Yet another painful (hopefully not fatal) lesson in “Contracting 101”.
A few months back I looked at a bathroom remodel. Pleasant folks, decent job, BUT… without a doubt the most neurotic woman I’ve ever met and that’s saying something. I really had bad vibes (in a previous thread I mentioned she wanted references not only of similar jobs, but ones she could go look over). But, very nice people aside from that so I quoted them high to cover additional agida. They checked out my references (on the phone only) and called me back to say how excited they were to get me. They accepted my price, and my schedule… two months off.
Over the two months we had a few multi hour meetings to reassure her of minute details. Getting more “this is going to be a nightmare client” vibes but felt I was committed. They called me repeatedly to make sure I had put time aside for them and reiterated how they wanted me for this job. About three weeks ago I sent them a contract for review. She responded with a 4 page email of minutae that she wanted spelled out… things like guaranteeing the ceiling would be level. Spent another hour and a half on the phone and email fine tuning the contract. She wanted me to agree to a sizable holdback which was the one area I told her I wouldn’t do, but offered a compromise and said in essence that there had to be some element of mutual trust, that otherwise the contract no matter how minutely detailed, wasn’t worth the paper it was written on. They had to trust me to do the best I possibly could to ensure their complete satisfaction, just as I had to trust them to pay me on time. Left off that I would forward a revised contract and scheduled a time to pick it up with the deposit.
By now you probably guessed the punch line… Got a phone call the morning I was to pick up the contract and check. They backed out. “I guess we just have cold feet, but thank you for all your time”. Soooooooooooooo now my September is looking like a big gaping wound ready to hemorrage money…
Next time I get these vibes, I’m booked… sorry… not available…
Learn from my lesson my fellow newbies.
PaulB
Replies
Spend the time reading the book "Blink"...there's a chapter in there that pretty much explains that we often get vibes etc which are our brains interpreting body language, verbal and other clues....often our minds interpret things and give us what we call a "vibe" without us even being aware of the data our brains have already understood.
I'd still send them a bill for something. Even if its just for like $250. Worse case is they don't pay.
make the bill something they remember like $ 241.17 or even like $22.81
Or $73,456.89.
"Let's go to Memphis in the meantime, baby" - John Hiatt.
http://grantlogan.net/
Over the two months we had a few multi hour meetings to reassure her of minute details.
you bid. they accepted. and then...this? no contract, no deposit. and then...this?
there's a line that gets drawn where you've done all you can and should before a deal is struck and money changes hands. you let them cross the line, run over it a few times, smear it, whatever.
And you put time aside without a contract and a deposit. Ahem, "Dear Madam, I would very much look forward to doing your work, but I'm afraid that I cannot schedule it until the signed contract and deposit are in hand, and without scheduling it I cannot assure you that I will be available to do your work in two months. In fact, it is looking increasingly unlikely as I have other customers who would like me to do their job during that time frame, and I cannot continue to keep it available for you without a contract and deposit."
SHG
For every complex problem, there is a solution that is clear, simple, and wrong.
-H.L. Mencken
Man!!
shaggy you are GOOD!!!
"The truth, when told does nothing but bolster a mans character."
I go in assuming the potential customer is an A-hole ...a very nice A-hole...but an A-hole just the same, because they are all too often. I'm in their homes for weeks...making dust no matter how hard I tarp and screen the room in, I make lotsa noise, I have to tear things down before I put things up .yada yada yada.
I have to be a psychiatrist, a baby sitter, dog sitter, always friendly no matter what my mood is. I have to be a businessman, a contractor, an a attorney, and oh yeh, a builder. More times than not the customer has rose colored glasses on and only sees the end result in their minds no matter how much you warn them. Then...in the middle of the job they get new bright ideas because the wife's best friends sister's boyfriend who is a retired cop and does contracting in his spare time tells them that they should have.......so every morning the customer greets me at the door with new changes. You refigure, give them a change order to sign and you see a blank look in their eyes...more money? I have to sign what??? Never fails.So by now theres tension on the job...yada yada yada
So....from day one I go in with this in the forefront of my mind. If I get even the slightest inkling that the potential customer is starting out from the get go with an attitude or immediately demanding I'm outta there.
I'm thankful for understanding reasonable people which are far and few between...especially in the wealthier hoods.
And what pizzes me off to no end is not being able to charge for a proposal (I know, I know another Sonny Lykos thread) yet appliance guys get a hundred bucks to just walk in your door for an "estimate".
If they did in fact have to pay for an estimate maybe they'd only call us when they're serious. My HMO now charges me $20 every time I go in besides the $15,000 premium...for anything.
And it does in fact make me think twice whether or not I really need to go in.
I'm thankful for nice reasonable customers. I'd give those people all I have in me....and then some!
I watch the same thing happen to my wife in real estate...people can be so incredably selfish and thoughtless...yeh I know, welcome to earth : ) Alfred E. Newman for president (we'd be better off)
I have to be a psychiatrist, a baby sitter, dog sitter, always friendly no matter what my mood is. I have to be a businessman, a contractor, an a attorney, and oh yeh, a builder.
I've seen you being an attorney. If you're playing psychiatrist, I'm hoping they only jump out the first floor window. ;-)
I've seen you being an attorney. If you're playing psychiatrist, I'm hoping they only jump out the first floor window. >>>>>>>LOL....I'm wondering when I'm getting to old to jump in and out of windows.
Nassau/Suffolk Lumber just delivered a truckload of trim a few minutes ago. The driver asked me to unload it all. told him I was too old and the builder wasn't here yet...lol. So he just backed up, slammed on his brakes and the piles in my driveway now all neat and tidy. I was playing psychiatrist...an old one...and it worked : )
Oh, and btw...that case you saw me at....I think I had a few in me, no kidding!...those were the days...oiy vey.
And its funny you should bring that up...I was thinking exactly of that job when I wrote that post. A serious A-hole from India...duh. On the water by where the overhead RR crossing is going into Bayville.
Just decided not to pay me my last payment. Said I left his L.R a mess with spackle. He had all live in help too. Swear to god...I may have left a quarter sized drop of spackle on his floor after patching a ceiling crack....for free. I'll never do work for his kind again....and oh yeh...him and his dw host tennis pros at their home. His wife and Katrina go to the US Open by the fair grounds one year and she insisted she park her Mercedes in a free parking lot about a mile away...
You should have seen me in litigation with him. i was a riot...I went balistic but it was an act...sorta. I won half of what he owed me.He even brought an attorney for $1500 I was suing him for. You know the attorney wasn't being paid I'm sure.
Prig
Back to the mines...
stop by, I'm working around back usually till 7 PM Alfred E. Newman for president (we'd be better off)
I agree with SHG. No contract, no deposit, no schedule...
Brooks
Gotta agree with the others. I don't schedule time without a contract signed and deposit in hand. And I want that within a week of you saying you like my proposal. It gets more critical once you have employees (maybe you do) since your overhead will then eat you alive. DanT
paul.. good to hear from you ....even under the circumstances
here's one thing i picked up on in your description..
<<<<They had to trust me to do the best I possibly could to ensure their complete satisfaction, >>>>
i have become very cautious over the years about " satisfaction"
i avoid the term like the plague... and i would never use the phrase " complete satisfaction"
i just tell them we are going to do our best and our best is pretty good.. but perfection and satisfaction are some pretty elusive concepts..
when my potential customers start using those phrases i make sure to correct their thinking...
if i can't i won't do the job...
there are some people you will never please.. but our egos tell us that it was just the other poor schmucks before us who couldn't please them...
the best way to not get on the list of the schmucks who disappointed them is to walk away
you know..... trim is NOT cabinet making.. and painted trim is not stained trim
a level 5 wall finish is not the same as a level 3 wall finish..
yada , yada , yada
i think of it as "managing expectations" and strive to never proffer more than we can reasonably deliverMike Smith Rhode Island : Design / Build / Repair / Restore
there are some people you will never please.. but our egos tell us that it was just the other poor schmucks before us who couldn't please them...
the best way to not get on the list of the schmucks who disappointed them is to walk away
That should be tattooed in every contractor's eyelids.
Bowz
Hey Paul -
What a lousey way to end the summer. A buddy of mine went through the same thing this summer. This type of circumstance is inevitable and though initially difficult and frustrating, it is not impossible to handle. What you need to keep in mind is, as with everything you do, you are setting a precident for your relationship/ business dynamic. Simply put - Do things for free (sketches, many long meetings, contract revisions, etc.), without client investment and they have less reason to value/ appreciate you, your time or your efforts.
In the future, when negotiating a contract which will require several rounds and lots of time, it is perfectly appropriate to request/ demand an "Earnest Payment". This is a non-refundable deposit, to be applied to the cost of the contract, which protects you if the negotiations go south. It also reminds the client that you are running a business and place a value on your time and knowledge.
As you are running your operation now, what's to keep a potential client from behaving as these clients have, only to use you as a free consultant and then have someone else, cheaper, who does not give his time freely, do the job? Been there, done that.
One last point - NEVER book time for a client who has not stepped up to the plate. If they have not financially invested in the project through you, you shouldn't either.
Hope this helps,
Frankie
Experiment with the placing of the ingredients on the plate. Try the mozzarella on the left, the tomato in the middle, the avocado on the right. Have fun. Then decide it goes tomato, mozzarella, avocado. Anything else looks stupid.
Richard E. Grant as Simon Marchmont - Posh Nosh
Paul - that sounds like something I would do. Cancel that. That sounds like something I have done! I appreciate your sharing - I learn a lot from posts like yours, and from the various responses. I'm getting wise(r) to the business aspects of this business, and breaktime is one big reason why. Thanks.
"...never charged nothing for his preaching, and it was worth it, too" - Mark Twain
Sorry to hear that but I got to agree with the others about a signed contract.
Ever noticed what a real estate agents do with buyers? They will take a buyer around and show several houses and talk once or twice about the buyer's needs and then out comes the buyers contract that says the buyer will not use another agent to buy a house in the next six months or there are penalties assessed. The agent says "I've got some great houses to show you but I need you to sign this contract first to protect us both." That's the right way to do business.
I know one contractor who uses two contracts. The first one (the 'bid acceptance contract') is signed when the bid is accepted with some deposit made as well. It states that bid X has been accepted by HO, work will start on or around X date, deposit shall be held by contractor and applied to future bills, either party may cancel the contract in writing but must forfeit the deposit, in the event of HO contract cancelation if work is done by other than contractor within X months then damages may be sought, scope of work shall be defined in separate contract to be signed before start of work, either party may seek damages arising due to cancelation of the contract, disputes shall be sent to arbitration, etc.,etc.
When the HO calls and accepts the bid you say "That's great, I just need you to sign this and send it to me with a check and I will call you when I get it and we will sort out the details of the exact scope of the job."
The second contract is the detailed scope of work contract.
If you had had one of these signed you would have kept the deposit and been able to try to get damages from the HO to cover what you would have made if you are not able to find other work to fill that time period. This kind of contract is easy to get signed and can cure most cases of cold feet if the need arises, and don't feel bad about enforcing the contract, one way or another you got to feed your family.
Oh yeah and your gut is normally right no matter how your mind justifies the situation. Listening to my gut I know saved me on a job bid several years ago. I bid very, very high and did not get the job but a guy I know did get it and it nearly put him under when the HO stopped paying and skipped town.
Anyway I ramble.
Good luck and I hope something comes along,
Day
EDIT: The first contract also has a clause stating if both parties agree in writing to cancel the contract then the HO gets the deposit back and no damages can be sought in the future.
"Do not cut your foot with an axe. It will not add to the pleasures of camp life." -Jeannette Marks -Vacation Camping For Girls- 1913
Edited 9/7/2006 2:31 am ET by restorationday
Consumer education, or the lack thereof, raises it's ugly head once again.
I am coming to terms with just how I need to address this issue.
I am looking at something like this:
Hierarchy of events leading to Job Actuation,
1) Phone call
2) Return phone call
3) Meeting
4) Preliminary Job evaluation
5) Verbal agreemen(maybe written with 50${or more} retainer)[Depending on scope of job and extent of SCA required]
6) In depth job evaluation
7) SCA & proposal
8) Proposal acceptance and deposit (30-50% based on materials etc.)
9) Job added to calender
Ok Boys lemme have it!!!
I'm here to learn!!!
I wanna print this in BIG fonts and put it next to the phone(or tattoo it to my nostrils)
Right now I got :
1 long time customer/friend with work IP
1 long time customer whose job I am trying to finish and get paid for
1 deposit for a small job/repeat customer
1 kitchen and 1 bath both waiting on $$
1 deck waitng for competing bids (not counting on this one)
1 window replacement waiting on window order
1 Big wiring and DW job to bid for repeat cust.
1 small odd joibs and somw woodwork for a repeat cust.
and hopefully nothing I have forgot!!!
I don't want to pizz any body off
with my luck I'll either get ALL these jobs or NONE !!!
but I doo need to establish a priority system so customeers can commit and get a commitment and not feel ignored.
gotta go work...
"The truth, when told does nothing but bolster a mans character."
Thanks everyone for the input. I know all too well what I did wrong, I've been around the block more than often enough to know better. But as always, plenty of good ideas and suggestions come of these conversations. Moe than anything I just hope someone else avoids getting porked from having read this thread...
PaulB
sounds to me like U got out at just the right time.
Sooner woulda been better ... but getting canned from a loser ain't such a bad thing.
just one biz type thing to add ... I no longer ask for a "start check" ...
I require a "scheduling deposit" to get next in line.
and like Mike said ... I try to not give a "carved in stone" start or completion date.
and .... each scheduled payment on the contract started with "upon substantial completion of" what ever the previous phase of work was.
I'm not all there yet ... but these babysteps have helped the cash flow the last coupla years ... still not great ... at times not good ... but better and better each year.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Jeff,
you're right- a "scheduling deposit" sounds better and reinforces the idea of money sent=time spent on job.
My hvac guy works this way, and i was very pleased with his work(though his crew were a bunch of slobs).
One thing I have changed is that instead of making draws at completion of a certain phase I make them due at the beginning of a phase. An example would be, X$ due at start of drywall, or X amount due at start of siding. This keeps from having to be held up by a punch list item that cant be completed yet or having people disagree on what substantial completion of a certain phase really means.
ccal...... i try to word my draws to fall in with starts also....
in the first 15 years or so , i used traditional draw language.. after a while i figured out the wording came from banks or lenders.. it certainly wasn't written by builders
and a few beefs about when the "siding complete" was really complete
or 23 windows were installed and one on back order
i switched to "starts"
"foundation complete " became "start framing"
etc.....
"starts " are starts... "completion" is almost never completion
Mike Smith Rhode Island : Design / Build / Repair / Restore
Good advice - I'm changing my contracts tonight.
"Let's go to Memphis in the meantime, baby" - John Hiatt.
http://grantlogan.net/
How do you handle your last payment?
We do the same thing
"Start of Framing"
"Start of Drywall"
etc.
For our last payment we usually have a substantial completion payment and the final complete which amounts to roughly 5%
Well to be honest you're probably better off with out the job.... If she was that big of a PITA onn the front end, the job would have most likely ended up a nightmare and you wouldn't have made any money anyways...
Probably better to sit on your rear at home and make no money then to bust your rear for no money.
In the end chances are something will fall in your lap anyway, just go beat some bushes until something falls.
At least you got away from yours for free. Mine cost me $3000. Had a lady this spring. Nice older lady spoke broken english but I thought we understood each other. She gives me a deposit, I schedule her in, everything was fine.
The second I opened my tool boxes the job went bad. She was RIGHT ON MY BACK, and all of a sudden everything I ordered was wrong. Do I cut my losses and leave at this point? Oh no, I can take a bigger beating than that.
Bottom line I end up refinishing this ladies kitchen cabinets (back to original finish) AND giving back her deposit (I know I could've fought that but I just wanted out).
The only satisfaction I got out of the job was that I wouldnt give her, her countertops and was actually able to get credit for them a Lowes.
I do have to say though, a big part of me wanted to deliver her counters to her house and drive over them in her driveway right in front of her.
there's a lot to be said about trusting your insticts and knowing when to walk away. I was referred to a guy this summer by a prominent designer and the more we talked the more I got that feeling, so I cut him loose.
the guy called the designer and whined about how I treated him. then she called me and apologized and told me he was becoming a real PITA
anyway, did you manage to fill your schedule?
Nope... have two jobs out for review right now but I'm down to paying the phone co with a CC and chewing my fingernails...
I feel your pain. I extend myself all the time to clients... Sometimes it works out some time it doesn't. I'm always playing the game. Will this get me something down the road..
Anyway, the bottom line is TIME IS MONEY and that should always, always, always play a part in your decision making.
p. s.
If I'd take that advice more often i would be much better off.