March 18, 2009

Price is what you Pay. Value is what you Get.

“Price is what you pay. Value is what you get”, Warren Buffett. In this economic climate the question of price versus value may seem to have more relevance than ever but receiving a far price and an extraordinary product is what we should require, particularly when it comes to investing in our home.

As market shifts bring new players into the remodeling arena and questions over financial futures distort perspectives, it is important to understand that no two remodeling projects or firms are the same. An apple to apple comparison of consumer products like a TV might make it appear that it is easy to make such analogies amongst remodeling companies. That is certainly not the case. It has often been said that if you undergo a home remodeling project based strictly on price that is where the horror story begins. We have all heard the tales.

When you research firms realize that the bottom line price is not merely dictated by a desired profit margin but by the integration of all the facets that add or subtract from a firm’s reputation. Utilizing a skilled, motivated team, high quality materials and workmanship, workers compensation insurance along with a commitment to provide employee compensation packages all add up to equal a better end result for you. There is absolutely no way that all of these services can be realized without an associated expense. Do not let anyone tell you otherwise.

Here are some examples of questionable practices that you will want to verify a firm does not engage in:

• Are they using lower quality materials that will not last as long, will require more maintenance down the road, or are unsuitable to the task?
• Are they suggesting allowances that are so low that almost any product selected will add surprise costs to the project? Costs that in the end you will be required to pay regardless of the fact that you were misled.
• Are they failing to put time and materials in the estimate that will be used to safeguard your possessions both inside and out from dust and damage during the remodeling project. Is coming home daily to a broom swept job site and daily production log a company policy?
• Are they getting the required permits and following the latest building codes?
• Are they carrying workers compensation insurance on their employees and verifying that it is current with their trade partners? Do they have the appropriate insurances in place to cover any mishap to your home?
• Are they providing a 5 year warranty on design-build services?

Remember that price is typically the least reliable tool to determine whether or not you are getting a good value when it comes to a remodeling project. Are you getting what you really asked for and requested and are all components relating to those expectations written into your contract? You should feel comfortable with those answers as you consider and meet with your contractor. There really is something to be said for that little voice inside your head. “Price is what you pay. Value is what you get.”