Everyone loves a bargain.  I always try to get the best price I can.  But I’ve found that sometimes it costs more to pay less.  Clothes at Wal Mart usually won’t last as long as the ones you buy from LL Bean.

Money magazine had a recent article about how to haggle with a contractor.  I talked about the pitfalls of getting 3 bids in a previous post.  In this post I’ll discuss the idea of offering incentives.

The Money article suggests 3 strategies.  The first has some advantages.  The second is a bad idea & the third might save you some money.

Paying the subcontractors directly:

You may want to ask about this, but not because of any cost savings.  The theory is that you’ll save money because the contractor won’t add his markup on to what the subcontractors charge.  however, some contractors will ask the subs to add on a percentage and kick it back to the contractor.  I know that for some clients this seems to be just wrong.  But you will likely save a little money with this arrangement.  The contractor needs to make a profit and if he has to handle the payments to the subs he will likely charge more than if he lets you pay the directly and asks for percentage from them.

If your contractor will allow you to pay the subs directly you may want to consider it for a different reason.  If you pay the sub directly they will receive their money sooner & as a result may be more diligent and eager to do quality work.  If you do pay the subs directly be sure to ask the contractor how many jobs they’ve done for him.  If he can’t vouch for them, screen them the same as you do the contractor–ask for references.

Ask the contractor to negotiate a lower price from his subs:

When I worked as a contractor and people asked for a lower price I wanted to reply, “What part of the project to you want me to leave out?”  In a construction project there are countless ways to cut corners.  Just tune in to the popular Holmes on Homes show to witness some of the nightmare tales of shoddy work and the problems it can cause.

You can ask the contractor if there are less expensive materials.  For example, you can buy $150 kitchen faucets and $400 kitchen faucets.  Ask questions to find out if the price is based on better quality or merely a trendy look.  It’s a good idea to ask your contractor about the specifics of the products and methods he plans to use.  If you’re dealing with a knowledgeable professional you should be able to determine the best value for your project.

Be flexible about timing:

Exterior work is often cheaper during the fall.  You might get a better price on interior work in July and August.  But if your contractor does both interior & exterior work you might offer to let him stretch out your project and work your job in between the lag time between other jobs.  The danger with this offer is that the cost savings might not be worth the hassle of living in a construction zone for an extended period.

In the end, it’s often worth the money to pay for a job done right and finished on time.