How low can you go, but more importantly why

A common used technique that just doesn’t work

We all appreciate a good deal and some of us will go to the end of the earth trying to find that once in a lifetime purchase. Now it is a totally different topic wondering how much time spent is to much time and what your time is actually worth. However, when making any big purchase you need to steer far away from this instinctual behavior. It may be the easiest way to differentiate different quotes but trust me here it is not a good way to decide who you are going to use to complete the project. The best way to explain this is with a simple analogy. Most of us love a good meal and we will use surf and turf here since it is an American favorite. You cant make up where to have your birthday dinner party and are shopping around at several different restaurants to pick the best one. Low and behold you find a place where you can buy your favorite meal for only $6.99. What a deal! Would you feel comfortable having your family and friends dine at a place like this when everyone else was priced at $20+ per plate?

It shouldn’t be a race to the bottom

Use the same logic outlined above when purchasing a new roof or similar project. When buying a new house or used card we have all been conditioned to follow this train of thought, it is time to apply it to the construction industry as well. If an estimate comes in way lower then the rest it is usually for one of a several reasons. First, they may be using inferior materials or cutting corners wherever possible. If you plan on keeping your property for any length of time the short term savings may not be worth the long term potential for major issues. Something as common as a little roof leak can cause wood rotting, structural issues, and mold growth all of which can be huge expenses to fix. Secondly, you may be dealing with amateurs that either don’t have much experience bidding jobs or are so desperate for work they will do anything. In this instance you are likely to be used for a training ground so that these newbies can hone their craft and pray for a good outcome. That or they may need to use the money from your down payment to purchase materials for another project they are building. It is typically a bad sign when they ask for a large amount of money up front and wont tell you when they will be able to start the work. Lastly, it is a common trick of the trade to throw out a low ball estimate to win the job and then try to up charge once firmly into the demolition. Roofing contractors often figure it is a lot easier to negotiate for more money from the customers when their roof is laying in the front yard.

Making proper comparisons

Some of the big differences you may notice

You want to make sure to focus on important aspects that often get overlooked. One of such things are company reviews. Do they have a good rating at the BBB? Are they listed on a site such as Angie’s List and do people have good things to say about them? Can they provide any personal references of local customers that are satisfied with the work completed? Some times it makes sense to pay a little bit more for work that you know is going to be done quickly and professionally. Make sure that the person you are going to hire is fully licensed and insured. Check the states website, such as this one for the state of Michigan, to make sure they do not have any outstanding violations. Most cities now require the contractor to provide all of this information before pulling a permit to protect the consumer so absolutely never agree to do this yourself for anyone. If they cant pull a permit themselves there is a reason for it and it isn’t good! Many contractors can no longer afford insurance as it is quite expensive and instead carry fake policies. Before signing a contract ask for a copy of their insurance policy and call the provider yourself to ensure it isn’t fraudulent. All it takes is one accident to occur on your property for you to lose everything to some low life that lied to you. It is not worth the risk and many people out there are just waiting to prey on unsuspecting victims in this manner.

Be careful before handing over a penny

How much is to much for a down payment?

I cant say that you should never give a contractor any money up front but I can say that it is the best way to protect yourself. Smaller companies or independent contractors wont strip a shingle off your roof without 50% or more down. Bigger companies are capable of paying for their own materials upfront and want to make sure you are completely satisfied before getting paid. This alone is worth a substantial amount as it gives you peace of mind that the work will be done in a timely fashion and up to your personal standards. It allows for you to keep your money in investments or savings accounts or stashed under the bed. Either way it is a much better feeling to have a little control of the project. There is nothing worse then handing several thousands dollars over to a stranger and then to have to constantly call them trying to figure out where they are and when they are going to start working.

Borrowing the money sometimes makes more sense

It is all about the financial options

Again, this is not the deciding factor here but should be weighted heavily. Financing can be great for a number of reasons but that all depends on personal circumstances. When financing a new roof in Michigan for instance the rates are so competitive that it makes the most sense to take advantage of these programs while they are available. Michigan roofing loans are also available unsecured which means that the lender does not even place a lien on your property. This is a huge benefit that is even more important than interest rate because god forbid you have a lien placed it can be very difficult to get it removed if there are any disputes. More importantly, lenders are very careful which contractors they conduct business with. They do a thorough background check and even perform a financial audit in order to make sure everything is above board. That means you can typically feel confident in the company you have hire if they are able to provide you with a loan for that home improvement project.

Paying for home improvement projects

Have you ever taken out a loan for something like a new roof?

  • Yes, and I would do it again if need be
  • No, I only pay cash for such purchases