond?

Question

Hello, I've been working with a property manager for 6+ years now. The PM recently sent me a concerning email asking me not to negotiate with the vendors they bring on to provide estimates, and for me to trust that the prices these vendors provide will be the best. The email goes as far as to say that by negotiating with them, it creates a strain on their relationship (with the vendor) and may bring about concerns on the vendor's end that if other clients will also engage in negotiations.

For context, though I'm only speculating that it may have been this latest interaction that prompted the email - I received an estimate, decided to call the contractor, which I've done many times in the past with other estimates. When this particular contractor realized I didn't need anything fancy with the work, he proceeded to adjust his bid. I took that cue to see if there was some wiggle room. After 2-3 back and forths, the contractor and I agreed on a price. Before ending the call, I ask the contractor to text me the details; he said he would reach out to the PM instead. I, too reached out to the PM relaying my conversation w/ the contractor and the PM agreed to follow up. A day or two later I instead get the response detailed above.

Is this a "proper" response for a PM to send to a client? Asking me not to negotiate, wouldn't that go against my interests? And for a contractor to express his dismay to the PM about negotiating with a client (even though negotiating comes with the territory), wouldn't that be unprofessional? I understand PMs work to build a relationship with vendors (though in this case, I believe they've only worked on two jobs, so I think the relationship just started), but I always figured to avoid any conflicts of interest, any relationship (between PM and vendor) ends with "you do a great job and I'll bring you more clients"; any discussions about pricing, discounts, etc. should only be between client and contractor once the introduction is made by the PM, and any further involvement on the PM's end would simply be limited to passing contracts between parties for signature and making the initial and final payments on behalf of the client.

As you can imagine, with the years we've worked together I'm at a loss on how to respond; if I should at all or just leave it alone and see what comes about the next time a contractor needs to be hired for a repair. It's possible the PM was having a bad day and didn't realize the tone of the email when sending it

Thanks for taking to time to read. Any insight is greatly appreciated!

Nathan Gesner · Answer

I agree with Mike. If you want to spend time getting multiple bids and negotiating with contractors, cut the PM loose and do it yourself. I have spent years developing relationships with vendors I trust. I don't charge markups so my only incentive is to get the job done quickly, correctly, and for a price that makes my Landlord happy. If a Landlord calls my vendor three times to negotiate prices, it's costing my vendor money and they won't be happy. That reflects back on me and I have to work with that vendor for hundreds of other rentals and Landlords. Not good.If your vendor is charging you a portion for each job, then that may be the reason. I suspect it's because you're bothering the contractor and it's interfering with the business relationship.

Mike Dymski · Answer

Having both the owner and the PM manage the PM's contractors would be a mess. There are exceptions for large projects...or maybe unit turns when you have your own contractors and there is no resident coordination...but I can't imagine running a PM company and having hundreds or thousands of my clients managing my vendors. They are not having a bad day...they are running a business and managing their employees and subcontractors. There are pros and cons to 3rd party management and self-managing. One of the cons of using a PM is less control.

Joe S. · Answer

Property managers typically get 10% markup. Some do not charge mark up, because they feel like it would be a conflict of interest. It is my opinion they are in the minority. With that being said some property managers have vendors that are more competitive priced than you could find on your own so the 10% Should not be a problem in that setting. Some property managers are clueless about any sort of repair or construction and vendors have been known to take a advantage of that. Chances are if I had been in your case I probably would have negotiated a bit with the contractor/vendor as well. It is what it is…

Theresa Harris · Answer

I would say if you want something done and don't trust the PM, then do it yourself. That means arranging your own people to do it. Otherwise, give him (your PM) a clear scope of work and then trust him to get his people to do it for a fair price.

Ian Davidson · Answer

I dont understand why you have a manager if you are going to be calling vendors yourself. If you dont trust them why are you working with them? If they dont have your best interest in mind why are you working with them? As rude as it is for them to not have your best interest at heart they built relationships with vendors and here you are calling their vendors? Seems like a giant mess and a lot of drama

Eric James · Answer

Maybe this is an inevitable tradeoff with using a PM. Their loyalty isn't strictly to any individual landlord, it is spread across multiple landlords. That means getting a decent contractor prices for all their landlords, but not necessarily the lowest they could get for any individual landlord.

Nick Barber · Answer

you apologize for contacting their vendors that is how you respond. if you are spot checking and found they are ripping you off fire them. but you seem to be doing this a lot so just fire them and manage yourself.