Are contractors crooks

In order to put this in the light of the audit without dramatizing it, we must first understand the general business model. We sell an item or service, and anything over our spend is called “profit.”

The margin of profit or loss on a tangible item is much easier to calculate than on a service rendered. We all know that if we walk into a store and a bottle of soda is $3, we get ripped off. However, when we receive an offer from a contractor to replace a floor, for example, most of us have no idea what a fair price is.

Contractors rely on this ignorance and constantly overcharge homeowners for the work. In fact, they are raising the bar on labor costs just because they are dishonest. As consumers, we pay a certain amount for things, but when a product goes up in price, we notice and complain. If this product stays at a high price for long enough, consumers will gradually accept it and stop complaining about it.

This applies not only to the housing industry, but to all sectors. Think about how much we pay for insurance. An insurance agent has a profit margin that depends entirely on overcharging customers. As in all businesses, this is a very undefined area, so business people only calculate how much people are paying. Many business owners believe that when a customer willingly pays the price, it is a fair price.

In our modern world of easy financing, consumers are buying homes so quickly they’re not paying attention to rising labor costs, which is ridiculous. They only see a monthly payment amount that they can conveniently pay or not.

In response to the question, “Are contractors crooks?” The answer is absolute. On average, most contractors overcharge their clients. But that’s true of almost every aspect of the business world.

We can ensure that we are not overwhelmed by contractors by doing all the work ourselves. It’s the best way to save well over half the cost of your home. I help people with this all the time.

There are many books and websites that claim that homeowners can save around forty percent on labor costs by being their own general contractor and hiring subcontractors to do the work. I’ve never seen this work successfully in all my years building houses.

The problem is that if the homeowner is not well acquainted with contractor costing, the chances are they will be taken advantage of by subcontractors. The subs will steal the homeowner’s equity by overbidding labor costs and usually materials as well.

When the homes are finished, homeowners who do all the general construction themselves are usually disappointed with the results in terms of labor savings. Best-case scenarios I’ve seen have saved the homeowner up to twenty percent, but that’s rare. In the worst cases, I’ve seen the subs steal so much equity that the homeowner has to borrow more money to finish the house. This is unfortunate because it takes a lot of time to be a general contractor and if you have done a lot of work without any reward then the whole event will be a big disadvantage in your life.

I’ve seen several over-budget projects lately by homeowners who bought a book or specific house plans making ridiculous claims of saving construction costs by doing all their own general contractors. The books give false hope. The authors of these books are usually former home builders who have a list of do’s and don’ts.

The problem is that if the authors of these books made costly mistakes as prime contractors, their own plan didn’t work for them either. They always say, “Avoid costly mistakes,” but new homeowners who lack experience will make many costly mistakes no matter what.

The real damage done in these cases is not the money wasted on the book or the plan, but the wasted time and money of gullible homeowners.

That’s why I believe DIYers literally have to lend a hand. If they do all their work, they won’t get ripped off. Material prices will be the only numbers they need to worry about.

But building a house alone is definitely not for everyone. I truly believe that as humans we defeat and underestimate ourselves. We can do almost anything we believe in, but therein lies the problem. Once we stop believing in ourselves, we find boundaries where they shouldn’t exist.

Building a home increases our self-esteem. Once we start breaking down boundaries and limitations in our lives, the momentum continues and helps us to be successful in other aspects of life.