Teardown – "avoid the lady upcharge"

We love a good read, especially advice on how to make the home improvement process less risky. But when we spot some questionable advice, we feel a teardown is in order.

The article in question is called the "lady upcharge" and it contains advice from a real estate professional on how, women in particular, can avoid being taken advantage of when engaging a home improvement professional. Most of the advice is sound and sensible, however we are challenging the following three nuggets:

Get back here and install my Bosch High-Efficiency Front-Load Washer now!!

Get back here and install my Bosch High-Efficiency Front-Load Washer now!!

Nugget #1 - "I call around and get several estimates from contractors, and I usually meet with them in a neutral location. If you have a really nice house, don't invite them there. They're profiling you to see how much they can charge," she says. Meet at a coffee shop or a public place instead.

Teardown #1 - There is not a home improvement contractor in the World, regardless of experience or technological advantage, that can tell you how much your project will cost without seeing the property itself.

And why not?

Well pricing will be a ballpark at best so you wont get a commitment on price without the professional seeing the property but most importantly because you can't tell what your project really is until the professional has actually inspected it.

The act of walking round the property, with a professional, and looking at the project, talking about it, debating the value of certain bits of work and approaches etc, changes the very project itself. It's like the remodeling uncertainty principle: the act of a contractor visiting your property changes the scope of the project.

Nugget #2 - Hold back 15 percent of the total payment until you're completely satisfied, says Gabe Canuso, a local developer in Philadelphia and builder of the Oxford Mills residences.

Teardown #2 - Only 15%? Why not 25%? Or 50%? Hell, why not have the contractor pay for 100% of your project and then chase you for payment until they default on their mortgage and shut down their business. Any savvy contractor will price retention into their bid so it's use as leverage by a project owner is overestimated. Also, it's not the contractor's fault that performance bonds (the best way to ensure a contractor completes a project correctly) are usually prohibitively expensive to offer on small projects (usually, but not always). 

Nugget #3 - Prepay no more than 10 percent of the job total. That's the legal maximum in some states, and enough to establish that you're a serious customer so the contractor can work you into his schedule - the only valid purpose of an advance payment. As to materials and rentals, the contractor's suppliers will provide them - don't fork over a large down payment for materials.

Teardown #3 - The only valid purpose of an advance payment is NOT to establish that you are a serious customer. 

It is also used by your contractor to secure the availability of important sub contractors for your project.

Oh, and it is used for purchasing materials!

Why should a contractor cash flow your kitchen? And if even if they did, why should you pay for the interest on the credit the supplier is charging them? (and how do you know what the interest rate is because rest assured this cost is being passed along to you in your bid).

It is true that most states recommend a maximum advance payment (California for example is $1,000 or 10% whichever is greater) but most states also waive this condition if the contractor has a performance and payment bond in place (which the contractor is required by law to offer their customer in their contract).