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5 things contractors don't want you to know
5 Secrets Your Contractor Doesn’t Want You to Know
By: Oliver Marks
Published: July 5, 2012
You think of your contractor as an ally and partner — but he’s a primarily a businessman who may not reveal all. Here’s how to level the playing field.
1. He's desperate for your business
As tough as the economy has been overall, the construction industry has been in far worse shape. While the national unemployment rate has hovered around 8%, for construction workers it’s been a whopping 17% and higher.
What you should do: It doesn’t mean you should play hardball with your contractor on his price (because he might cut corners on the job if you do), but if you ask for an itemized bid, and explain that you're getting them from a few contractors, he's going to sharpen his pencil and give you his most competitive price.
2. He's going to farm out the work
As tough as the economy has been overall, the construction industry has been in far worse shape. While the national unemployment rate has hovered around 8%, for construction workers it’s been a whopping 17% and higher.
What you should do: It doesn’t mean you should play hardball with your contractor on his price (because he might cut corners on the job if you do), but if you ask for an itemized bid, and explain that you're getting them from a few contractors, he's going to sharpen his pencil and give you his most competitive price.
2. He's going to farm out the work
General contractors often don’t do the physical work themselves. They might have been carpenters or plumbers, but now that they run their own businesses, they’ve retired their tool belts.
Instead, their role is to sign clients, manage budgets, and schedule a cast of subcontractors. When he’s trying to win your business, a contractor can be pretty vague about how involved he’s going to be — and who will be running the job day-to-day.
What you should do: Inquire who will be in charge of the jobsite. Ask to meet the job foreman, preferably while he’s at work on a current jobsite. “Maybe he’s a chain smoker or doesn’t speak English or who knows what?” says Stockbridge, Mass., contractor Jay Rhind. “You want to make sure you feel comfortable with him.”
3. A big deposit is unnecessary -- and possibly illegal
When you sign a contract, you’re usually expected to pay a deposit. But that’s not for covering the contractor’s initial materials or set-up costs.
If his business is financially sound and he’s in good standing with his suppliers, he shouldn't need to pay for anything up front. In fact, many states limit a contractor’s advance. California maxes out deposits at 10% of the job cost, or $1,000 -- whichever is smaller.
What you should do: If your contractor is asking for, say, 25%-30% of a job that’s not even due to start for a while, offer to give a more nominal amount (5%-10%) with the contract and the rest on the day the work commences.
4. He's not only marking up labor, but materials too
No contractor wants to talk about it, but he’s going to mark up everything he pays out to make your job happen. That’s fair; it’s how he pays his own overhead and salary. Keep it in mind that the 10% to 20% mark-up applies not just to materials but labor costs, too.
What you should do: If you can handle buying items such as plumbing fixtures, cabinets,countertops, and flooring, ask your contractor to take them out of his bid price. Be sure to agree on specific numbers and amounts of what you’ll be buying, and that you’ll have the items to the jobsite when they’re needed. You could save 10%-20% or more from what your contractor might charge.
5. He’s not the design whiz he claims to be
Sure, there are contractors who have strong design abilities. Chances are, however, they’re spending a lot more time running their businesses than honing their design chops.
What you should do: Don’t count on a contractor to design your space and add clever details, unless he clearly demonstrates his abilities and has a portfolio of his own designs. Ask his references specifically about his design skills. Otherwise, you’re better off hiring an architect for overall planning, and a kitchen and bath designer for the details. The cost of those design professionals usually is compensated by efficient planning and problem-free design work.
Instead, their role is to sign clients, manage budgets, and schedule a cast of subcontractors. When he’s trying to win your business, a contractor can be pretty vague about how involved he’s going to be — and who will be running the job day-to-day.
What you should do: Inquire who will be in charge of the jobsite. Ask to meet the job foreman, preferably while he’s at work on a current jobsite. “Maybe he’s a chain smoker or doesn’t speak English or who knows what?” says Stockbridge, Mass., contractor Jay Rhind. “You want to make sure you feel comfortable with him.”
3. A big deposit is unnecessary -- and possibly illegal
When you sign a contract, you’re usually expected to pay a deposit. But that’s not for covering the contractor’s initial materials or set-up costs.
If his business is financially sound and he’s in good standing with his suppliers, he shouldn't need to pay for anything up front. In fact, many states limit a contractor’s advance. California maxes out deposits at 10% of the job cost, or $1,000 -- whichever is smaller.
What you should do: If your contractor is asking for, say, 25%-30% of a job that’s not even due to start for a while, offer to give a more nominal amount (5%-10%) with the contract and the rest on the day the work commences.
4. He's not only marking up labor, but materials too
No contractor wants to talk about it, but he’s going to mark up everything he pays out to make your job happen. That’s fair; it’s how he pays his own overhead and salary. Keep it in mind that the 10% to 20% mark-up applies not just to materials but labor costs, too.
What you should do: If you can handle buying items such as plumbing fixtures, cabinets,countertops, and flooring, ask your contractor to take them out of his bid price. Be sure to agree on specific numbers and amounts of what you’ll be buying, and that you’ll have the items to the jobsite when they’re needed. You could save 10%-20% or more from what your contractor might charge.
5. He’s not the design whiz he claims to be
Sure, there are contractors who have strong design abilities. Chances are, however, they’re spending a lot more time running their businesses than honing their design chops.
What you should do: Don’t count on a contractor to design your space and add clever details, unless he clearly demonstrates his abilities and has a portfolio of his own designs. Ask his references specifically about his design skills. Otherwise, you’re better off hiring an architect for overall planning, and a kitchen and bath designer for the details. The cost of those design professionals usually is compensated by efficient planning and problem-free design work.
Compliments of National Association of REALTORS
Thursday, April 19, 2012
Short sale process improving
Things are looking up in the short sale world...or at least it's supposed to be. On paper the changes made by the settlement between the Feds and the big banks look AWESOME! We'll have to see if it all pans out like its supposed to. The bottom line of the changes is that it's supposed to shorten the length of time it takes to get to the closing table. This is great news for those of us that have seen short sales take as long as a year to close! That's disgraceful and there's no excuse.
Now the lenders will be held accountable and actually have rules THEY have to follow!
I'm going to research this a little further and post the rules exactly as they were mandated by the settlement. I think you're going to love it!
To be continued......
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Sunday, April 1, 2012
Sales remain strong In Jacksonville FL
Wow! What a difference a few months make! The short and sweet version of what's going on in the Jacksonvile Market is this:
Our inventory is DOWN to a 6 and a half month supply. A "normal" or stable market is considered to be a 5-6 month supply. We're almost back to normal! Break out the champagne!
Have you been house hunting lately? Good luck! The inventory is VERY low. It's hard to find very many houses to look at. Guess what this (historically) means? Yep. Supply vs Demand = Higher home prices. Keep that in mind if you're still sitting on the fence.
Need more proof? How about these factoids? New listings crept up a little in February, but not nearly enough to keep up with the number of sold properties.. I'm thinking that means that we're exactly where we were this time last year. Know what that means? Yep. The bottom is here or so close I can almost see it!
More evidence? The median sales price was down a whopping 0.2% over last year. I say that doesn't count. I'm going to call it a wash and say that the median sales price didn't fall. I mean seriously, 0.2%? I'm thinking that means that we're exactly where we were this time last year. Know what that means? Where are all of the REO's and Foreclosures that were headed to the market? They haven't made it here YET. CAN IT BE THAT WE'VE HIT BOTTOM??
Just maybe. Pending sales are up 26.5%. Yes, you read that right UP 26.5%. About half of those (47.4% to be exact) were distressed sales (short sales, foreclosures, REO's) and the rest were gool old fashioned seller owned properties.
Can it be? Someone pinch me. I think we've hit bottom and maybe, just maybe, with this shortage of new listings, prices just might to start going up. I will be happy if they just stablize and stop falling. Afterall. All we want is a healthy market where Sellers can Sell and Buyers can afford to buy.....
I think we just might be there now. What do you think?
Our inventory is DOWN to a 6 and a half month supply. A "normal" or stable market is considered to be a 5-6 month supply. We're almost back to normal! Break out the champagne!
Have you been house hunting lately? Good luck! The inventory is VERY low. It's hard to find very many houses to look at. Guess what this (historically) means? Yep. Supply vs Demand = Higher home prices. Keep that in mind if you're still sitting on the fence.
Need more proof? How about these factoids? New listings crept up a little in February, but not nearly enough to keep up with the number of sold properties.. I'm thinking that means that we're exactly where we were this time last year. Know what that means? Yep. The bottom is here or so close I can almost see it!
More evidence? The median sales price was down a whopping 0.2% over last year. I say that doesn't count. I'm going to call it a wash and say that the median sales price didn't fall. I mean seriously, 0.2%? I'm thinking that means that we're exactly where we were this time last year. Know what that means? Where are all of the REO's and Foreclosures that were headed to the market? They haven't made it here YET. CAN IT BE THAT WE'VE HIT BOTTOM??
Just maybe. Pending sales are up 26.5%. Yes, you read that right UP 26.5%. About half of those (47.4% to be exact) were distressed sales (short sales, foreclosures, REO's) and the rest were gool old fashioned seller owned properties.
Can it be? Someone pinch me. I think we've hit bottom and maybe, just maybe, with this shortage of new listings, prices just might to start going up. I will be happy if they just stablize and stop falling. Afterall. All we want is a healthy market where Sellers can Sell and Buyers can afford to buy.....
I think we just might be there now. What do you think?
Wednesday, November 30, 2011
Jacksonville Beaches area real estate market update
As they say, "the numbers don't lie". The Beaches area markets are all over the place! Without giving out TMI (too much information), I'll give you the hightlights and the lowlights of the Beaches market. I'll give you the condensed version.
Jacksonville Beach has fewer listings than it did in Oct 2010 (-31.7%) but the median sales price price was up 9.1% ($232,300.00) over October 2010. Year to Date in Jax Beach median sale price is up only 1.4%. BUT---the key word here is UP! Inventory is down 24.3% from the same time last year. We are down to a 7 month supply of inventory in Jacksonville Beach. That's a GREAT thing!
Neptune Beach took a huge hit on the median sales price. It was down a whopping -59.7% compared to October of 2010. Year to date numbers are a whole lot better - up 16.7% to $280,000. The median sales price in October 2010 was $501,500 and this year the median sales price was $202,000. WOW!! There are 8 months of inventory on hand in Neptune Beach right now. This is down 46.7% vs the same inventory in October of 2010.
My head is hurting from all of these numbers! I am ready to bang my head against my computer monitor. I never was much of a bean counter! One last report to go!
Atlantic Beach had 25% fewer closings in October of 2011 than they did in 2010. The median sales price is up 20.7%. The current median sales price is $281,250. Again, the key word is UP! So the bottom line in Atlantic Beach appears to be fewer homes sold, but the ones that did sell - sold for more! There is a 7 and a half month supply of homes on the market right now in AB.
Jacksonville Beach and Atlantic Beach both showed improvement in price but fewer homes sold. Neptune Beach had a price DECREASE but year to year, the prices are up 16.7%.
[Image]The number of homes on the market continues to decline. This will probably force prices to continue rising. Interest rates remain low so this just might be the perfect time to buy!
Call me today and let's get out there and find you a house at the Beach. Can't you just see yourself taking a long walk on the sand today?
Jacksonville Beach has fewer listings than it did in Oct 2010 (-31.7%) but the median sales price price was up 9.1% ($232,300.00) over October 2010. Year to Date in Jax Beach median sale price is up only 1.4%. BUT---the key word here is UP! Inventory is down 24.3% from the same time last year. We are down to a 7 month supply of inventory in Jacksonville Beach. That's a GREAT thing!
Neptune Beach took a huge hit on the median sales price. It was down a whopping -59.7% compared to October of 2010. Year to date numbers are a whole lot better - up 16.7% to $280,000. The median sales price in October 2010 was $501,500 and this year the median sales price was $202,000. WOW!! There are 8 months of inventory on hand in Neptune Beach right now. This is down 46.7% vs the same inventory in October of 2010.
My head is hurting from all of these numbers! I am ready to bang my head against my computer monitor. I never was much of a bean counter! One last report to go!
Atlantic Beach had 25% fewer closings in October of 2011 than they did in 2010. The median sales price is up 20.7%. The current median sales price is $281,250. Again, the key word is UP! So the bottom line in Atlantic Beach appears to be fewer homes sold, but the ones that did sell - sold for more! There is a 7 and a half month supply of homes on the market right now in AB.
Jacksonville Beach and Atlantic Beach both showed improvement in price but fewer homes sold. Neptune Beach had a price DECREASE but year to year, the prices are up 16.7%.
[Image]The number of homes on the market continues to decline. This will probably force prices to continue rising. Interest rates remain low so this just might be the perfect time to buy!
Call me today and let's get out there and find you a house at the Beach. Can't you just see yourself taking a long walk on the sand today?
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