The vast majority of contractors are honest, hardworking professionals. Protecting yourself against the few bad apples requires checking references, having a solid contract, and being alert to the warning signs of these top ontractor scams.

Take my word for it

When you first meet with the contractor, he’s very agreeable about doing everything exactly to your specifications and even suggests his own extra touches and upgrades. Some of the details don’t make it into the contract, but you figure it doesn’t matter because you had such a clear verbal understanding.

Pretty soon, you notice that the extras you’d discussed aren’t being built. When you confront the contractor, he tells you that he didn’t include those features in his price, so you’ll have to live without them or pony up additional money to redo the work.

How to protect yourself: Unfortunately, you have no legal recourse because you signed a contract that didn’t include all the details. Next time, make sure everything you’ve agreed on is written into the project description. Add any items that are missing, put your initials next to each addition, and have the contractor initial it, too—all before you sign.

I don’t need to pull a permit

You’re legally required to get a building permit for any significant construction project. That allows building officials to visit the site periodically to confirm that the work meets safety codes.

On small interior jobs, an unlicensed contractor may try to skirt the rule by telling you that authorities won’t notice. On large jobs that can’t be hidden, the contractor may try another strategy and ask you to apply for a homeowner’s permit, an option available to do-it-yourselfers.

But taking out your own permit for a contractor job means lying to authorities about who’s doing the work. And it makes you responsible for monitoring all the inspections—since the contractor doesn’t answer to the inspector, you do.

How to protect yourself: Always demand that the contractor get a building permit. Yes, it informs the local tax assessor about your upgrade, but it weeds out unlicensed contractors and gives you the added protection of an independent assessment of the work.

We ran into unforeseen problems

The job is already under way, perhaps even complete, when this one hits. Suddenly your contractor informs you that the agreed-upon price has skyrocketed. He blames the discovery of structural problems, like a missing beam or termite damage, or design changes that you made after the job began.

The additional fees might very well be legit, but some unscrupulous contractors bid jobs low to get the work and then find excuses to jack up the price later. If you’re unsure whether your contractor is telling the truth about structural problems, you can get an impartial opinion from a home inspector, the local branch of the National Association of Home Builders, or even your local building department.

How to protect yourself: Before signing the contract, make sure it includes a procedure for change orders–mini-contracts containing a work description and a fixed price–for anything that gets added to the job in progress. The extra work, whether it’s related to unforeseen building issues or homeowner whims, can proceed only after the change order is signed by both homeowner and contractor.

I’ve got extra materials I can sell you cheap

This hoax is usually run by driveway paving companies, whose materials—hot-top asphalt and concrete—can’t be returned to the supplier. So the crew pulls up to your house with a load of leftover product and quotes a great price to resurface your driveway on the spot.

Even if it’s really a bargain (by no means a sure thing), taking them up on the offer is risky if you have no idea who they are and haven’t checked references. And if the driveway starts cracking next year, you can bet you won’t find this bunch again.

How to protect yourself: Never hire a contractor on the spot, whether it’s a driveway paver, an emergency repairman who shows up after a major storm, or a landscaper with surplus plantings. Take your time to check contractors out to make sure they have a good reputation and do quality work.

By: Atlas Green Homes HQ

Published: January 7, 2019

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The average cost of a bathroom remodel over the last quarter was less than $10,000. Out of a pool of 3,000 homeowners, 9 out of 10 were not only pleased with their project, but would recommend it to others. When you think of the money and resources that get wasted by leaky pipes, dripping faucets, inefficient showerheads, and obsolete toilets and, add the hassle of waiting for mirrors to clear up, waiting for hot water (or running out too soon), and dealing with water pressure problems it’s easy to see why so many folks are so happy with their new bathrooms!

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General contractors are familiar with every stage of building a rock-solid and beautiful home. To a large extent, the physical act of building is the most enjoyable part of a contractor’s job. It’s the advanced planning of costs and fees that presents the real headaches and challenges.

A lot can go wrong when predicting costs and fees associated with a building project. Home buyers want the most cost-efficient contract possible and this puts builders under pressure to create a financially competitive bid that also covers all the costs and expenses of the project — even the unexpected ones.

Let’s take a closer look at the most important components of a residential building contract.

The Two Types of Home Building Contracts

There are two primary kinds of home construction contracting formats that builders commonly use to map out contractor fees for residential construction. Both these types of contracts offer slightly different contractor fee schedules:

• Competitive bid contracts: During the competitive bidding process, the home buyer selects several contractors and gives them about three weeks to create a bid. The home buyer will then take the time to review each of the bids from the different contractors and ask questions for clarification. The home buyer will probably want to interview the contractors before making a final selection.
• Cost-plus home building contracts: Cost-plus building contracts have become a lot more popular in recent years because they offer transparency and a simple structure. A cost-plus contract includes
  • (1) the base costs associated with building the project,
  • (2) plus the contractor’s management and coordination fees, a.k.a., the construction management contracts and fees percentage. This percentage is usually around 15 percent of the base costs.

Markups That Affect Total Contract Costs

Building contractor fees will include an array of extra costs called “markups.” Markups can increase total fees by 10 to 30 percent. Here’s a list of typical markups included in home building contracts:

• Insurance: Insurance costs include the price of general liability insurance and tools, machinery, leased equipment and workers’ compensation.
• Taxes: Taxes may include city, county, state and federal taxes that apply to the job. Other taxes may include Social Security, Medicare and unemployment taxes for employees.
• Labor burden: A typical contractor fee for labor burden involves the expenses of employing a team of workers. These include costs relating to recruitment, training, taxes, vacation time, retirement plans and other expenses.
• Office and staff: These are the costs of renting or maintaining an office space where staff members work, including costs associated with phones, utilities, security, landscaping and more.
• Transportation: Transportation costs relate to the transportation of people and materials to and from the job site. Expenses associated with contractor-owned vehicles, rental vehicles and the rental of large equipment such as dump trucks and backhoes. Insurance and maintenance costs associated with these vehicles may also be included in transportation costs.
• Communications: Communications costs are associated with maintaining communication devices such as smartphones, email and computers for staff to stay in touch with each other and the client.

Contractors may be tempted to include a “warranty” fee, but this is not the general practice. Instead, home building contractors will cover the costs of follow-up repairs out of their profits from the job. This is part of the responsibility of being a contractor, and why it’s essential to scope out the job, and complete it, as perfectly as possible.

Create Accurate and Competitive Bids for Your Construction Contracts

Since 2001, Houston Plans & Permits has assisted Houston-area contractors and their clients throughout the permitting and home design process. Houston, Austin, San Antonio Plans & Permits takes the guesswork out of the painstaking aspects of producing house plans, allowing you to focus on what you do best: Building rock-solid and beautiful homes that your customers fall in love with.

Contact us today to get a quote on your next project!

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On-demand heaters are wall-mounted and smaller than tank-storage heaters, but space is rarely an issue. Either type can be fueled by gas or electricity, but the fuel source isn’t key. Both types use conventional burners and heating elements, so there is no new technology that makes one system better than another.

The contest boils down to efficiency, which seems to favor the tankless type because it’s not chugging away at 4 a.m. when everyone’s asleep. It produces hot water only when people need it. That matches the way most households use water — not 24 hours a day, but in peak periods for showers in the morning, and for cooking and doing dishes in the evening. Logic suggests that if you pay to heat water only at those peak times, it must cost less than heating water all the time.

The American Council for an Energy-Efficient Economy says that by eliminating standby losses in a storage tank, a tankless system can reduce energy consumption by 10 to 15 percent. Recent figures from the U.S. Department of Energy (DOE) also show that tankless heaters, overall, use less fuel. But don’t dump your conventional storage-tank heater just yet.

First, check these cost figures from the DOE’s Office of Energy Efficiency and Renewable Energy. It calculated average one-time costs (purchase plus installation) and annual operating costs based on average utility rates for both types. The installation estimates: $865 for a 50-gallon storage-tank heater and $1,470 to $2,500 for a gas-fueled, tankless water heater.

To see how a tankless investment might pay off, take the median, or $2,000, as the average installed cost, plus a few hundred more to disconnect and remove the existing conventional tank. How long will it take to recoup your investment with the more efficient tankless system?

The DOE computes average annual operating costs of $388 for a storage-tank heater, and $272 for a tankless heater. That’s $116 less. If the tankless system costs $2,200 installed, and saves $116 a year, it would take about 19 years to break even on the investment. If the new tankless system replaced an Energy-Star storage-tank heater (its operating costs are $360 a year), it would take about 25 years to break even. Anytime, but particularly when money is tight, saving $116 starting about 20 years from now is not high on most homeowners’ lists.

With 50 gallons waiting in a tank, two people can take morning showers (about 20 gallons each on average) while another does some dishes and makes breakfast (about 5 to 10 gallons). In older homes with corroded or small-diameter supply pipes this math may not add up. But if old plumbing doesn’t get in the way, a storage-tank heater can supply hot water to several fixtures within a peak-use period.

A tankless heater can supply no more than its flow rate, typically 2 to 5 gallons per minute. With a typical shower flow-rate of 2.5 to 3 gallons per minute (or slightly less with modern fixtures and flow restrictors), most tankless heaters will not be able to keep up with a secondary demand, for instance, from a dishwasher, clothes washer, or second shower location.

Gas-fired tankless heaters typically produce more hot water than electric units. But if you don’t have a gas line into the house and have to use an electric unit, existing wiring may have to be upgraded. Even then, the American Council for an Energy-Efficient Economy says that if you rely on electricity to heat your water, a tankless system is unlikely to meet your needs.

On the positive side, and despite the sticker-shock price tag, a tankless heater may be the best solution in a remote or infrequently used location.

For instance, if you have plumbing in a home shop, guest room or studio that’s far from the main water heater, cold water standing in the pipes might delay the delivery of hot water for minutes, and waste a lot of water in the process. The council says that, at most, an electric tankless unit may be appropriate for small applications, such as a remote bathroom without a bath tub.

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