This article appeared in the Greater Park Hill News
Hiring a Contractor in Denver’s Busy Construction Market Can Be Tricky
Jackie, a Denver home-owner, wanted to update the tile in her upstairs bathroom. She called a contractor she had known for a while, one she had referred to friends in the past.
Jackie’s contractor showed up the first day and removed everything from the bathroom- including the toilet. Jackie then spent the next several weeks trying to get her contractor to return to the job, without success. It was around this time that she noticed the wooden floor boards on her main level were wet. The problem? Her contractor hadn’t shut off the water when he removed the toilet from her upstairs bathroom, leaving water dripping down her walls and into her wood floors. What should have been a quick tile job ended up costing Jackie thousands of dollars in damages.
The story of shoddy workmanship is a tale all too common in Denver and Park Hill, where a limited real estate market has pushed construction demand- and its prices- unto another level. The lack of housing inventory has driven demand for both new construction and remodeling into overdrive: leaving homeowners with difficult questions. Is the contractor charging a fair price? Will they be reliable, and can you trust them with upfront costs? Market value for construction has become a flexible term in Denver, where something as simple as installing tile flooring can cost three or four times what it would in other states. This can be especially true in areas like Park Hill, Montclair, Hilltop, e.t.c.
Then there’s the time issue. An experienced contractor could be booked for the next 3-4 months. Their experience may also cost a premium. It tends to be the case that the bigger and more experienced the construction company, the more they will charge.
Ines Mcanna, a local Park Hill real estate developer currently in the process of remodeling and selling four Park Hill Homes, experienced this first hand. Last year, Ines hired a contractor that had remodeled a home down the street from one she was working on. She had inspected his work on the neighboring property and found it to be good. She also didn’t see any negative reviews of this contractor online, and hired him to help remodel one of her projects.
The contractor Ines hired used “subs,” or subcontractors, to complete the work on her home remodel project. While this is a common practice in construction, big problems can arise when the contractor does not pay the subs for the work they have completed. The contractor Ines hired took her deposit check and disappeared, leaving several disgruntled subs who filed a mechanic’s lien on her property. $15,000 in court fees and many fixes later, Ines now has her own lawyer, contract and practices for hiring contractors. She’s found that controlling payments affords her much more control over the process, as well as avoiding misunderstandings such as the one she found herself in last year.
“Control the money” was the advice given to me by Ken, a retired construction industry veteran with more than 40 years of experience. “Control the money, don’t let the contractor get ahead on money, and never pay more than 75% until you are 100% happy.” Being hard on money may seem like an uncomfortable concept to some home-owners, but in construction where contractors may disappear before a project is complete, it’s important to withhold a monetary incentive to ensure the contractor not only returns to the job, but does it to your satisfaction. Many construction professionals will want 90% of payment prior to completing a job, that’s why you should never give them more that 75%.
When searching for a contractor, “word of mouth is worth more than online reviews” says Ozi Friedrich, a Denver architect. For more complex renovations, Ozi recommends hiring an architect, who can also assist in the search for a contractor. “Start interviewing [contractors] early, at the moment they are really busy.” On what to look for when interviewing contractors, he recommends avoiding those who seem pushy or evasive, and getting multiple bids from different contractors. Recalling some unfortunate mishaps he has heard of, Ozi recommends making sure contractors are getting permits for work performed, as well as requesting copies of their liability insurance, so that the homeowner isn’t blamed for their mistakes. “It’s crucial for people doing work to be insured.”
So if you are thinking of hiring a contractor to remodel your home, here are some key tips to remember:
- Control the money: don’t let the contractor get ahead on money—always retain 25% until the job is completed to your satisfaction.
- Know who is doing the work and how they will be paid—important if the contractor is using subs.
- Online reviews aren’t good enough, get references: If you don’t have any on hand, request references from the contractor’s last 3 projects.
- If the remodel is complex, use an architect.
- Always get multiple bids: interview often, interview early.
- Ensure your contractor is licensed and insured.
Utilizing these strategies should help you avoid some of the construction nightmares many Denver homeowners find themselves in.
Park Hill & Denver real estate