Mistakes contractors make

HelpBased on my observations of the remodeling industry during the last 20 years, here is my list of three common mistakes contractors make (feel free to add to this list):

1. A lack of well-thought-out company policies and systems. Remodeling is an enormously complicated endeavor. You’ve got all the complexities of building houses, plus the challenges of demolishing the existing structure, working on a one-of-a-kind project (as opposed to a tract of cookie-cutter homes), bringing every bit of the right material in the right quantity to the job site and doing all of that in an occupied house in a neighborhood where noise and dust and working hours are all big issues. So . . . the point is, unless a company has figured out in advance how to manage this intense, interwoven ballet of manpower and materials, things will be real messed up real soon. The best-run companies have at the helm a person whose attention to detail verges on annoying. Solution: Find a company that is run really well; ask references how much confusion and chaos there seemed to be during the job. Avoid companies that seem disorganized no matter how warm the owner or salesperson may seem.

2. Not having enough operating capital. The truth is, many general contractors come from the trade side of the industry, as former carpenters, for instance, and not from the business side (though the latter is happening more and more). It’s a sad situation when the cash flow is weak and a contractor is scrambling to make payroll and pay for materials. Solution: You’re better off hiring a contractor who’s been in business for some time, rather than a tradesman just starting out. If the contractor is a member of a peer networking group like Remodelers Advantage or a member of the National Association of the Remodeling Industry, the National Association of Home Builders or a local builder’s group, I believe that speaks well toward a company that takes care of business.

3. Taking on too many jobs and getting overcommitted. This is less likely to happen now than it did in the go-go times of easy refinancing and a hot market. But my experience is that remodeling contractors like people, like to make people happy and may say yes to overeager homeowners when it might be prudent to wait a few weeks or months to get started. The better the company, the longer people are willing to wait for their job to start. Solution: When calling references, ask about how many down days there were on each job, when nothing seemed be happening. One or two is fine, but many days of no activity on past jobs could indicate a contractor takes on more work than he can handle or chronically underestimates how long jobs will take. You can write penalties into the contract if the job drags on for no good reason. Conversely, I’ve heard of contracts that offer bonuses for getting the job done sooner. And if the contractor you want to use cannot start your job for a few months, that’s not necessarily a bad thing.

What would you add to this list?