CONSUMER AWARENESS REPORT

Hello. My name is Mike Ortwein and I am a remodeling contractor in the Greater Cincinnati area. I have been since 1974.

If you are thinking of remodeling your home, this report will show you how to avoid common and costly mistakes when remodeling.

Sometimes it is hard to tell a good contractor from a bad one, even for the really savvy consumer. Unfortunately there are some contractors who are more concerned in making a quick sale than in looking out for your best interests. Avoiding some common mistakes when hiring a remodeling contractor can save you thousands of dollars and countless hours of frustration.

In this report I will share with you some costly misconceptions about remodeling, and tell you some things you should avoid when choosing a remodeling contractor. I will also make some recommendations which will enable you to gain better knowledge from any remodeler before you invite him into your home.

Misconception #1 - You can rely on the Better Business Bureau to determine whether a contractor is qualified or not.

Wrong. This is a very common mistake.

Many people feel that if the Better Business Bureau has no complaints against a company then it must be a reputable firm. Unfortunately this simply isn't true. Just because a contractor has no complaints logged with the Better Business Bureau does not mean he is competent or that he will do a good job. All it means is that the Better Business Bureau does not have a file on him at this time. In fact, according to the October 1995 issue of Money Magazine, the Better Business Bureau does not do a very good job of reporting all offending companies. So, just because there are no complaints listed with the Better Business Bureau, do not assume you are working with someone who is reputable.

However, the Better Business Bureau can serve a valuable purpose by acting as a "first screen". Obviously, you don't want to deal with anyone who does have a number of complaints.

Misconception #2 - The company which offers you the lowest price is the company you should hire.

Not necessarily. Here are some important points to consider.

On a low estimate, ask yourself:

1. What is being left out or what short cut is being taken?
2. If a worker gets hurt, will you be sued? (Does the contractor carry Worker's Compensation?)
3. If there is a structural failure on your job, does the contractor carry liability insurance to pay for it? Or will you have to worry that your homeowner's policy will cover it? What will that do to your insurance rate, assuming it is covered? (Most homeowner's policies do not cover faulty construction).

Is the price so low that the contractor may fail to pay for all labor and materials on your job and liens could be placed on your home? (How will this affect your credit rating with your mortgage lender?).

Be careful in choosing a remodeler based solely upon lowest price. The price you see offered may not be for the services you want performed, or give you the peace of mind you desire.

Regarding workmanship and quality, take an example with cars. You can buy a new car for $10,000, $25,000 or $50,000. All three cars have four tires and a steering wheel and can take you on any road in the United States. But there is a substantial difference between a Geo and a Mercedes-Benz. Likewise for a remodeling project.

Before you accept a low price, consider the level of service involved, the type of company you are choosing, the project design and specifications, the bill of materials and the level of workmanship. Two of the most common signs of trouble ahead for your project are: (1) a contractor who is offering to do much more work for less money than any other contractor, or (2) a contractor asking for a large sum of money up front. The latter can be a tip off that the contractor is not financially stable. That spells trouble for you down the road.

Though price is a consideration, you should be more concerned with value. That is, getting the best contractor you can find and the highest quality of workmanship and materials for your money.

When choosing a remodeling contractor here are things you want to avoid:

1. Remodelers who cannot verify their name, address, telephone number or credentials;
2. A contractor who tries to pressure you into signing a contract immediately;
3. Any company or sales person who says your home will be used for advertising purposes, so he will give you a "special low price";
4. A remodeler who tells you that a "special price" is available only if you sign the contract today;
5. A contractor who does not furnish client references and financial references from supply houses;
6. A contractor who provides you with out of date information or invalid information;
7. Contractors who are unable to verify Worker's Compensation and liability insurance information;
8. Contractors who ask you to pay a sizeable amount of the job in advance or pay by cash instead of check;
9. A company which cannot be found in the telephone book and which is not listed with the Better Business Bureau;
10. A contractor whose contract does not include an acceptable financing escape clause and a three day cancellation period.
    

So, HOW DO YOU FIND A REPUTABLE REMODELING CONTRACTOR? If you are thinking about remodeling your home, I offer the following seven recommendations:

Recommendation #1 - Choose a contractor who has owned his own business for at least ten (10) years and can supply you with names of satisfied clients and credit references from supply houses.

Recommendation #2 - If you want to choose the right contractor you must ask the right questions.

The way you learn about a company is to ask specific questions and listen carefully to the answers. Here are the questions I suggest you ask and then verify:

1. Does he carry general liability insurance?
2. Does he carry Worker's Compensation insurance?
3. Will he provide you with a written lien waiver? (A lien waiver is a form of receipt for payments for services and materials. It assures you that the subcontractors and the supplies have been paid for and that no liens will be placed on your property).
4. What percentage of his business is repeat or referral business?
   a. If he has very little referral work there must be a reason
   b. Lots of referral work means satisfied clients. Verify this with calls to references.
5. How many projects like yours has he completed in the last two years? Does he have the experience and expertise to do your job professionally?
6. Ask the contractor for references from supply houses where he purchases his materials or call the supply houses yourself and ask the following:
   a. Does the contractor have a history of paying bills on time;
   b. Inquire as to the quality of materials the contractor uses, i.e., lumber grade and species;
   c. For libel reasons the supply house may not say a contractor has bad credit; but if the supplier says it would rather not comment or say anything less than excellent read between the lines.
7. Check to see how vertically integrated the contractor is - does he have the ability to do things himself, or will there be extensive use of subcontractors? Check the following items for in-house versus sub-out:
   a. Engineering and drawings
   b. Excavating and grading.
   c. Foundations, poured or block
   d. Carpentry
   e. Roofing and flashing
   f. Structural walls removal, steel fabricating, concrete sawing
   g. Siding, gutters and soffits
   h. Windows, doors and custom glazing
   i. Electrical
   j. Plumbing
   k. Heating and air conditioning
   l. Insulation
   m. Drywall, plaster and stucco
   n. Ceramic tile
   o. Finish trim work
   p. Custom mill work
8. Will the person you met initially, and with whom you negotiated the contract, stay actively involved in all of the above steps, or is he a sales person whose active interest ends when he gets a signed contract and a commission?
9. Ask the contractor how many years he has been in business on his own as a remodeling contractor - not how many years he has been doing remodeling work. There is a huge difference in running and owning a remodeling business successfully for ten years versus working for someone else for ten years.
10. Be sure the contractor uses a detailed contract which spells out the scope of the project, his responsibility and warranty on his work.
11. Ask exactly what the warranty covers and for how long. Ask to see a written copy of it. Ask for names and phone numbers of people for whom warranty work has been done (nobody is perfect). If they refuse to give you names and phone numbers of customers for whom they did warranty work, you can believe one of three things: (1) they never make mistakes; (2) they have something to hide and are not trustworthy; or (3) they have absolutely no warranty whatsoever.
    

Another way to judge warranty work is to see how long it takes the contractor to get back to you with a written proposal on you project. If it takes him a long time to get back to you when there is a financial incentive, how long do you think it will take him to perform warranty work when a year has gone by and it will cost him money to correct the problem?

Recommendation #3. (This is perhaps the most important). Get several references from a contractor.

A reputable, well established contractor should welcome this request. Once you get the references, call all of them and ask them the following:

1. Ask the following questions about the contractor:
   a. Were the contractor and his employees easy to work with?
   b. Did the contractor have creative ideas?
   c. Was there good communication between the contractor, his employees and the customer?
   d. Did the contractor employ many different sub-contractors, creating a situation where the client had to deal with numerous strangers?
   e. Did the workers show up on a timely basis? If not, did they notify the client if they would be late, or advise of any other problems which kept them from the job site?
   f. Were the workers considerate, trying to minimize any inconvenience during the construction process?
   g. Was trash hauled away on a regular basis and the worksite kept neat?
   h. Did the job move along on a timely basis without compromising quality?
   i. Was the job completed at the agreed upon price?
2. If you are satisfied with the answers to the above questions, ask to come to their home and see the work performed so you can judge the workmanship for yourself.

Most people will be very frank and honest. Speaking to references is the best way to determine the type of remodeler you are dealing with. Make sure the references are recent, for the same type of remodeling project that you are about to undertake, and are located within a reasonable driving distance. Then take a drive and check out the contractor's work.

Recommendation #4. Once you are satisfied that you are working with an honest, competent professional, invite him to your home to discuss the project.

After evaluating your project, the contractor should provide you with a written proposal which includes all of the following details:

1. Size and scope of the project, such as framing specifications, etc.;
2. Cost of the project, including allowances for various budget items (such as windows, doors, tile selection, plumbing fixtures, etc.);
3. Payment schedules;
4. Detailed bill of materials, including grade and specification of lumber, etc.;
5. Who is responsible for what if the home owner chooses to do some of the work himself.

This avoids misinterpretations and confusion. Be skeptical of oral quotes or prices penned on the back of a business card or envelope. The scope, neatness and detail of the contract will give you a tremendous insight into the professionalism of the contractor.

Recommendation #5. Now that you have met the contractor, make sure he has a neat appearance.

This may sound silly, but it is not. A coat and tie isn't necessary, but neatness does count in this business. During construction your home should be kept as neat and tidy as possible, so make sure his truck is clean and he is clean - his shoes should not be caked with mud.

Recommendation #6. When discussing your project with a contractor make sure that you can communicate well with him.

You are about to become involved in an important project together. You should feel that your contractor listens to your needs and ideas, answers your questions and is accessible. This avoids miscommunication and costly errors.

You know what you want to accomplish to make your dream become a reality. It is the contractor's job to listen to you, understand your needs and goals, and implement action to make it happen as smoothly as possible.

Since often no one is home during the workday, the importance of selecting someone with an impeccable reputation for honesty and trust cannot be overstated. While a contractor will have control over who he employs, he has reduced control over the integrity and trust of the employees of any sub-contractor, all of whom will have access to your home while you are not present. Whoever you select to do your job will have access to your home for the duration of the project,. How you feel about this will have a profound impact on your state of mind. Will you get to know and trust the same workers for the duration, or will each day hold a surprise? Will you have to wonder about the integrity and trustworthiness of a new set of strangers in your home at each phase of the construction process?

Recommendation #7. Plan your project. This is really the most important commitment you can make on your part.

Most people spend more time planning a one week vacation than they do the major remodeling of their home. If you are considering remodeling in the near future, sit down and talk with a professional remodeling expert:

• Someone who can answer all of your questions;
• Someone who can help you through the "maze" of planning, not to mention all the bureaucratic "red tape" awaiting you at the building department!
• Someone who listens to your every concern.
• Someone who subscribes to the principles and "secrets" discussed above.

This is the best advice I know and, as you might have guessed, this is the only way Abide Remodeling works.

A WORD ABOUT ABIDE REMODELING

Initially I provide a FREE, NO OBLIGATION interview to determine your concerns and see if I may be of service to you and your family.

If you should invite me into your home I will request that we spend about a half hour talking in general terms about your needs and goals. This will give you an opportunity to ask me any questions, discuss your general goals and see if we interact well with each other. If we both feel comfortable at this stage, then we will proceed to the details of your project. Hopefully I can show you, as I have shown many others, how to make your home absolutely gorgeous, something of which you will be truly proud.

I am hired by many people each year as their contractor. Because I have a steady volume of business, I never accept clients who are not really excited and interested in undertaking their project. I truly love helping my clients remodel their homes. I have so much fun seeing people's homes (and their lives) change for the better, that I would never work with anyone who wasn't excited and really looking forward to seeing their "dream house" become a reality.