Why is it so tough to find a good contractor?

Rick Ripma  0:00  

Branch NMLS number 33041 Rick Ripma's NMLS number 664589, equal housing lender, some restrictions apply

Unknown Speaker  0:14  

Welcome to Indy's Real Estate Guru, brought to you by Advisors Mortgage Group and Fix It Mortgage, our branch NMLS is 33041. Now here's your host, the hard working mortgage guy, Rick Ripma.

Rick Ripma  0:26  

Good afternoon, and I hope you're having a fantastic Saturday. One of the things I want to talk about today, I think it's just very interesting, why is it so tough to find a good contractor? I've remodeled some of my house; we're trying to do some more. And why is it so tough to find that good contractor. I've done some research on it. And to begin, contractors are not generally, this is what I've found, good business owners. Some are, but most of them are not. They're not good business owners, generally. And just because someone can bake doesn't mean they can run a bakery. And the same can be said about contractors. Just because someone can swing a hammer doesn't mean they can answer phone calls or show up on time, or return calls, or just, you know, have any follow up skills whatsoever. They may be great at doing the work, but they don't have the skills to do any follow up. They don't follow up; they don't get back with you. Secondly, contractors don't always have to be good. A lot of times, they just have to be quick or cheap, to meet certain needs. Real estate investors and homeowners are always looking for a good deal. And this means they don't typically call the best people for the job because they know there'll be too expensive, too big for small maintenance jobs, and they’ll be booked out three months. So -to get the best sometimes you've got to pay more, and you have to wait. But none of this means that you have to settle for a contractor that doesn't fit your needs. Given some time and research, you can figure out how to find a contractor that can be great, that can get the job done properly. You can be happy with it. Somebody that you can really, really appreciate. Despite what you've read, there are great contractors out there, but finding them and the ones that are best for you, can take a little time. Here are the best tips that I have to help find good contractors and narrow down that list. And I can tell you, it's extremely important, we did basically most of our downstairs last year. Redid the kitchen, after 30 years of the same kitchen that we had lived in the house. It probably was 40 or 50 years old. So, it needed it. I didn't do the work myself, but I didn't hire a general contractor.  I hired individual contractors. And I will tell you, I highly recommend that you find a general contractor.  A good solid general contractor. And that's kind of, you know, you can do it. This works both ways. And we actually had a very good contractor working on putting the kitchen in and all of that. It's just that they didn't manage the entire project. And I think that helps a lot to have somebody who actually knows what they're doing, and is doing it full time; managing the project. But how do you find a good contractor? Number one, be proactive, not reactive. Have you ever heard the old phrase, the best time to look for a job is when you don't need one? The same principle applies to contractors. If you're only looking for one when you need one, you're setting yourself up for problems from the start. Instead, be proactive, using a continually involved list of people that you can call for various problems, and continue to add people that list even when you don't need somebody at the moment. That can be extremely helpful. I can tell you that's what I've done, to a point.  I try to keep a list of people that I've used or people that I know customers have used. Friends have used. I try to keep track of that. So that I can always have somebody to do a lot of the small maintenance items. Like we have a great plumber because of a referral. We have a great HVAC company because of referral and those I've stayed with as long as I possibly can. The HVAC company I've probably been (for) 12,15 years and they're just very, very good. They suit my needs perfectly. They come to my area. They're quick, they call back. So, it's really simple. It's important to find somebody who fits those needs. Because for me, it's extremely important for me to call a customer back. If they call me, I need to call them back. If they email me, I need to email back. If I don't call somebody back, generally, within a few hours, there's something wrong. Sometimes I can't. And when I'm talking, I'm saying business hours. Sometimes I can't, like last November. I was sick, sick as a dog, I couldn't do it. I had to have my team do it. But I try to call everybody. If somebody calls me, I'm going to call them back. And I'm going to call people back as quickly as I possibly can. I set my team up the way that I did. And that is extremely important to me.  I'm trying to hire a company to do something. And it is somewhat frustrating for me, because they don't. They're not in a hurry to do anything. And I'm in a hurry to do everything.  I have a very high sense of urgency. So, it's really hard for me when I work with somebody like that. I know I have a high sense of urgency, so I have to slow down. But it does help to have somebody in the same timeframe. But to me, it's critical. If they won't get back with me, if they can't follow up, if they can't get back with me, that drives me crazy.

I’m proactive and I’ve honed a list for myself. And I've tried to add people based on referrals. Along with looking them up online, things like that. I always try to add good folks, I also talk to people I know, because I always need them, but I also need them as referrals for others, because I work with a lot of people who want to do things to their house. So that’s the first one, be proactive, not reactive. Get a list together, continually add to that list. As you find people who are good, or somebody refers you to somebody, that's good. You want to keep track of that, you want the list where you can get to it. Because if you don't keep the list, if you don't know where it is, then you can't easily get to those people. So that's very, very important. Number two, understanding price versus cost. And this is very dear to my heart. I went from being a price to a cost person. These two terms may sound the same, but they are there's a key difference when it comes to hiring anyone or making investments in your business. Price is the monetary amount paid when you purchase something. But cost is a long-term monetary amount paid over the life of the purchase or service of the product or service. For example, the price of a dishwasher, it might be $400. The price of dishwasher A might be $400. Dishwasher B might be $500. The first option was a lower price, but it requires an extra $20 per month in energy bills that the second option does not have. This is obvious; it's not really saving you anything in the long run. You see buying for costs rather than price is a subtle difference. But it can have a huge effect on your house, on the work that you're doing. The principle also applies to hiring a business- and it does apply for hiring a contractor. I have found it's probably one of the most important things. As you're looking at getting something done. And this is not just in the contractor. But let's say you're going to get you're going to get work; you're going to have a new kitchen put in and you have a sink a and sink B and sink a is a pretty traditional sink and you like it. And it's $500 and sink B is $2,000, but you love it. It's exactly what you wanted. Now, there was a time I would have done sink A, because I can live with that one. But now I have found it's not just the monetary cost, it matters how much you like it and it matters how much it means (to you). What I also have found is- an appraisers will appraise a house for a higher dollar amount when they like it; when it has higher dollar products in it. They can tell the difference between a $500 sink and a $2,000 sink, generally. And so, you may not get all of it, but you will definitely get more than you paid in enjoyment. If you buy the one that you really like, that you fall in love with, it's exactly what you want. So, it is extremely, in my opinion, important to not concentrate so much on price. But look at the true cost, not just that but the value of the product to you over time. And if you're going to, I mean, you think about for 500 bucks, you know, for me, in this case $500, to $1500 is another $1,000. But if it's in there 10 years, that's only what $100 a year. If it's in there 10 or 20 years it's only $50 a year. Is worth $50 a year for a lot more enjoyment. But to me, my choice is always that it is. And I found that to work out for most people. After the break, we're going to talk more about, why you can't hire or find a good contractor. 

Unknown Speaker  10:20  

You're listening to Indy's Real Estate Gurus brought to you by Advisors Mortgage Group and Fix It Mortgage. Now back to your host, the hard work and mortgage guy, Rick Ripma.

Rick Ripma  10:32  

Welcome back, and thank you for joining me, I appreciate it very much. We're talking about why it is so tough to find a good contractor. Number one, we said you need to be proactive, not reactive. So, you need to keep a list, you need to keep track of people who do work. So, when you need the work done, you're not rushing around trying to find somebody, you already have that list. The difference between price and cost; the price may be higher on one than the other, but the cost may actually be lower for the higher price. So, you want to look at that, that's important. Number three, we want to ask for referrals. And this is where I normally get, if I don't already have the contractor, most contractors I have I got from referrals and most people, you know, I always get referrals, if somebody says have a great plumber, they have a great HVAC, or they have a great contractor, they have a great electrician. I always like those referrals, because if somebody is happy with them, you know, and you know that person, if they're happy with them, you're probably going to be happy with the painters the same way. The best painters I've hired have always been referred to me. Sometimes, you know, I've hired painters were, I thought they were going to be good. And they just weren't because they weren't referred and they just weren't that good. Good ratings, but they weren't very good in reality on painting. Number three is, we were talking about ask for referrals. And so just ask anybody you know, if you're looking at somebody had their house painted ask those people, how do they like their painter, if they love their painter. If they said they were great, get a referral. If they didn't like their painter, then don't get the referral. You can look at their work too. And you can see how it is, see if it's somebody who knows what they're doing, they're good at what they're doing or if they're not. And so, you just want that referral sources are very good. You can also go online you can go to, like it's angie.com now or home something.com which is part of angie.com and then there's another one that they actually will help you with referrals based on the ratings that these people get from people who have used them, who are also on that system. And I have found that to be another good way to get to get work done. Sometimes though, you have to be careful. I found that when you ask for somebody to contact you, about 50% of them do, the rest of them just ignore you which is something that we kind of all have gotten used to with contractor. That kind of eliminate themselves, because they don't get back. Asking for one person to get back to you I've found to be very successful. Asking for four to eight of them to get back with you, you tend to get two to four people getting back with you, who then you can narrow it down, and the ones I've actually talked to and used have always been good, based off of Angie’s list with good ratings or with a can't remember-- the home something, and then there's another one I just found that I'm actually using somebody from there. I don't know how good they are yet but that is another place to get referrals, if you don't have somebody that had worked done. That is another place you can get(referrals).  I don't think it's as good as actually talking to somebody who you know who can recommend somebody, but it certainly is another spot to get it. The next one, once you get a reference, you can always you want to do your own research and I think it's one of the keys to get in a good contractor you're on reef research. So, you can Google them, you know, and you look on the internet you can check it you know you check them out. You can see you know what they've done you can see if you know any shady activity, you can see if there's any active disputes, you can see their profile and the Better Business Bureau. Although I'll tell you personally, I haven't found the Better Business Bureau to be that great. I actually was looking at a I think it was an insurance company. And the insurance company on the Better Business Bureau had an A plus rating from Better Business Bureau, but their rating from their customers was like one point under 1.75. So not very good. Right? So, it wasn't a good rating. Even through the Better Business. And the reason is because if you send in something to the Better Bureau and you say, this is what happened and the business answers that, then it eliminates it and they keep their A plus rating. So, I'm always very leery of the Better Business Bureau. But look at not just the rating, if you're looking at the Better Business Bureau, look at the rating by the customers to see what it actually is. So that you have a good idea. I think that helps.

I also had a customer who wanted to remodel their house. They had a contractor, and when they did a Google search, this contractor that wanted to come do the work, they found that they had been in the newspaper here in Indianapolis because of the scam they were pulling on people. So, it's very, very helpful to eliminate somebody. You may not find good about them but finding bad about them is just as helpful. Because you're going to eliminate a scammer or somebody with a lot of complaints because it doesn't work the way that you want it. You know, you meet with people, we tend to like them, and good scam artists can make us feel like, hey, this is a good person. In reality they may not be. So, we want to make sure that they are. Google is a great place to get that. You can check references. And this is something that is important. I'm always a little leery, although it has surprised me at times when somebody gives me a reference. And I call the reference and I talk to them and they give you a bad rating on this company. Because normally you would expect if somebody is going to give you a referral or a reference, they’re not going to talk bad. At least they may not talk great, but they're not going to talk bad about them. But if they tell you bad things, that's it. That's a good sign that you probably don't want to use that contractor. But I also have found people right. This goes for the last one. When you Google them, you look up the ratings on Google, you look up their ratings on other things.  I have found that those rating, many people will only write anything if they're mad. So, they'll give a bad review to somebody, some company. Sometimes though, they're unrealistic, or they don't understand the business. They don't understand what really goes on. So, it's not like this person did a poor job. And here's why they did a poor job. And here's what my problem was.  Well, when I marked on the paint, it wouldn't wash off. So, it's their fault. Well, we all know that depends on the type of paint used, they might have picked the wrong paint, you know that you can't blame that on the contractor. However, if they say they didn't trim at all, or they said they would fix the drywall, they did no drywall fix. That's telling you, that's probably not somebody you want you want to use. You want to read.... I find that reading them(reviews) is very helpful. But I also find that you have to be careful because a lot of people will write things that aren't 100% true. And a lot of people don't actually understand. We think as customers we know, it's kind of like to me, we think as a sports fan, or say a basketball fan, that we know more than the coach knows, and we know more than the rest. No. And we know more than the players know because we tell them what to do. We yell in the stands.......run the ball, or whatever it is, or that was a foul. And the reality is we don't and it's the same way here. We don't know as much as most contractors. If you get 100% bad reviews or 90% bad reviews, I would not look at them. But you could just get a few bad reviews. I disregard those bad reviews because they're probably not accurate. But it's still valuable to check it. And again, you can do that on Google. You can check it on angie.com, on Yelp. You can look at all those areas to get reviews. Another piece is you want to ask questions. You want to ask questions to the contractor. So, references and recommendations are great. You got to have those so you can find the right contractors, but they aren't specific to you. You need to know that they're right for you. So, asking the right questions that are tailored to your needs is a great way to find the right contractor for you. This pre scanning process will help you weed out what ones that you don't like early on, and here are some examples of what you can use. So, one How long have you been in this line of work? Obviously, that's a good one. It you want to get an idea of how much experience they have. Maybe it could be somebody who says, well, I've been doing this myself for 30 years on my own home. And you know, I’m a woodworker and I worked at a factory doing the maintenance. Or it could be somebody who's been doing it for a long time. It doesn't mean that somebody with not a lot of experience, can't do the job. But normally you want somebody with a lot of experience or good solid experience that can do the job. You also want to ask,

what skills would you would you say you are the best at so what is it that you do the best? And do you like bigger remodel jobs or small repair jobs? So, what do you like doing the best? So, let's say you're talking to a painter and you say, well, what do you like doing the best? They say, well, I like rolling the wall. That's what I really like to do. Okay, great. But maybe what you have is a lot of trim work. So, you need to find out, how about trim? Are you good at trim, can you do the trim work? Can you repair drywall? Another painter I talked to- I told him I needed the drywall corrected. I wanted all this stuff fixed. I wanted everything done. And when they got completed, they didn't fix any of the drywall. So we had to have them fix all that afterwards, and repaint, do all that extra time and all that because they didn't fix drywall. So you just want to ask them the question and then if you've asked them the question, they don't do it, you can always go back, it’s lot easy to go back and say- Hey, you didn't do this. You told me you would. And they generally will take care of it. Also, don't ever pay them until they're done with the job, at least all the money. And so again, what skills would you say you're best at and do you like bigger remodeling jobs or small repair jobs. What job tasks do you hate doing? This is important, it will give you an idea of what they don't like doing. But they could say something like, well you know, I don't like to trim. But I have a guy - he's a trim man. And that's what he does. And he's a great trim man so I don't have to trim. Because there's things in my job I don't like to do. And what I've done is I've hired people who do a good job at that, because I'm not good at it, because I don't like doing it. So, it does make it worthwhile. If you just ask the right questions. In what city do you typically work. So generally, you're going to know this, but you want to make sure they're working in the right area. So that's important. How many employees work for you, or work in your company, if you're not talking to the boss. So that's important, too. How many people are there? You know, how big is it? That gives you an idea of the company, because you might have to give some money up front, you might not. A bigger company tends not to. But if you have to give some money up front, you want to make sure that it's not going to be walking away and you never get your money back. And they don't do any work. And how busy are you? That can be a negative and a positive you want them busy, but you want them to come, you know, be able to get to your house in a timely fashion. Just depends on what your timeframe is. But don't I it's just a bad thing. It's sometimes you have to but to sell to hire an inferior contractor to get it done quickly. Do you pull permits? Or would I need to do that? It helps if you need permits, you want them to be able to pull the permits, you can do it but you really want the permits. You don't want somebody says oh, you know what we don't you know, yeah, let's not worry about permits, if you need them, you need to get the permits. If I were to hire you, that's another great question. When could you start knocking out my TAs? Again, you want to know an accurate number or day when they're going to start. And you know, not that it might not move a little bit. It's one of the things that drives you crazy about contractors, they say, oh, I'm going to be there tomorrow and then they don't show up and they don't call and they don't tell you and you realize they were busy. They're never going to show up that day. They just tell you that because they don't want to tell you how long it's actually going to be. You want to know how long it's actually going to be so you can make the right hiring decision. What payment schedule do you prefer, when will you want the final payment. Very important. That a final payment is not made to thill work is done, you've inspected it and you are happy with it. I would never suggest paying them up front for everything. I pay as little up front and most of the time I find most contractors are okay waiting until the end. Not all of them. Some of them needed upfront, that's okay too, but just don't give them everything because you want to keep them coming back. It's really hard sometimes to get these guys back if they if they got all their money.

Alright, number seven is the 6am Home Depot trick. Go to Home Depot at 6am and meet the contractors that are there. These are the contractors who get up early and get their supplies before heading over to job sites. This is a strong indication that they know what they are doing and are not going to take advantage of you. Although this is no silver bullet. It can give you an idea of a contractor who takes their work seriously and get started early in the day. I know 6:00 am is early to get to Home Depot but is a great way to do it. This will also be a good time for you to talk, to ask the store employees who they would recommend. And see if they have any additional unique insights to the quality materials the contractors use. They're going to know a lot about the contractor, because those guys are in there every day. And then you want to just make sure that you’re comfortable with whoever you hire. It makes a big difference. And it's really important that you’re comfortable and that you like them, you can talk with them, because you're going to be working with them through this. Now I want to move on to why you'll never find a good contractor. I know that sounds kind of negative; it's not my normal. But there's some basic reasons. Number one is because your expectations are too high; you're expecting your contractor to be perfect at everything to tick every box. And that's just not possible. But that's also why it's important to have more than one on your list so that you can always have someone for all your needs. So .... nobody does everything well. So, you want to find what they do well. That's what you want to use them for. And a lot of us do. We have way too high of expectations. We think they're going to get there tomorrow; we think they're going to get done right away. And we think they're going to do perfect work. And that's just not the case. The key is they do very good work, and they'll work with you to fix anything that needs to. Number two, you always take the lowest bid. I would say that's a critical error. Taking the lowest bid is not the best thing. I remember somebody said that you never negotiate a service, you negotiate a product. So, if you have a service being done, if you negotiate it, they’re just going to cut what they do. So, if you can't afford it, just don't do it with that contractor. But you want to find the right contractor if they're more expensive. It's not all about price, in fact, many times the lower price and get worse service and that's not what you want. So, try not to do that just do the lowest price doesn't mean the lowest price won't be the best, but it's very likely it isn't. You don't understand over overhead quotes, the majority of good contractors will never give an itemized quote, especially because the vast majority of people don't understand business basics, such as overhead expense. Also, there is a massive falsehood that says a fair contractor markup is 15 to 20%. That's not true. Every contractor inevitably up under bids one part of the project and over bids on another. There are just too many unknowns and variables to account for when bidding. The result and the entire project getting under bid and the contractor is guaranteed to lose money. You don't want that you want your contractor he needs to make money you want to make sure you pay a fair price. You know, fair and that they’re being treated fairly. I believe that and I want a good contractor and if they come back, when you're remodeling doing things like that there's always going to be issues that they didn't foresee and they're going to cost you more money. Your goals don't align; if your goals don't align with your contractor. Not a good fit. I hope you enjoyed this today. If you have any questions on mortgages, you want to talk to me. You know, you have any contractors you want to recommend or you need a recommendation. You can go to my website HardWorkingMortgageGuy.com That's HardWorkingMortgageGuy.com And you can follow up with me there. My phone numbers, my email, or you can contact me direct from the website. I'll do my best to get back with you in a timely fashion. I appreciate you joining me. I hope you have a great weekend.