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Getting out of RESIDENTIAL

8K views 45 replies 17 participants last post by  NCPaint1 
#1 ·
Today I was talking with the HO about my price and presentation in comparison to the others that quoted this job. I am finishing a residential exterior repaint in one of my focused neighborhoods. (Upper mid-class, 3000+ sq/ft homes) She received 3 other bids, one totally high off the average, one that had different company info than the one she contacted (sub), and one that was comparable to me. The first two were out from the start so it was between me and the 3rd guy. 3rd guy "does it on the side and this is his last year he will do painting jobs", he is not insured, and will not give a written estimate. :eek: The HO said even though I was higher, they preferred me since I was professional and met these standards, especially with a 40' side on their property. Come to find out the HO informed me this 3rd guy underbid me across the street for a bid that was awaiting scheduling and that they do not plan on me doing their job. He is also "looking good" to two other neighbors that I was informed were interested in painting. The job he underbid was asked by the HO if they were concerned with him not being insured. Their response was that they checked and their homeowners policy covers him. :blink: Now I know we talk all the time about how low ballers and the under qualified are hurting us all but I have about had it. I'm tired of fighting for jobs to discover who I'm working against. And it irritates me more that HO are actually considering guys like the 3rd. I am so frustrated that I try so hard to do things honestly and correctly to find all the dishonesty and not qualified doing MY job. It actually offends me. I know there will always be low bids ect, but I need a market that at least has standards to business practices.

Just venting...
 
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#2 ·
andy.. I feel your pain man. Just get out of that neighborhood.. i know all about them man. they all get together and try to work contractors down on price. Not good. My customers this year have been the best I have had. I hope this trend continues.. but it has taken me 2 yrs to get to where I am now after comming outta 100% commercial. That is what I was getting at in the choosing a painter thread. people are not using their heads when they are hiring "pro" companies.
 
#3 ·
not to mention the hail storm brought in a TON of out of state.. eh.. talent?! It makes me mad to see Texas plates up here knowing that we cannot just go down there if they have a hurricane and need the extra help.. that chaps my hide BAD!!
 
#7 ·
That would piss me off. Had the same scenario once. It felt really good working on that house looking all professional doing a kick ass job while the guy across the street had his hack doing some shotty work for not much less than our price at the same time. Tim was with me on that one. I think the best part was when Tim offered to that homeowner across the street to borrow his truck to haul some debris rather than scratch up his pretty suv, and we wasn't even the contractors doing his work.

Show up, look great, and kill them with kindness. Next time they may do a better comparison of what they got vs what they could've had, or even tell the other neighbors damn I wish I would've went with him instead. Or not!
 
#8 ·
Andy,

I don't know what it is. Sometimes it's the HO looking for the lowest price, sometimes it's a neighborhood attitude, and sometimes it comes down to how a service provider connects with the HO, the rapport built.

Couple of years ago I estimated a couple of rooms for a HO in the town in which I grew up. Remember, I ain't cheap. I immediately tried to connect with commonly known people, knowledge of the neighborhood (I literally walked by her house every day to the school bus stop - well before she owned it), and her family name.

She had her exterior painted by Hack 'n' Fraud Lowballing Brazilians & Co. No insurance (my home owners will cover it), were wearing sandals while on ladders, incredibly piss poor work - grinder marks everywhere. She accepted my bid and took my recommendation to hire one of my painting buddies. The guy is really good and reasonable, but on the pricey side.

She loved my work yet complained endlessly about my painting buddy, "He's so expensive and slow". (He had wicked plaster repairs to deal with)

Now, why, with a history of hiring lowballing scum, was she happy with me yet not with my buddy?

I conclude it has to do with an intangible like rapport.

All you can do is keep plugging away and perhaps look for little ways to make a personal connection with a potential customer.
 
#9 ·
Its a numbers game, Andyman. I give over 500 estimates a year and complete about 250 jobs being the highest priced company in my market. I've learned all the clues and it still gets to you a little bit when this happens, so I feel your pain. Statistics are in your/our favor. The majority of people will not buy on lowest price unless you have not sold them on the value of your service. If you sell it as a paint job, then it becomes a commodity. Find the right hot buttons and people will pay the higher price and be happy they did.
 
#10 ·
Sounds like you are listening to more gossip than my 80 yr old aunt does when she is working the sewing circle. I'd say go commercial and then you will find out that business is business and nobody said it has to be fair. Only the strong survive so work harder and smarter than your competition and you should be okay. But not everyone is suited for business and this is something that you will have to determine yourself. Sincerely James A. Blackwell
 
#13 ·
Times are tough, even folks with a lot of money are looking to spread their dollars further - not to mention there is that old saying....$hit rolls downhill. Well the painting trade is at the bottom of the trades hill. There are always lowballers, as Fenner says statistics are on our side, and I was selling jobs even at 70% higher pricing prior to the housing market bubble that peaked in '06. Now my pricing is like about 150% higher - and I can't close any jobs where folks get other estimates.

My theory is that when folks are paying good money for competent legitimate contractors - everyone is happy. The minute some guy steps in, thinking his cheaper pricing will make folks happier - it never bolds well - the exact opposite happens. Once people think they've been taken, you could work for less than minimum wage and they're still never happy.
 
#14 ·
As frustrating as it is, it happens. I deal with the same thing too. Just move on. I did a bid a few weeks ago. Spent a good amount of time on color consultation with her too, leaving some color samples. Went home and put together a proposal and emailed it. A day or so later, she called and was pretty sure she was going with me and asked me if I could bring a fan deck by? Didnt have one with me that day (usually do) so on my way home from the job, I went out of my way to stop by the paint store and grab a couple more fan decks, then went even more out of my way to drop one of them off. A day or so later she emailed me and said her husband knows a painter and they are going with him, but Im welcome to stop by and pick up my fan deck and samples. Lol Yeah, right. Another one a couple weeks ago kept emailing me questions, then changed the scope of work and requested a new proposal. Ok. Did that, and she emailed back and said she already knew a painter and was going with him. Did I get pissed? Not really. I do question WTF they want me to bid if they already have a painter allthough I already know the answer. So, it happens. What are you gonna do? Its part of the game. Just keep on truckin bud ;)
 
#15 ·
As frustrating as it is, it happens. I deal with the same thing too. Just move on. I did a bid a few weeks ago. Spent a good amount of time on color consultation with her too, leaving some color samples. Went home and put together a proposal and emailed it. A day or so later, she called and was pretty sure she was going with me and asked me if I could bring a fan deck by? Didn't have one with me that day (usually do) so on my way home from the job, I went out of my way to stop by the paint store and grab a couple more fan decks, then went even more out of my way to drop one of them off. A day or so later she emailed me and said her husband knows a painter and they are going with him, but I'm welcome to stop by and pick up my fan deck and samples. Lol Yeah, right. Another one a couple weeks ago kept emailing me questions, then changed the scope of work and requested a new proposal. Ok. Did that, and she emailed back and said she already knew a painter and was going with him. Did I get pissed? Not really. I do question WTF they want me to bid if they already have a painter although I already know the answer. So, it happens. What are you gonna do? Its part of the game. Just keep on truckin bud ;)
Unfortunately people use people all the time....I did a job recently where the couple was selling their home and moving to Costa Rica....I finished the job and left them a name of a realtor friend of mine...I dropped by 3 weeks later to pick up an extension cord I left behind and they told me that they were not impressed with my realtor buddy because she didn't like the paint colour and suggested new kitchen cabinets...Actually the paint colour was an ugly dark green that was on the walls already so I agree with the realtor...{They were just too cheap to pay for 2 coats and get a different colour}...

Now on top of that they interviewed 4 other Realtors and benefited from all their research of other houses in the area with similar sq footage and price..These Realtors provided nicely done stat sheets and pictures for them...

Get this....Now they are going to sell the home themselves,FISBO and use all the free info to their advantage..Now that's using people!
 
#19 ·
Sold my last house on Kijiji...total commission = $0. :thumbsup:

The realestate profession disgusts me. (...and I rarely use a strong term) They make WAY too much money for what they do. The bottom of every piece of information is "not guaranteed to be accurate. Can't be held liable, etc...." A lawyer closes a deal, a realtor is a over paid middleman.
 
#20 ·
Sold my last house on Kijiji...total commission = $0. :thumbsup:

The realestate profession disgusts me. (...and I rarely use a strong term) They make WAY too much money for what they do. The bottom of every piece of information is "not guaranteed to be accurate. Can't be held liable, etc...." A lawyer closes a deal, a realtor is a over paid middleman.
I've worked with many decent realtors who have made me thousands of bucks over the years...I can't complain.
 
#22 · (Edited)
I totally feel your pain. I've lost lots of jobs lately due to bs like that/lowballers. I started not to care anymore, I have done this couple of days ago, walk in, didn't like that the HO told me who was bidding and how much, I said sorry to interrupt but, you can give the job to the cheap guy, I know how much it cost me to run my business, if you want a real price call me next year and I will come back and fix this guys failed job, I walked out, I don't really care if I was being rude, so what, that person wasn't even my customer yet and will never be. Totally disrespectful from her to tell me who was bidding. It's not like I walk into my dentist and tell him ohh I'll give you $100 for you to take all my wisdom teeth out, or if I tell my doctor that other doctor it's gonna charge me half price, or, do we walk into the gas station and fill up the tank and we pay what we think it's worth. F.ck that! Everyone has a price and I realize that now, if you can't afford me, cool good to know so I can move on...
I know we can still struggle with lowballers taking most of the jobs but I came to this conclusion:

"lowballers will be busy and totally booked till October and all by cheap price shoppers, by mid next month I will be just as busy from customers that will value what I do for living and will pay in full and no questions ask for my professional services.

Period
 
#24 ·
I have a realtor's license and know quite a few realtors. They do not make that much money unless the market is boom and they are selling premium listings

That 7% gets split between selling and buying agents. Then the 3.5% gets split in half by the brokerage firm. That leaves 1.75% for the agent. From that 1.75% the realtor has to pay for all the ads, showing costs, travel, and marketing events. Final commission may be 1% - 1.5%
 
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#26 ·
I have realestate friends also. Again, I'm NOT talking about the individual, I'm talking that MLS has created a monopoly on 'information'. As you mentioned PP its become top heavy and now that 7 points gets split up to support the pieces of the pie.

You guys are talking about working with the agent....we're not on the same page.

I've sold three properties on my own.

I don't see selling my own house as low ball at all! Completely different. I sell my own cars, I sell my own bikes, my own toddler beds, ipods, lawnmowers, etc. I don't pay a commission on any of those.

I've also worked with agents with good and bad results. They provide a service...I choose not to use it. (again....that's lowball?!)

If they could 'sell' the house, then I would feel differently, but they can't. It comes down to you getting a lawyer anyway. They put their name on the front lawn can cut a cheque to MLS.

I would have no problem paying MLS $1000 or $3000 as a straight fee to advertise with them....nope they want $20 000 from the sale.

- I renovate the house
- I clean the house
- I prep it for show

And they want $20 000+ just to show it.....and you guys are thinking I'm a lowballer! Why do they need that much....to support what they have created themselves.
 
#27 ·
I will make one defense of realtors and their 7% commission. I think there is a possibility that realtors have created a 'sellers' market for homeowners and have spiked up the price of real estate over the years, sucks for buyers, but buyers eventually become sellers, right?

It's the same thing with art dealers, all these artists hate them and their 50% commissions. But without them artists wouldn't be selling their work for 50k, art dealers create a market for hyper-inflated art pricing. I think real estate agents have done the same with real estate. I still don't care for them.
 
#29 ·
Except if we agree with your defence in your (American) case they created a bubble that has had disastrous results.


Now don't get me wrong, I'm not just beating up on agents....I think that whole system has gotten too fat for their own good.
 
#32 ·
I look at selling your own house as cutting off your nose to spite your face. The reason the term low balling was mentioned by someone is because it is the same thought process cheap homeowners have... "This is easy and companies overcharge for it. I'll save money and do it myself."

1. You cannot get your property listed on the MLS if you do a F.S.B.O. Your exposure falls dramatically.
2. Many real estate websites will not list an FSBO property. Even less exposure.
3. (Honest) Agents have a better understanding of comparables and can give you a truer feel for what your property will sell for. Of course a listing agent can tell you to sell at a lower price because they are only losing 1% of the lowered price, you lose the other 99%.
4. Homeowners are not educated in R.E laws of disclosure. That can equal a lawsuit.
5. An agent will weed out time wasters and tire kickers. An owner will spend a ton of time showing to prospects who neither have the finances nor real inclination to buy.
6. Homeowners won't get the same feedback from prospective buyers that an agent would. People are reluctant to tell you that your cluttered house is a sh-thole and overpriced.
7. Many agents won't show an FSBO home. There is no listing agreement and the agent has no way of knowing if he/she will be paid properly.

So for saving the money you end up with less traffic, more hassle and headache, potential lawsuit, longer time on the market with carrying costs and statistically a lower selling price.

Isn't that the same thing that happens to a person too cheap to pay the proper rate for a professional painter? Its all about hiring the right agent. Again, as a comparison to painting in hiring the right contractor.
 
#33 ·
Actually the biggest difference is I'm talking about selling my OWN houses not someone else's house.

If someone wants to paint their OWN house then fine, save the money. When they offer to paint the neighbours house because painters "cost too much" then the "lowballer" term applies.

I don't dispute your points....those are the accepted risks of selling my own homes. I'm willing to take those risks (which I deem minor) for the savings.

What annoys me is when an agent says "I can't" and trys to fear me into using them.

I've been asked to 'show' friends houses as they too want the savings of commission, but aren't educated therefore intimidated of the process. No way, I won't accept that risk...THAT would be lowballing. I tell them exactly the points you have raised and to get an agent.

Anyway, as for selling for myself, I agree and disagree with your points. They are all very doable and worth it in my books.

Ok....now I'm late.....got to run...have a grand day!

Paul
 
#34 ·
I've sold 4 homes and a commercial building, (twice, LOL), without using a realtor. It wasn't so much the 7% commission fees that bothered me, as it was all the little fees the realty companies wanted to tack on, ie; $360 for "document storage", just to name one. Anytime I had a realtor representing a buyer for any of the properties I sold, I gave them a couple of options. They could take 3% - after adding on the appropriate percentage on top of my sale price or they could step out of the transaction altogether. BTW: The longest any of the homes sat on the market was 27 days. The only discrepancy I ever had on an inspection was a faulty electrical recep., took 5 minutes to replace.
 
#35 ·
Back to the OP - Guys, (and Gals), this has been going on probably even before I got into the business. Yeah, I experienced it also and made a decision on who I was going to market to, how I was going to do it, and not let the customer dictate my business plans.

First, you're always going to have price shoppers. It doesn't matter if you've set your marketing plan up to appeal to everyone, or to a select segment of the market. You can either throw your hands up in disgust and walk away from the business or you can analyze just what changes you need to make. Second, about 70% of price shoppers can easily be determined during your qualifying process.....if you have one, and if you do, if you're doing it right. If you want to run out the door to estimate every potential job that calls in without qualifying, you have no one to blame but yourself for wasting your time and gas.

The trend has seemed to be that while there have always been price shoppers, the painting contractors have added to their own woes by creating some themselves. And now to add to the problem, everyone is internet savvy, and all of a sudden the HO that beat up a contractor on pricing, is a self-proclaimed expert and is offering up their astute advice on how to do it.

So what do you do? Adapt to the HO's demands? Adapt your business model and business plan? You're a business owner, so ultimately it is your choice.....NOT the HO's. Ask yourself why there are contractors who always get their price and why they survive and consistently grow their businesses on a yearly basis. I know of quite a few members here that do that quite successfully. Use the search feature, plent of threads on related topics in this forum. Put aside the notion that we're all ego-driven know-it-alls and take the information for what it is.

For those who write that they'll just wait for the call to go fix the other guys mess - guess what? Those calls don't happen all that often, for more than a few reasons. If the HO wants to go with a lowballer, it's their choice. The smartest thing you can do is walk away from it totally. Get it off your mind and put your mind-set to better use. Should that call come, treat them as a new customer, qualify them, and re-do your estimate accordingly.

Learning to paint, to do it proficiently, and be able to diagnose and correct any problems that arise is challenging enough. Just because you have that mastered, does not necessarily make you a good business owner.
 
#36 ·
I got a call a minute ago about vinyl siding replacement. it is a 1' X 1' and will only need 1 piece replaced. I asked the guy "you getting multiple quotes on such a SMALL job?!" he said yes.. I asked him why for such a small job..

this is residential folks.
 
#37 ·
Do you think all people get multiple quotes because they are looking for the best price or the best contractor? Almost every "How to hire a contractor" article says "get 3 estimates and compare".
How many customers have heard horror stories about bad contractors? How do they know if you are the right one?

I really like what Wolf said, especially,

If you want to run out the door to estimate every potential job that calls in without qualifying, you have no one to blame but yourself for wasting your time and gas.
 
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