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Stepping On Throats

 
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Old 02-22-2011, 09:05 AM   #1
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Stepping On Throats


Ok, so for the last few weeks I've dropped several highly competitive estimates for your basic bathroom gutjob remodels. Nothing crazy, you know, like your typical 5x7 to 6x9 bathrooms in middle crust homes in the 'burbs. The customers aren't looking for taj mahal bathrooms, just your basic ceramic tile, basic vanities, new tub, etc. So anyway, let's be real, we all know that these basic bathrooms aren't expensive jobs in the first place, and I know my pricing is on par with the local market. However, due to the "get your contractor at a lower price" BS that the HOs are foaming at the mouth over, the HOs are bidding the contractors against each other (not that this is news to anyone here).

What I'm seeing in this market is that now the legit guys are eliminating the permitting process entirely to lowball the competition (me). I only bid and do legal, permitted work, so it's clearly become a waste of my time to bid apples to oranges now. That all being said, I've already modified my target markets to exclude these timewasters and lowballers, but getting lowballed by dropping permits from the equation has just left a bad taste in my mouth. I can deal with losing to a pure price difference (again, apples to apples) but to eliminate permits when they're required is unprofessional and creates and un-level playing field. It's sad, but I'm seeing more and more of this every day, and I'm sure many of you are too. But one thing we always read about on CT is that we have to change with the market, so, unfortunately for the hacks out there, I'm changing. Changing from passive, live and let live mode, to active, seek and destroy mode against this BS.

As of today, I'm making a promise to myself, my industry, and my peers that make the effort to run a proper, professional business to agressively target those whole skirt the rules. They have cost all of us too much business, put a black eye on our industry, and helped to create a severely negative market imbalace that has been amplified during our current economic doldrums. As of today, if I see unlicensed hacks, I'm reporting it. Unpermitted work: I'm dropping the dime. Illegal workers: Yes, I'm calling ICE. The point being that we all talk about how these shady operators are hurting us, but we continue to tolerate them under the "karma" principle. Well you know what? Karma doesn't pay 941s every month. Karma doesn't pay insurance. As far as business is concerned, karma can kiss my lily-white a$$.

[deep breath....]

I have no intention of going ape on my legitimate competitors that play by the rules. I respect them, as one professional to another. Again, apples to apples. But for everyone else out there, I have made it a priority to step on the throat of the illegitimate trash. That is competition that my business, and our industry cannot continue to tolerate.

Regards,

Ollie
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Old 02-22-2011, 09:19 AM   #2
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Re: Stepping On Throats


I hear your rant and sympathize. But how can you be upset about the "lack of" permitting costs. Are you really losing a bid to just the permits?

I would never do a legitimate job w/out a permit. Thats all I do are legitimate jobs anyway. A basic gut bathroom job is 4-7k depending on finishes. Around here, the permits required for that might cost $200. Are you losing over that? Clearly it's not apples to apples then.

I find I'm losing jobs to cheap homeowners who only go w/ the cheapest price. Theres always someone who will do it cheaper. I'm not saying lower your price. Theres already too many threads on that. I think you you just have to sell better. But if all they want is a cheaper price, then you don't want that customer anyway.

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Old 02-22-2011, 09:20 AM   #3
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Re: Stepping On Throats


I say good for you. I might get some flak for it but I'm with you. I'm getting tired of it as well. I've tried to get around this problem through property owner education but I have heard directly from owners that the unlicensed are doing their own brand of education. They are throwing a lot of bull at the homeowner and the owners are following them because they are cheaper. Well I think it is the responsibility of everyone in the industry to keep all the members of that industry honest. If you don't turn them in you are not helping your industry by upholding your responsibility as a contractor. I really don't care if you and I make some people angry. Our licensing, permits certifications and such are all in the best interest of the property owner. If they don't care if their contractor plays by the rules then it is my and your responsibility to ensure that their contractor plays by the rules. Let em' have it.
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Old 02-22-2011, 09:34 AM   #4
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Re: Stepping On Throats


Good Rant! And good to take a stand! As an industry, we shouldn't tolerate the cheating unlawfulness that continues on a daily basis. If we know this is going on, it should be reported.

When a permit is pulled for a bathroom remodel, how many inspections are required? I'm guessing framing, insulation, rough in and final at least. There's more cost to the permit fee then just it's cost. Time with the inspector, lost time waiting for the inspection, time and material dealing with fussy inspectors. Therefore guys working without permits are at a significant advantage, as they can be in and out at there leisure, and don't have their tools tied up at a job waiting for inspections, etc...
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Old 02-22-2011, 10:13 AM   #5
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Re: Stepping On Throats


There are definitely a ton of hack, "I lost my other job so now I am a remodeling contractor" people out there, operating on a shoestring, no insurance, no license, etc.

I find that a lot of my customers are watching HGTV prior to their remodeling projects and shows like Holmes on Holmes and others make it easier for me to show the damage that can be done by unqualified contractors.

We have always done the job the correct way, pulling permits, and using the best materials and methods and it really pays off. Almost all my work is referrals, which normally goes without competing against hacks.

But with the bad apples, people are stressed about contractors working on their home, so I think all of them that are doing it wrong or illegal should be reported.
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Old 02-22-2011, 10:19 AM   #6
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Re: Stepping On Throats


Let me begin by stating that I do agree that the playing field has to be level.

BUT...... if we continue to allow to Big Brother to keep on heaping excessive rules, regulations and expenses upon us and our industry at every drop of the political hat, I see us eventually coming up against another problem we will not be able to solve with a phone call to the INS.

Taking Juan and Julio completely out of the equation, we are slowly, but surely, letting the government price our industry way beyond the reach of the average homeowner.

Sad thing is we do not seem to see this snowballing truth when it is happening right under our noses every single year. Instead, we seem to take some strange, almost sick, pride in adhering to this flood of often unnecessary and unreasonable legislation.

Most of you are too young to remember the war years when many domineering European nations did this very same thing to their citizens. As they say, "History is doomed to repeat itself when people don't learn from it."

I believe we have been 'trained' and 'conditioned' to react to and attack a type of scarecrow in the present illegal alien situation so that we will not focus on the true source of the restrictions that have to eventually cripple our industry.

We really might want to wake up and take a more realistic and objective look at where the genuine financial threat to our industry is stemming from.
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Old 02-22-2011, 12:32 PM   #7
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Re: Stepping On Throats


Well, I gotta get my post number up so I can show my business card...So, I was always taught never to make a decision when in an emotional state of mind. I agree, that playing by more rules than someone else isn't always "fair". But, I'm not doing it because it's legal, I'm doing it because of my ethical beliefs and a little not so common thing called "integrity".

If we could all be honest here, the construction game (at least in New York) has been trampled by over saturation and people doing the "wrong" thing. As a result, "they" have come down on the trade and are enforcing ALOT of rules and regulations. I look at it like the speed limit...They know that if they set it at 30, people are doing 35-40, its worked in to their margins. If everyone followed every rule all of the time, they might find they wouldn't get very far, or quickly in the speed limit case, they would just get taken advantage of by the people who can balance themselves. I'm not saying childishly that "rules are meant to be broken". I'm simply saying that sometimes you have to use your own ethical regulations to determine what is applicable and appropriate on a situational basis. Bad business will always be around, and there will always be some to get underhanded by it and make it there new mission to "get justice". But that won't make your business any better, which is what everyone's priority SHOULD be. Think positive and positive things will be. Scouring out bad business is not very positive, its all about energy brotha.

But then again, I havn't been doing this for long and I'm young, so I may have no idea what I'm talking about...
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Old 02-22-2011, 02:02 PM   #8
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Re: Stepping On Throats


Get used to it...there always have been price wars...we are just seeing more of it now because of the surplus of so called contractors.

Willie T hit the nail on the head with this one...couldn't agree more.

It's only going to get worse.

And to the dude that says an average bathroom gut and remodel is between $4k and 7k....what F-in planet are you from?
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Old 02-22-2011, 02:16 PM   #9
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Re: Stepping On Throats


its not just the price of skirting the permits, I think hes talking about the implications of doing so.

Contractor can cut price for less time and cut corners in material and building principles if he needs to.

so its not the dollar value of the permit, its that without the permit, you can do what you want and come in considerably lower.

Thats the problem for me, people who are hacking up the job.


Lets be honest as well, we have probably all been on a job that had permits and still thought to ourselves....what a sh***y job.


as well I suppose the argument can be made, that you dont want to work for those people who want to cheap you to death anyways, permit or no permit
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Old 02-22-2011, 02:20 PM   #10
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Re: Stepping On Throats


Too bad we can't do like Architects and self-regulate.

They make their own rules that they must work by or they face discipline and can lose their license.

Who takes their license? The gov't? No, their own boards and disciplinary committees (who are also elected among themselves).

As far as price, permits add more than just the $200 permit fee. There is a lot of time wasted with inspections, that all add up (depending on how many you have). So yes, permits can add significantly to a job, especially a small job that requires lots of inspections.
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Old 02-22-2011, 02:24 PM   #11
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Re: Stepping On Throats


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Originally Posted by Winchester View Post
Too bad we can't do like Architects and self-regulate.

They make their own rules that they must work by or they face discipline and can lose their license.

Who takes their license? The gov't? No, their own boards and disciplinary committees (who are also elected among themselves).

As far as price, permits add more than just the $200 permit fee. There is a lot of time wasted with inspections, that all add up (depending on how many you have). So yes, permits can add significantly to a job, especially a small job that requires lots of inspections.
Very good points.

As for the permitting fee, you are correct. Though the actual fee might only be $200....we could easily spend upwards of 4-6 manhours on inspections, filing, etc.
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Old 02-22-2011, 05:44 PM   #12
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Re: Stepping On Throats


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Originally Posted by CookeCarpentry View Post
Very good points.

As for the permitting fee, you are correct. Though the actual fee might only be $200....we could easily spend upwards of 4-6 manhours on inspections, filing, etc.
I think what he means by permits is...

the other contractors aren't pulling permits which means they are doing the electrical, hvac, and plumbing on their own. Pulling permits requires using all liscensed trades.

A hack doing plumbing for 15$ an hour does not to compare to 85$ hour for a liscnesed plumber. Hello???
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Old 02-22-2011, 07:24 PM   #13
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Re: Stepping On Throats


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Originally Posted by CookeCarpentry View Post
Get used to it...there always have been price wars...we are just seeing more of it now because of the surplus of so called contractors.

Willie T hit the nail on the head with this one...couldn't agree more.

It's only going to get worse.

And to the dude that says an average bathroom gut and remodel is between $4k and 7k....what F-in planet are you from?
It will get worse you are right. I've have said the same thing and people get angry, but the truth is ugly and the writing is on the wall. Everytime someone gets laid off here comes another backhoe, here comes another truck with a ladder on top, here comes another handyman plumber, carpenter, roofer etc. As for the undocumented workers, many of the ultra rich, high profile people in this country employ them when they could afford to hire anyone. The new realities of this business are not pretty... an ever shrinking pool of buyers and an over supply of sellers. I have very low overhead, my prices are very reasonable, and I warranty the work and I still get passed over 80% of the time now, it never used to be that bad, maybe 30%. Even with pre-qualifing it really gets to be a downer running leads after awhile
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Old 02-22-2011, 08:21 PM   #14
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Re: Stepping On Throats


I have to agree that this goes a little (lot) deeper than "permits". I am dealing with the same issues here in Northeast PA. Most of the local municipalities require at least a copy of the insurance for the record on anyone who performs any work, as well as permits for zoning and building. It is unbelievable what I hear when I show up to prepare an estimate.

" The other guys who were here before you said that I don't need permits or inspections"... These guys who run there "business", don't give a crap about the legals, the ins and outs much less knowing the codes and inspection process. With that being said, this genre of client is what I am steering away from, and building my reputation on doing it proper, no matter what. Stick to your guns.

Ollie, I am right alongside with you on the stepping. Sad to say that I have had to take out some garbage in the last year myself, with some being relatives to my better half. It's tough, but necessary. Especially if my sons are to follow my footsteps.
Thanks for the post, and letting me rant.
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Old 02-23-2011, 08:51 AM   #15
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Re: Stepping On Throats


For me the permits thing was the figurative straw that broke the camel's back. When you get burned on three bids in a row because of it, you might understand my frustration, hence the mild rant. In any case, I think we all know that this is just one example of the problems we all deal with all over the country.

Relative to permits, it's a function of playing by the rules within your AHJ. I know not everyone on here works in an area where you have to pull permits for everything, and I also accept that there's always going to be a portion of the industry that ignores the rules of the game. I also accept that there are valid arguments for/against the whole concept of permits. I also think Willie makes an excellent point in that the egregious overregulation that we're starting to see just makes a crappy situation worse. So I look at it like this: what can we do as professionals to use the current "rules" to our advantage? Narc'ing out the trash is just one of those things.

I'm not on a crusade to clean our industry so much as to sharpen my knives in a particuarly cutthroat market situation. I think of it as a standing order to stick it to the "bad" competition as much as I can when the opportunity presents itself. For example, I might be working in a condo, and some unlicensed and/or unpermitted work might be going on down the hall; Ooops! I accidentally dialed up my buddies at the building department by mistake as I walked by. Silly me! Oh well.
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Old 02-23-2011, 02:07 PM   #16
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Re: Stepping On Throats


Not sure if it was mentioned but you may want to add a paragraph to your bid on how you only do permitted work with licensed trades and explain why that's important and have a conversation with the client along the same lines.
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Old 02-23-2011, 02:50 PM   #17
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Re: Stepping On Throats


Very interesting perspectives. I have to remind myself that you guys are posting from all over the country and the way you run your business is much different than mine.

For Instance, if you called ICE for undocumented workers in Houston Residential, you would essentially be reporting 90% of job sites. The licenced trades don't even do the rough in work. They subcontract an undocumented crew under their license, then send them a 1099 at the end of the year. Between the city inspector, the subcontractor supervisor and myself, we catch most of the mistakes that these guys will no doubt make. They aren't interested in quality, they will do the minimum that will get them a paycheck, in the least amount of time. If they screw up bad enough, the subcontractor simply replaces them and the process repeats.

The alternative is to use a sub that only uses licensed, legal company workers. These are becoming more and more scarce due to their high overhead and the dismal construction market. A lot have had to shut their doors. I try to use these kind of companies, but sometimes I get priced out due to the excessive costs.

Point is be thankful that you have stricter licensing and inspections in your areas. The playing field is not level here and the pendulum has swung so far in the direction of the hack, that it will be a long time coming before the totally honest contractor makes a comeback.
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Old 02-24-2011, 11:30 PM   #18
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Re: Stepping On Throats


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I hear your rant and sympathize. But how can you be upset about the "lack of" permitting costs. Are you really losing a bid to just the permits?

I would never do a legitimate job w/out a permit. Thats all I do are legitimate jobs anyway. A basic gut bathroom job is 4-7k depending on finishes. Around here, the permits required for that might cost $200. Are you losing over that? Clearly it's not apples to apples then.

I find I'm losing jobs to cheap homeowners who only go w/ the cheapest price. Theres always someone who will do it cheaper. I'm not saying lower your price. Theres already too many threads on that. I think you you just have to sell better. But if all they want is a cheaper price, then you don't want that customer anyway.
For me, the permit costs aren't a big deal but the fact that the hacks do their own plumbing and electrical SOMETIMES is a problem. Most of our clients are not the type to hire hacks. We work very hard to set our selfs apart. We are Certified, well insured and have good ties to the community. I can't imagine having to compete in this economy as a new, unestablished company. Not to say your not, speaking on the "I lost my job so I am a remodeler" types.

If you feel blowing the whistle on these losers is the thing to do, I encourage it. I should do it myself but I won't, JAW
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Old 02-24-2011, 11:40 PM   #19
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Re: Stepping On Throats


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Too bad we can't do like Architects and self-regulate.

They make their own rules that they must work by or they face discipline and can lose their license.

Who takes their license? The gov't? No, their own boards and disciplinary committees (who are also elected among themselves).
this was an idea Sonny had

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Old 02-25-2011, 12:37 AM   #20
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Re: Stepping On Throats


This is one thing that I have never dealt with, but indirectly do. I never pull permits, according to the state I am a fixture hanger. I nail on trim or replace cabinets. Plumbing, electrical, framing, hvac I don’t do any of that, and don’t need a permit to replace a vanity.

However I work for a lot of GC, some very good guys that have been in business for a long time. They pull permits for whatever they do and I put in my cabs. Over the last 2 years I have been hearing more and more hey pull your sighs we have no permits on this job and I don’t want to get in trouble.

Lately I ask during bidding, hey do you have your permits, if not I will not work on site. I will build the cabs and get everything ready for them and they can install it. It just really bothers me that these guys are risking their future and business to feed their family. It is a vicious circle, the price just keeps spiraling down and I am afraid of where it will end.

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