How to Negotiate with a Contractor (2024)

The phrase “working with a contractor” has sent shivers down the spine of many a homeowner. Delays, cost overruns, lack of communication—it seems that everyone who has hired a general contractor for a home improvement job has a horror story to share.

The process doesn’t have to be painful, though. Whether you’re renovating your kitchen or having new flooring installed, follow these steps to build a good relationship with your contractor and keep your project within budget.

Set the Right Tone
Build a solid foundation with your contractor so you won’t have problems later. While it’s true that some contractors take advantage of unwary clients, it’s also the case that an ounce of kindness goes a long way with them. Treat contractors with respect, rather than suspicion. This way, you can establish a rapport so that they treat you honestly and fairly in return.

And make sure to stay in communication for the duration of the job. So many issues can be nipped in the bud by keeping the lines of communication open throughout a project.

Talk with Previous Clients
Before you commit to working with a particular contractor, talk to your neighbors and friends to see if they have any experience—positive or negative—with the contractor in question. Apps like Nextdoor are another great way to learn about their work, too.

In the contracting business, reputation is everything, so if a neighbor is gushing about a painter or landscape architect, that’s a good sign. You can also look at sites like HomeAdvisor for referrals and quotes from local professionals.

Get Multiple Bids
If you’re doing a major home renovation, definitely shop around. Ask for bids from at least three contractors—and let each one know you are doing so. This will communicate to them that you’re concerned with keeping costs down. You can also use Facebook and other social media to see whether the price of your bid matches other people’s, or if it’s much higher than the going rate in your area.

Cost aside, talking to multiple contractors and soliciting their advice might lead to some new renovation ideas you hadn’t considered. So it really does pay to talk to a few people before getting started.

Get Details in Writing
Before signing any contracts, work out all the project details. This includes asking questions about any contract details you’re unsure about and getting itemized quotes for expenses related to labor and materials costs. If you’re concerned about making sure the contractor completes the job on time, make sure the end date is in writing, too.

Of course, with any big project, the unexpected can happen, and it can affect the timeline. If any changes to the project occur, get the details in writing and double-check all work along the way to avoid end-of-project surprises.

Be Clear About Your Budget
There are a lot of situations in which it can be awkward to talk about money. Working with a contractor isn’t one of them! Don’t be shy when it comes to discussing your budget.

Make sure your contractor knows how low your project budget is—and consider giving them an even lower figure than you can actually afford. Never give them a high-end figure for the maximum that you can afford. This can help you stay within budget even if unexpected costs come up during the project.

Ask for Help Trimming Costs
If the quoted bid is too high, ask how the contractor can get the figure down, preferably during the bidding phase. They might know how to rethink the project to meet your budget. Certain materials, for example, can cost quite a bit more than others. If you’re hiring them to build a new fence or install a new floor, talk to them about pricing out options for different materials.

Remember to treat the contractor as an ally who can help you lower costs if any figures are too high. They want your business just as much as you want their help. So if you’re open with them about cost concerns, they should try to meet you halfway.

Be Creative About Reducing the Price Tag
The costs of some home renovations fluctuate seasonally. Find out what time of year is slow—you may get a better deal in the off-season. For example, if you’re having landscapers beautify your yard, consider avoiding the peak season in the spring.

If you’re handy, you can also do some work yourself. If you’re having a new bedroom added onto your house, maybe you can paint walls. If you’re getting a deck installed, perhaps you can stain the wood. Ask if there are any materials that you can shop around for, too. (Just keep in mind that some contractors get better deals than laypeople.)

Know Who to Call if Things Go Sideways
If the contractor isn’t delivering on what they promised, you might need to call a lawyer or insurance company. These options can be expensive, though, so it always helps to start by talking with the contractor about anything you’re dissatisfied with.

In the end, keeping open lines of communication throughout the life cycle of the project can help you avoid unforeseen problems. Make sure to follow the project closely, ask plenty of questions and treat your contractor as an expert who can help you solve any problems as they arise.

William Myers is a financial writer based in Dallas.

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How to Negotiate with a Contractor (2024)

FAQs

How to ask a contractor for a lower price? ›

How to Negotiate with a Contractor
  1. Set the Right Tone. ...
  2. Talk with Previous Clients. ...
  3. Get Multiple Bids. ...
  4. Get Details in Writing. ...
  5. Be Clear About Your Budget. ...
  6. Ask for Help Trimming Costs. ...
  7. Be Creative About Reducing the Price Tag. ...
  8. Know Who to Call if Things Go Sideways.
Jun 10, 2021

Do contractors expect you to negotiate? ›

Many general contractors are willing to negotiate their prices and terms if they're competing for a job. It is helpful to be up-front with contractors and let them know what you expect from the process: Prepare to answer the contractor's questions, as this will help craft a more exact estimate.

How to tell a contractor they are too expensive? ›

Contact the Home Contractor About Your Concerns

To follow up, begin with a non-hostile phone or personal conversation. Ask the contractor to explain why the price rose so dramatically from the initial estimate. He will likely say something about unexpectedly high expensive labor and materials.

How do you successfully negotiate a contract? ›

10 Tips for Successful Contract Negotiation
  1. Start with a draft. ...
  2. Break it down into smaller pieces. ...
  3. Keep your initial terms simple. ...
  4. Know your “why.” ...
  5. Prioritize your key objectives. ...
  6. Ask questions and understand your counterparty's motives. ...
  7. Come prepared with research.

How do you politely ask for a lower price? ›

Top eight phrases to use when negotiating a lower price
  1. All I have in my budget is X.
  2. What would your cash price be?
  3. How far can you come down in price to meet me?
  4. What? or Wow.
  5. Is that the best you can do?
  6. Ill give you X if we can close the deal now.
  7. Ill agree to this price if you.
  8. Your competitor offers.
Jun 15, 2022

What should you not say to a contractor? ›

What Should You Not Say to a Contractor?
  • 'I'm not in a hurry' ...
  • 'I know a great roofer/electrician/cabinet installer! ...
  • 'We had no idea this would be so expensive' ...
  • 'Why can't you work during the thunderstorm/snow/heat wave? ...
  • 'I'll buy my own materials' ...
  • 'I can't pay you today. ...
  • 'I'll pay upfront' ...
  • 'I'm old school.
Apr 17, 2022

How much more should I ask for as a contractor? ›

In many instances, contractors request a higher rate than full-time employees because employers are not withholding taxes and providing benefits. As a general rule, expect to pay contractors between 50% to 70% more than what you would pay a permanent employee.

When should you not negotiate? ›

When the company is in financial trouble: If a company is experiencing financial hardships, such as during an economic downturn, it may not be the best time to negotiate salary. In these instances, companies might be more focused on cost-cutting measures and may not have the resources to accommodate salary increases.

How far off can an estimate be? ›

An estimate is just an estimate, and it can be reasonable for the final cost to be anywhere from 5% to 20% above the estimate. That's why it's always important to stick to your budget and account for a bit of cushion before you begin any project.

How do I know if my contractor is overcharging? ›

Before hiring any contractor, I suggest you call several of their references and ask them whether the contractor was asking for more money beyond the budget or was overcharging them in any way.

How much money should I give a contractor? ›

Whatever amount you agree on, it needs to be fair to both parties. If your state does not have these legal limitations, you can expect the down payment to be between 10% and 25% of the project cost, though some projects may call for slightly different terms.

What are the three key rules to negotiate? ›

What Are The Three Key Rules to Negotiate?
  • First Key Rule: Preparation.
  • Tips for Effective Preparation.
  • Second Key Rule: Communication.
  • Tips for Effective Communication.
  • Third Key Rule: Flexibility.
  • Tips for Being Flexible.
Oct 20, 2023

How do you negotiate smartly? ›

Ten Tips for Negotiating in 2024
  1. Don't be afraid to ask for what you want. ...
  2. Shut up and listen. ...
  3. Do your homework. ...
  4. Always be willing to walk away. ...
  5. Don't be in a hurry. ...
  6. Aim high and expect the best outcome. ...
  7. Focus on the other side's pressure, not yours. ...
  8. Show the other person how their needs will be met.
Nov 29, 2023

What is the best day of the week to negotiate? ›

salary negotiation tip: schedule negotiation on thursday or friday. Hiring managers are more stressed early and mid-week, making salary negotiating at these times more challenging. Thursdays and Fridays are the best days of the week to negotiate for a higher salary.

How do you talk down a builder price? ›

How to Negotiate the Best Deal with a Builder
  1. Know the Builder's Incentives‍ ...
  2. Shop Around for Financing. ...
  3. Ask About Upgrades‍ ...
  4. Request Your HOA Dues to be Paid ‍ ...
  5. Select a Premium Lot‍ ...
  6. See if They'll Offer a Discount. ...
  7. Request Help with Your Closing Costs.
Apr 5, 2019

How do you ask a vendor to come down in price? ›

To write a price negotiation letter, try to follow these steps:
  1. Use a positive tone. ...
  2. Compliment the supplier. ...
  3. Request a discount. ...
  4. Set clear terms. ...
  5. Hint at an incentive. ...
  6. Choose a date for a response. ...
  7. Research the market values. ...
  8. Try negotiating other factors of the order.
Jul 18, 2023

How do you ask for a lower price on offer up? ›

If you are unable to edit your offer amount, it's because the seller is firm on their price and is only accepting offers for the full asking price. If you still want to ask about price flexibility, tap Ask to chat with the seller about it.

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