00:00:05:16 - 00:00:29:22 Speaker 1 Hello friends. Welcome to the Your Project Shepherd podcast. I'm your host, Curtis Lawson, and we are here to teach that every successful construction project has four components demonstrated by the simple drawing of a house. The foundation is proper planning. The left wall is your team. The right walls, communication and the roof is proper execution. Have all four of these components in place and your project will succeed. 00:00:30:00 - 00:00:52:19 Speaker 1 We're here to help professionals and homeowners alike make the best decisions about designing, planning, and building custom homes. If you'd like more information about how Shepherd can help you with your project or business, visit us at your project shepherd.com. And now, here's today's episode. 00:00:52:21 - 00:01:05:12 Speaker 1 Hey friends, welcome back to the Your Project Shepherd podcast. I'm your host, Curtis Lawson, and today I am joined once again by my friend Dan Baden with Legal Eagle Contractors. Dan, thank you so much for coming back on the show. 00:01:05:13 - 00:01:07:01 Speaker 2 Sure pleasure to be here again. 00:01:07:01 - 00:01:25:11 Speaker 1 So today Dan and I are going to talk about some terms that consumers I know hear thrown around quite a bit. I when they're talking to contractors. And that's an estimate, a quote in a bid. We're going to talk about the the differences like what those terms mean. And I actually got this idea from Dan's website. He's written a bunch of really good articles that are on his website. 00:01:25:11 - 00:01:40:11 Speaker 1 If you want to go check those out. I know some of those have been in some magazines and newspapers as well. He puts out a lot of great content. So thank you. I got this idea from from your website. One day I was just cruising your website and I saw this topic and I was like, we should talk about this. 00:01:40:11 - 00:02:02:01 Speaker 1 We've all we've both gotten calls from prospective customers saying, hey, can I get a quote for blank? Can I get a bid for blank? Can I can you give me an estimate to do X? Right. So many contractor and homeowners I think use these terms kind of interchangeably. But you know, those terms are not interchangeable, right. Well I mean they're used that way, but they really have different meanings. 00:02:02:03 - 00:02:17:01 Speaker 2 Yeah. Homeowners don't distinguish between them that much. But there are differences and there are legal consequences as well. For us as the contractor builder on which term you're using. So we'll we'll get into all that. 00:02:17:01 - 00:02:29:08 Speaker 1 So let's just, let's just kind of start off with with kind of defining these terms as we see it. So the first one I wanted to throw out there was estimate what what's your definition of estimate? 00:02:29:09 - 00:02:58:01 Speaker 2 An estimate is a rough, informal small. Your initial look at what the project might cost for the purpose of your client's getting an idea of budget and feasibility. This is not a detailed, exercise for the contractor. And in fact, for us, it's a way of kind of pre-qualifying people to see if they have any clue about the cost feasibility of what they want to do, because often there's been misalignment. 00:02:58:03 - 00:03:21:06 Speaker 2 People want the Taj Mahal, but, you know, they want to pay for something a lot less, a lot less than that. So it's a way of aligning real at reality costs with, with what the owner's expectations and, and desires are. So you are not going to be doing in an estimate. Typically you're not doing, any plans, not writing specifications. 00:03:21:08 - 00:03:51:15 Speaker 2 You know, maybe you go take a look at it, or talk to them at length on the phone first during your pre-qualification conversation. And, and give some initial comments there before you go out. So actually there's a step before estimate, which is that initial pre-qualification call where we should all be talking about budget and and finding out if it's worth going out to look at or if they tell you that you're the seventh contractor they've called, they'd love to get another bid from you. 00:03:51:17 - 00:04:19:08 Speaker 2 Or they filed suit against the last three contractors who came out. So they'd like you to be the fourth one, you know, things like that. So, these are all ways of kind of easing into the process of, with the in the dance between the contractor and the homeowner. But it's the least it's the least formal and the most, sort of explorative stage of doing this stuff. 00:04:19:10 - 00:04:31:04 Speaker 2 And it's mainly to find out what's possible. They may have unrealistic expectations about scope two. They want may want to build a, a fourth story on a townhouse that, you know, maybe even going to work on. 00:04:31:06 - 00:04:49:13 Speaker 1 Should it be an estimate is kind of like if you go out to meet with somebody at their house and, and you start talking about different possibilities, like, we could do your kitchen for 50 to $70,000, we could probably spend $15,000 on your living room. That's kind of an estimate, right? You're just you're just kind of giving us some general numbers. 00:04:49:16 - 00:04:53:05 Speaker 1 Yes. We think it's going to take to accomplish some different scopes. 00:04:53:11 - 00:05:23:19 Speaker 2 Right. So it is. And you what you're doing is giving some ranges too often in that scenario. Yeah. Or you can do your kitchen, light medium or, you know, full bore. Let's talk about what those each typically include and what those cost. And then you ask which one of those are you A, B or C. And if they thought they were going to B, C or they get something glorious, but their budget is a, it's really important for both parties to understand that, learn that at the very beginning of the process. 00:05:23:19 - 00:05:35:13 Speaker 1 I think a lot of, we'll call them shady, contractors might kind of give a low estimate and get somebody locked in and then and then start hitting with some change orders later on. 00:05:35:19 - 00:05:56:15 Speaker 2 Unfortunately, that's super common. And it's, you know, it's a blight on our, our occupations reputation because the good company is like yours. Don't do that. Yeah. I would speak the truth to people is, as honestly as we can about what they want to do, but, yeah, the the more fly by night people will often underbid it. 00:05:56:15 - 00:06:13:23 Speaker 2 Exactly as you say on purpose. They'll do demo and then they'll start saying, oh, I didn't have this in the estimate. Well, I didn't know there were wires in the wall. I didn't know there were pipes in the wall. You know, that's going to be extra, extra, extra. And it ends up being a horrible, chain of change orders written if they're lucky. 00:06:14:04 - 00:06:16:11 Speaker 2 Usually these people don't even do written change orders. 00:06:16:12 - 00:06:16:23 Speaker 1 Right? 00:06:17:03 - 00:06:41:06 Speaker 2 Maybe in a series of text at best. And it's it's really a horrible, experience for the homeowner. You know, I do expert witness work in construction disputes. So I'm very involved in contractors getting crossways with their homeowners doing bad things and vice versa. By the way, sometimes the homeowners are crazy. Absolutely bad things, for sure. 00:06:41:06 - 00:06:41:17 Speaker 1 Absolutely. 00:06:41:23 - 00:06:54:03 Speaker 2 So I get to see how how these techniques are employed, by the by the guys who don't have good business practices or worse, they're actually unethical and they do it on purpose. Yeah. 00:06:54:03 - 00:07:02:08 Speaker 1 I've seen in also in doing expert witness work and owners rep work that I do, I've, I've seen people's contracts on numerous, on numerous occasions. 00:07:02:08 - 00:07:02:13 Speaker 2 Yeah. 00:07:02:18 - 00:07:10:01 Speaker 1 And I mean I've seen a piece of paper that has the word estimate at the top of it that is signed as a contract. 00:07:10:03 - 00:07:10:18 Speaker 2 Yes. 00:07:10:18 - 00:07:13:00 Speaker 1 You know, no details. 00:07:13:02 - 00:07:16:09 Speaker 2 No specifics, no allowances, no payment plan, no warranties. 00:07:16:09 - 00:07:22:23 Speaker 1 So to to that contractor and to that homeowner, that estimate was actually not just an estimate to them. 00:07:22:23 - 00:07:48:17 Speaker 2 That was what was right. Yeah. You know, to be legally binding a contract requires that an offer of some kind is made doesn't have to be written even, and that there's an acceptance of that offer and some consideration, some money paid though all three of the estimate bid quote, proposal kind of things that we're talking about all require that those contractual elements be met to be to have a valid contract. 00:07:48:17 - 00:08:07:19 Speaker 2 But our projects are complicated transactions and they have a lot of moving parts, and they always change order and add stuff as we go along. And if you don't keep up with that, if you have to be a good business person to to keep up with that, you can end up with easily with a dispute and the parties not trusting each other. 00:08:07:19 - 00:08:32:09 Speaker 2 And you get into what I've seen and call the death spiral, where the contractor is trying to make it good and fix things, and it just makes it worse and the homeowner gets mad or so more things go wrong, and it just gets worse and worse until they can't stand each other. Yeah. So a well-written, contract is really a key thing for homeowners to look for and for contractors to provide. 00:08:32:11 - 00:08:42:18 Speaker 1 Yeah. So my last episode, we had a, kind of Stevens who's a construction attorney on and, you know, we talked about what are some of the most common reasons that homeowners and builders fight. 00:08:42:18 - 00:08:43:04 Speaker 2 Yeah. 00:08:43:08 - 00:09:00:23 Speaker 1 And, you know, one of the big things we talked about was just a lack of clarity, lack of defined expectation as defined specifications on what's what's included and what's not included. It can't be just a one page, you know, kitchen remodel estimate $70,000, period. 00:09:01:01 - 00:09:21:18 Speaker 2 You know, the ones of those I've seen have been a purposeful technique by the contractor so that he's not promising anything. It's so easy to say, no, I didn't include that when you didn't really include any specifics at all. Yeah. So they do it as a kind of a sneaky protection of for themselves. But it never it never ends. 00:09:21:18 - 00:09:27:16 Speaker 1 They can go back and say it says estimate right here that I wasn't sure what it cost estimate. You can't hold me to that. 00:09:27:18 - 00:09:51:06 Speaker 2 Yeah. You know from a legal standpoint what we're going to talk about the different layers of the types of contracts that are typically involved in, in our industry. But for the contractor, calling it an estimate is really the most safe thing for you. You get into a dispute with a homeowner later. Let's say, let's say you got a $500,000 room addition. 00:09:51:08 - 00:10:20:20 Speaker 2 And during the course of the work, the homeowner adds 25 change orders. We want while you're here. You've heard that before. While you're here, we also want x, Y, and Z. So they add all these change orders. If you're a good business person, a good builder, you add time each time you add steps of work. But at the end of the project, if the owners get mad at you about something else, they're going to say, you promised me it was going to be only this long a duration for my project. 00:10:20:20 - 00:10:42:12 Speaker 2 And you've gone way over. So you're bad and I'm mad at you, and I want money from you. Yeah, so that you have to be really careful. And you know about this from just being in the business for so long. Never promise of certain duration because there are so many things beyond our control. Yeah, beyond anybody's control, that it's hard to even produce a Gantt chart that you're not changing. 00:10:42:12 - 00:11:02:05 Speaker 2 Yeah. Every week a Gantt chart is a kind of a bar chart that shows the schedule of the different trades as the job unfolds. Yeah. So yeah, it's, it's a slippery slope, but saying asked using estimate, you could reply to that homeowner that was accusing you of going way over on time and say, you know what, this is all of this is estimated. 00:11:02:07 - 00:11:06:22 Speaker 2 Yeah. So in a way, using that word gives us some protection. 00:11:07:03 - 00:11:23:09 Speaker 1 I think the the tab, the text is a situation builders contract that a lot of builders here in Easton use. I'm pretty sure the there's a paragraph in there in the regarding time that says builder estimates that this project will be completed in X number of days. 00:11:23:11 - 00:11:24:23 Speaker 2 But you know that's not. 00:11:24:23 - 00:11:28:12 Speaker 1 Guaranteed is not easy to. Exactly. 00:11:28:14 - 00:11:55:12 Speaker 2 Yeah. Because we can't. Yep. And homeowners want that I think once in my career when somebody said I want a penalty clause. So you pick the duration. But if you go over that it's $150 a day that you pay me, if you go over and I picked a ridiculously long duration. And in that case, yeah, but the people that request that are usually kind of nefarious anyway, they want to be able to get. 00:11:55:12 - 00:12:13:00 Speaker 2 Yeah, yeah. So they added a bunch of work and drag things out. And we finished on time the day of the final, the final day. And she refused to pay at the end, saying that I cut it to class. So I had to fight with her to get paid. Because it's a game that people want to play. 00:12:13:02 - 00:12:27:10 Speaker 2 So never, ever as a contractor, never, ever do that. The penalty clause just doesn't work. The homeowner can actually cause delays to make sure that you don't meet the deadline by their own behavior and decisions. Yeah. So it's a really crazy thing to do. 00:12:27:10 - 00:12:35:18 Speaker 1 Don't do that. Well, it's like putting a it's like doing a cost plus contract with a not to exceed amount. I mean that's, that's dangerous too. 00:12:35:19 - 00:12:46:01 Speaker 2 That is very dangerous too. And you really can't promise that. No. Without you when you go in you're already breaching the contract. That most likely. Yeah. Bad stuff. 00:12:46:03 - 00:12:46:11 Speaker 1 All right. 00:12:46:11 - 00:13:17:23 Speaker 2 So quote I quote is more specific and more binding. So now you're talking about an actual specific contract. So and in my experience a quote will require that you spend a lot of time delving into the details on what the client wants. The you are writing specifications, you're writing, measuring, maybe even bringing in some key trades may or may not include plans yet. 00:13:18:01 - 00:13:45:12 Speaker 2 That's what I would say for the term a formal proposal. But it's kind of the middle ground where, where you are providing a lot of more specific information and a pretty tight cost might still be giving a range at the end of that, but it's going to be a range within 10% either way. Whereas the ballpark and the estimate those swings could be 40% either way, because people don't even know what what all is available and what they want yet. 00:13:45:14 - 00:14:16:11 Speaker 2 So, the quote is something that takes a lot of contractor time and expertise. So maybe you don't charge for the, the, the initial estimate. That's just to see if you can you can get the job. You guys are going to play well together and see the all. But when you get to quote and proposal, length of of work that you're putting in, you need to charge for those things, which is a whole nother discussion that we can visit a little bit about today. 00:14:16:11 - 00:14:40:20 Speaker 2 But so many builders and contractors and remodelers have been giving away their expertise for so long, putting in huge amounts of hours, you know, multiple site visits on the front end just to get the project pulled together, meeting trades, on site, writing, revising, revising specifications. And the owners are throwing changes at you more hours and to make contract revisions. 00:14:40:22 - 00:14:44:07 Speaker 2 And then they decide not to do the job. Yep. And you have nothing. 00:14:44:07 - 00:14:45:20 Speaker 1 Just wasted 100 hours or more. 00:14:45:21 - 00:15:02:18 Speaker 2 Yeah. Or worse. They take your fabulous work product and they hand it to another guy. Yeah. You know, we have in our contracts that our contracts are in specifications and plans are copyrighted. We should but that doesn't prevent a homeowner from handing it off to somebody else. 00:15:02:18 - 00:15:06:16 Speaker 1 Yeah. It's also very hard to track that down in the future. Somebody else uses it. 00:15:06:18 - 00:15:29:23 Speaker 2 The only time I've caught people doing that is when I'll get a call from another Builders Association contractor who says, you know, Mr. Johnson's guy gave me your detailed construction plans to build this room addition. I mean, is this okay with you? What? You know, how should I handle this? They were kind enough to call me. Yeah, and then I have to call the homeowner and say, you know, you're not supposed to share those plans. 00:15:29:23 - 00:15:35:20 Speaker 2 You signed a contract with me. Design contract saying that it's copyrighted and you can't do that. 00:15:35:22 - 00:15:37:03 Speaker 1 And we paid for it. 00:15:37:03 - 00:16:02:11 Speaker 2 Sometimes. Yeah, they'll often say that. I've had them deny that they did that. And I'll say, I just got off the phone with the guy who handed the plans. Do you know that? That's the ridiculous. They feel they're entitled to to full ownership of the plans, and some contractors will if they charge. But when they charge for the design plans, they will allow the owner to be the owner of the plans. 00:16:02:13 - 00:16:25:20 Speaker 2 I never chose to do that. I did get pushback sometimes on it. So in my contracts I would put a shopping fee or something like that shop around fee, where if someone wanted to share my plans to get another bid from somebody else, then to pay me $1,000 or more for the privilege of doing that and sign an addendum, that's a waiver of liability. 00:16:25:20 - 00:16:34:02 Speaker 2 Release of liability. Yeah. So that if they hire the other contractor, he puts in the wrong structural beam and the living room collapses, you know, in the future. 00:16:34:02 - 00:16:35:06 Speaker 1 They can't come back and say it was your. 00:16:35:06 - 00:16:52:08 Speaker 2 Plans and they would come back and sue me anyway. But that really helps to have that in your contract, that look, I don't I drew these plans for my crews to build. I know their competency. If somebody else built it, I have no control over that or no way to know if they know what they're doing or not. 00:16:52:08 - 00:16:58:02 Speaker 2 So so it's on you if that happens and they actually indemnify me if something if I get sued. Yeah, I. 00:16:58:04 - 00:17:18:03 Speaker 1 I like to compare, the terms quote and estimate kind of two. If you go to, an auto mechanic, right. If you, if you go to the auto mechanic and he, he looks at your car and he, but he doesn't take it apart because again, he's not going to take the car apart for free to figure out which tiny little piece in there might need to be replaced. 00:17:18:03 - 00:17:29:15 Speaker 1 Right. He's going to say I estimate that it's going to be this. Right. But once he does get in there and tear it apart, he's going to give you a quote to fix it. 00:17:29:17 - 00:17:49:23 Speaker 2 And we have to do the same thing because when we open up walls, we find all kinds of badness, homeowner wiring and sometimes life safety, dangerous conditions. Yeah. So for sure we have to have that estimate, quality in the bids. So homeowners know that to expect the unexpected basically. Yeah. 00:17:50:01 - 00:18:05:07 Speaker 1 I mean we, we, we will always, kind of disclaim by, by saying, you know, any, any hidden conditions inside the walls that we have no way of knowing about because it's covered up and it will be presented to the homeowner in the form of a change order if it's needed. 00:18:05:07 - 00:18:26:23 Speaker 2 So, right. Sometimes the change order of necessity, which is something they, yeah, have no choice. But to fix that electrical problem in the wall. Yeah. That's in the that's in our standard. Texas Association of Builders promulgated contract. Yep. But it's a good I actually have an additional layer, where I cover stuff like that in a document that I'm happy to share. 00:18:27:01 - 00:18:43:22 Speaker 2 That's called the realities of remodeling. And it says and they sign it, they have to sign this document. So we go over and at the pre-construction checklist meeting and it basically says, this is why projects go over budget. This is why it takes longer than you want it to or think it's going to. And they end up. 00:18:43:22 - 00:19:09:19 Speaker 2 So they end up seeing they end up understanding the things that are beyond our control and that they're actually listed in there. These are all the things that could go crazy weather, hurricanes. I mean, acts of God, but also just things that are unique to their house, perhaps from the original or subsequent construction, can really be a surprise when you're doing remodeling and it's something that's unique to the remodeling business as opposed to new construction. 00:19:10:00 - 00:19:17:14 Speaker 2 Yeah, we really have to be flexible and teach our homeowners that they have to be flexible when those things come up. Yeah. 00:19:17:16 - 00:19:31:09 Speaker 1 Kind of like, again, when you're going back to the car analogy, when when the mechanic takes your car apart, there might be some, some part in there that's worn that nobody ever could have thought of that it's it's covered up by the wheels, the brake assembly. And you just can't see it until you get in there. Take it apart. 00:19:31:11 - 00:19:40:03 Speaker 1 Yeah. And guess what? Just like on a car, sometimes when you take other things apart, something else breaks because of the demolition. And there's no one's fault. 00:19:40:03 - 00:19:40:19 Speaker 2 Yeah. It's all. 00:19:40:21 - 00:19:45:13 Speaker 1 It's just the way it's assembled. It's going to fall apart. Potentially. When you demo it. 00:19:45:17 - 00:20:02:05 Speaker 2 And for Remodelers, the most common one I think is probably termite damage, where you take off sheetrock, then you see that the top plates on the wall are just gone, or some of the ceiling joists are just gone. And yeah, you wonder how the house was held up sometimes because of the extension. 00:20:02:07 - 00:20:06:14 Speaker 1 Or some really sketchy wiring that someone did years ago. The just they just covered it up. 00:20:06:18 - 00:20:11:13 Speaker 2 See that too? Yeah. Speaker wiring running to a new outlet that they put in them stuff. 00:20:11:17 - 00:20:30:07 Speaker 1 Yeah. I mean yeah I tell people when we're giving a bid proposal to remodel your bathroom, let's say, I mean, I am just assuming in my, in my pricing that we're going to rewire the bathroom. We're going to strip every stitch of wiring out of there. It could be a year old. It could be 50 years old. We don't know. 00:20:30:12 - 00:20:32:15 Speaker 1 So in my price we're just going to rewire it. 00:20:32:17 - 00:20:39:03 Speaker 2 Now, it doesn't add that much cost at all to do that. No, but it's it's a very wise safety thing to do. Yeah. 00:20:39:03 - 00:20:42:14 Speaker 1 And you're also saving yourself a change ordered to if we do have to do it. 00:20:42:14 - 00:21:08:05 Speaker 2 So I had a, too long discussion with a client this week who were doing a bathroom specifications, designing, and he had an outlet that was not GFI. Behind the sink, right behind the sink, behind the faucet. And I said, we really need to move that to center between the sinks and put a GFI there. He said, well, can I just leave it there? 00:21:08:05 - 00:21:23:21 Speaker 2 And I said, it's not a good idea because of location and what it was. He said, well, I just want you to put a GFI in, where that one is located. And there was a GFI on the other side of the room. And I said, we're changing that one, too, because these things go bad. He's like, no, it's fine. 00:21:23:21 - 00:21:41:00 Speaker 2 I don't want to change it. I said, look, it's like $20 to change that out for the for the device and it could burn your house down or not. So let's do that. Okay. Let's just because sometimes we really have to press our clients to, to accept those additional steps that come up. I'll. 00:21:41:00 - 00:21:46:01 Speaker 1 Just say we we you just won't do it. Like, I'm not going to leave that receptacle behind the sink. 00:21:46:03 - 00:21:46:20 Speaker 2 Yeah. 00:21:46:22 - 00:21:49:06 Speaker 1 Find somebody else who will know. I'm not going to do it. 00:21:49:06 - 00:21:54:14 Speaker 2 It comes to that because it could be. Come back on you in spades. Yeah. Wow. All right. 00:21:54:14 - 00:22:01:16 Speaker 1 So next term, is bid. What's a bid? And, what makes a bid different than a quote or an estimate? 00:22:01:19 - 00:22:29:02 Speaker 2 You know, I think a bid is probably a it's about the same as a quote in my mind. Maybe it's, quote light. So maybe you are providing some initial specifications, and pricing for those specifications, but you're still leaving things kind of loose. Again, those could be those two could be interchangeable. And my way of thinking and not as formal as a, as a proposal. 00:22:29:04 - 00:22:29:11 Speaker 2 Yeah. 00:22:29:16 - 00:22:47:10 Speaker 1 I think more contractors use the term bid more in, in conjunction with a proposal. It's like, this is this is our bid, our bid to do your work. I've always kind of thought of it's one step closer to a contract than the others. 00:22:47:12 - 00:23:14:03 Speaker 2 Interesting. Well, it just shows you that there's no set. The, definitions for these. As long as the homeowner is clear on the degree of certainty that you are giving them. That's the key thing. More important than what's on, what's on the top of the of the page. So, under that, under your definition, it would be closer to a proposal which is the most comprehensive. 00:23:14:04 - 00:23:36:22 Speaker 2 Way that you would present a contract. And so proposal bid, you are going to have architectural plans with engineering and construction drawings and have the engineering, detailed specifications, a payment plan so that everyone's clear on how payments are going to flow during the course of the work. And, you know, on big commercial jobs, they always call it proposal. 00:23:37:01 - 00:23:49:07 Speaker 2 Yeah. So I think of that as being something you use certainly on more larger on larger, more complex projects, for sure. And again, that's another one you need to charge. 00:23:49:13 - 00:23:50:02 Speaker 1 Absolutely. 00:23:50:07 - 00:24:03:02 Speaker 2 Yeah. Some contractors will charge and then they'll give the money back if they get the job. Don't do that. You're being paid for your time. Exactly. On the front end. I think I always thought that was a really silly thing for a contractor to do. 00:24:03:02 - 00:24:09:08 Speaker 1 I mean, do you ask your CPA or your attorney to credit back the first ten hours they spent on it? If you move forward? 00:24:09:08 - 00:24:21:18 Speaker 2 No, no, no, I mean, I suppose you could add and pad your price so that you give it back to them. But then really, you build it the time you build it back into your estimate. And I don't know, I. 00:24:21:18 - 00:24:27:19 Speaker 1 Think that's what most contractors do because they it appears they're throwing the homeowner a bone. 00:24:27:20 - 00:24:33:00 Speaker 2 Yeah. It helps, solidify trust. And I don't know. 00:24:33:02 - 00:24:35:01 Speaker 1 I think most people can sniff that out, though. 00:24:35:03 - 00:24:57:02 Speaker 2 And I don't have any problem explaining to people why it's worth it to pay something, to have a skilled pro pull the project together properly on paper to begin with. You know, if it's you got good, good karma and good paperwork going in at the beginning, that's going to continue. But if you don't, it just gets you get to that death spiral. 00:24:57:02 - 00:24:59:00 Speaker 2 And yeah, nobody likes that. 00:24:59:00 - 00:25:25:19 Speaker 1 I think that you and I have enough stories about seeing it go badly from contractors not doing that, that, you know, our sales process, you know, you and I can say if someone's kind of objecting to paying for a proposal for pre-construction agreement, design agreement, whatever you want to call it, you know, we can throw off those examples of, you know, hey, this is this is an example of what can happen when you just go get free, free bids. 00:25:25:22 - 00:25:27:13 Speaker 1 Free free estimates. Right. 00:25:27:15 - 00:25:59:14 Speaker 2 Telling you another thing you can say to convince homeowners that it's worth paying somebody for professional information is that if you don't have somebody that goes to that level of detail, then you're getting some of these ballpark and you don't have a real estimate. You don't have. They're not giving you detailed specifications because they can't either don't know how to write them, or they're not going to spend the time because they're not getting paid for it to, to pull all the project components down on paper. 00:25:59:16 - 00:26:13:21 Speaker 2 Yeah. So really, you're not getting a real a real quote or estimate even unless you get a detailed proposal from someone that really pulls the project together clearly and on paper. Yeah. And they should pay for that. 00:26:14:02 - 00:26:31:09 Speaker 1 So that this actually leads into my next, my next bullet point here that I had. And that's how does it how does a homeowner, a consumer, know which contractor is going to get the best value if they go out and get 2 or 3 proposals, bids whatever you want to call them. How does the person know who's going to give them the best value? 00:26:31:09 - 00:27:02:01 Speaker 2 Well, that's a that's a tough question. Certainly you do your your research online to check out reviews to narrow down your, your contractors that you're considering. If you know friends or family that have used them, that can be good to but it's also okay. Most homeowners don't do this, but it's okay to ask the contractor to show them us a contract, a real contract from another job so that they can see what your paperwork looks like. 00:27:02:03 - 00:27:19:17 Speaker 2 That's actually a great thing to offer as a contractor. Yeah, maybe you do a you generic one up that that you've done for a similar scale project. And say look at this and compare this to what you're getting from the other guy, which is probably a little more than the word estimate at the top and a few classifications. 00:27:19:19 - 00:27:29:13 Speaker 2 Yeah. And and that can help you sell the job. And you know, then if they're really a pro or not by the paperwork that they develop at the beginning of the project. 00:27:29:15 - 00:27:41:20 Speaker 1 Yeah, we, we have a sample contract that we, that we have in our presentation packet that we can show someone and say, this is what you expect to get from us when we're finished with this. 00:27:41:20 - 00:28:06:09 Speaker 2 Very powerful example. Yeah, that's a good way for homeowners if they don't see that should ask for that. Yeah. And also ask to go on site on a project that's ongoing. Yeah. See what our guys look like. Are they toothless and scary and their beer cans all over the job site. You know, which which you do see sometimes at the lower end contractors. 00:28:06:11 - 00:28:15:02 Speaker 2 Or they do they. Look, this is the job site, well organized and supervised and does it look like a professional professional deal? Yeah. 00:28:15:03 - 00:28:44:03 Speaker 1 The other thing that I wanted to touch on is that, when preparing, whether it's, kind of a, a bid or a final proposal, a good contractor is going to give you allowances as placeholders for things that are not defined yet. So if you want to do a deck when you're doing that room addition, but you haven't specify the deck material or the exact size of it or whatever, or. 00:28:44:03 - 00:28:49:05 Speaker 1 Yeah, when you're doing your bathroom and you haven't picked your faucets out yet and you haven't picked your bathtub or. 00:28:49:05 - 00:28:49:20 Speaker 2 Countertops. 00:28:49:20 - 00:29:02:21 Speaker 1 Or you countertops, a good a good, contractor is going to give you reasonable allowances to cover those items. And you should look at those numbers and see if, if they make sense. 00:29:03:00 - 00:29:04:13 Speaker 2 Yeah. When we. 00:29:04:15 - 00:29:23:00 Speaker 1 I was consulting or I am consulting on a project, I don't know, $3 million house over here by Rice University and the builder. Of course, I get called in after it's kind of gone to hell. But the builder had given them a $30,000 cabinet allowance on a $3 million modern home. 00:29:23:05 - 00:29:24:11 Speaker 2 Oh, my gosh. 00:29:24:13 - 00:29:34:06 Speaker 1 And they didn't know any better. They didn't question it back when they signed the contract. But and and guess what the prices were when they, when they. Oh yeah. When it came time. 00:29:34:06 - 00:29:36:00 Speaker 2 Five times more than 100. 00:29:36:00 - 00:29:37:11 Speaker 1 And $80,000. 00:29:37:12 - 00:29:38:16 Speaker 2 Yeah. 00:29:38:18 - 00:29:44:19 Speaker 1 The builder budgeted Chinese import particleboard cabinets and they wanted walnut cabinets. 00:29:44:21 - 00:30:04:20 Speaker 2 You know, that's a very common complaint, both in remodeling and new construction is low balling on the allowances because people really don't know what you can get for $4 a square foot tile. And sometimes I've seen a dollar of square foot for tile material, which is like, you know, that's just dishonest to be to do something like that. 00:30:04:21 - 00:30:28:21 Speaker 2 So, and, and if the situation gets bad enough to be litigated, those unreasonably low allowances will backfire on the contractor and builder because they'll get an expert on the other side that says that's completely unreasonable, deceptive, and they really cheated him. It's deceptive. Exactly. So you got to have reasonable allowances in there and coach your client's on what's available. 00:30:29:00 - 00:30:47:06 Speaker 2 But at the same time, say, you know, you're going to have the freedom to select what you want and control your, your what you actually spend on this when you make your, your selections. But for right now, I put a reasonable amount of money in the bid so that your bottom line is there is a pretty realistic bottom line. 00:30:47:06 - 00:30:49:18 Speaker 2 That's what homeowners want. They want. So it's a realistic. 00:30:49:20 - 00:31:14:03 Speaker 1 I think, with the tools that are available to to consumers today, the internet websites like bild.com, you can easily go on there and see what a faucet that you kind of like costs a good range. So you can compare that to the allowances before you sign your contract and say, Mr. Builder, you have $250 budgeted for this faucet, but the ones that I tend to like are more than $500 range. 00:31:14:03 - 00:31:25:11 Speaker 2 Can I love it when people tell me that? Because it means that they're looking. Yeah. To get what they really want. Yeah. I know you don't have an argument later that you lowball the allowance compared to their taste. Yeah. 00:31:25:13 - 00:31:32:04 Speaker 1 I mean, I, I am continually shocked what people will choose, when they tell me they're on a budget. 00:31:32:06 - 00:31:34:01 Speaker 2 No kidding. 00:31:34:03 - 00:31:57:13 Speaker 1 You know, and so when they're given us budget, when we're doing design, you know, we're, we're always making assumptions about what their level of finish is, right? And then they'll come and pull out this the term that's popular right now is a bespoke. They'll can pull out this bespoke, kitchen faucet that's $2,500 when the allowance was 350 or something like that, you know. 00:31:57:15 - 00:32:23:14 Speaker 2 And then they kind of squeeze you, during the price negotiation process to and say, we really don't want to overspend. We are on this tight budget. And those same people who spent, you know, 45 minutes talking to you about how they don't want to spend very much once the job starts and they start really looking at fixtures, you know, they'll call you and say, I can't, I want this $400 toilet paper holder. 00:32:23:14 - 00:32:42:23 Speaker 2 And you're like, what are you? What would never imagine that. And this the rule is the rule of life is people will spend whatever they what need to on whatever they really want because they buy with emotion at the beginning of the process of trying to save money. But then it starts to happen. The construction begins and they get excited. 00:32:43:01 - 00:32:48:16 Speaker 2 So they, you know, money becomes much less of an object. Yeah. 00:32:48:18 - 00:33:13:09 Speaker 1 And allowances for a fixture don't always tell the whole story either, because, I like to use faucets as an example. A, bathroom faucet. That's a single whole deck mount faucet. Easy to install. You drill one hole, you pop it in. Right? But a wall mounted faucet is a whole nother story. Oh, yeah. Oh, well, sometimes there's a valve that has to go on the wall. 00:33:13:10 - 00:33:30:10 Speaker 1 You know, if you have a stone backsplash, you got to drill the holes for it to put through and your stone installers are going to charge for that. And it's going to probably be a higher, backsplash. So, people don't understand that when there's an allowance that that allowance also kind of has to have some specificity to it. 00:33:30:11 - 00:33:31:05 Speaker 2 Some assumptions. 00:33:31:05 - 00:33:43:07 Speaker 1 That this allowance is based on a deck mount faucet. If you do go to a wall mount faucet, great. But understand that you're also going to incur extra plumbing charges. Extra countertop charges you gotta get. 00:33:43:08 - 00:33:46:03 Speaker 2 Cost me more. So it's going to cost you more, Mr. Homeowner. 00:33:46:05 - 00:34:05:16 Speaker 1 Exactly. I, I in fact, I, I use this example the other day when, when Kenneth was here in the last episode, but I, I've taught this class before to contractors and I've said, all right, let's do an exercise. Close your eyes. And I want you to imagine a three foot by five foot powder bath. Right. A specification for a powder bath. 00:34:05:22 - 00:34:25:09 Speaker 1 What's in that powder bath in your mind. Right. And some people will just say, you know, install cabinet, install countertop, install faucet, install toilet. Right. All right, well, what kind of faucet, what kind of countertop. What kind of sink under mount top mount and what kind of flooring. What kind of, you know, is, is the faucet wall mount? 00:34:25:09 - 00:34:33:02 Speaker 1 Is there wallpaper? Is the cabinet particleboard. Is the cabinet solid walnut or some kind of green matched exotic wood? I mean, it's. 00:34:33:02 - 00:34:35:08 Speaker 2 Huge swing in cost between. 00:34:35:08 - 00:34:57:20 Speaker 1 Us. A powder bath can be $3000 or $30,000. And if you're is the contractor, if you're not specific on what it is that you're telling people it's going to be, your assumption might be $3,000 as a contractor because you're trying to keep the budget under control, but the client has this Italian hand painted wallpaper in their mind. Yeah. 00:34:57:21 - 00:35:19:12 Speaker 2 You know, you know, it helps so much to and sometimes we have to force our clients to do this. But to have our clients a safe house, images to an idea book for the different rooms of stuff that they like and write the description, write some details. What I like in this picture is that really cool countertop. 00:35:19:12 - 00:35:28:17 Speaker 2 But I hate the cabinet, and things like that. So that at least we have some idea of what's in their heads to try to avoid that mismatch. Yeah. 00:35:28:19 - 00:35:38:05 Speaker 1 But again, even doing that, if you're not specific in your contract, you know, there's just there's so much room for interpretation. Well you you didn't say I couldn't do that. 00:35:38:07 - 00:35:38:18 Speaker 2 Yeah. 00:35:38:19 - 00:35:40:18 Speaker 1 You didn't tell me it was going to be extra to do that. 00:35:40:23 - 00:35:42:17 Speaker 2 That's a common source of friction. 00:35:42:17 - 00:35:43:08 Speaker 1 How am I supposed to. 00:35:43:08 - 00:35:55:06 Speaker 2 Know different expectations? And homeowners, especially high end homeowners, the sky's the limit on how much ridiculous amounts they'll spend on things that you could never have anticipated. 00:35:55:08 - 00:35:58:05 Speaker 1 Especially when their sister is an interior designer. 00:35:58:07 - 00:36:03:06 Speaker 2 Especially then. Yes. Oh man. Yeah. 00:36:03:08 - 00:36:29:04 Speaker 1 The last thing I wanted to touch on is developing cost estimates and these these terms and how they relate to the different types of contracts. And I think you mentioned that a minute ago. So a cost plus contract, some people call it a time and materials contract. Yes. So materials cost plus whatever you want to call it. Presents its own set of pitfalls I think for contractors. 00:36:29:04 - 00:36:32:15 Speaker 1 Yeah, I've seen tons of conflict with cost plus consumer. 00:36:32:16 - 00:36:34:05 Speaker 2 Litigation with cost plus. 00:36:34:11 - 00:36:56:13 Speaker 1 There's usually a document included in there called an estimated schedule of construction costs, where at the beginning you need to present the homeowner with, hey, this is my estimated budget for this project. Yes. Right. But how do you handle when those line items vary? You know, when that when that framing goes from $80,000 to 100, $120,000. How is that handled? 00:36:56:15 - 00:37:13:15 Speaker 1 When again, going back to how it relates to allowances, you know, what happens when, you know, you made that schedule of estimated cost based on certain type of, fixtures, and then they pick something else, and now all the labor costs have gone up. So can you touch on that real quick? 00:37:13:17 - 00:37:38:06 Speaker 2 Well, you know, that's definitely a problem. With cost plus you have to keep track of everything very closely. And a lot of times the contractor just doesn't have the bandwidth to keep up with the paperwork. So what can happen is the homeowner will ask for something that pushes that line item way, way over, and they'll do an oral agreement. 00:37:38:06 - 00:37:55:20 Speaker 2 Yeah, I can do that. But the contractor doesn't pay for it and put in his next spreadsheet. You change this from this to ten times this and later on the homeowner will say, well, I didn't agree to that. I didn't know I was going to go that much over. I didn't know, I didn't know, I don't I mean, and it can be it can be a real problem. 00:37:55:20 - 00:38:13:19 Speaker 2 So I think Cost Plus just has so many little points for potential argument and disagreement that I totally agree. I've never done it, and I know people that do it very successfully, but it's not my cup of tea and legally I wouldn't recommend it. 00:38:13:19 - 00:38:26:14 Speaker 1 Yeah, we so we traditionally have not done them. We have two going on right now which have not been the most fun, that they've gone pretty well. But the, the burden of paperwork is, is very high on those. 00:38:26:19 - 00:38:46:20 Speaker 2 Yeah. If you can't, if you get it. I'm doing a couple of cases right now where labor cost plus by the builder. But they didn't keep receipts. So you know you really have to document the heck out of everything. Yeah. And your paperwork organization has to be excellent. So you're really not that good at that stuff. 00:38:46:20 - 00:38:49:20 Speaker 2 It's another reason not to do cost plus. Yeah. 00:38:49:22 - 00:39:03:11 Speaker 1 Thank God I've got two great ladies sitting down at the front desk who every piece of paper that comes in gets scanned and attached to the accounting software, and otherwise it would be just impossible to keep up with, in my opinion. I couldn't do it in our. 00:39:03:17 - 00:39:32:11 Speaker 2 Line of work, just has a ton of little transactions in it on every single job, and it's hard to keep up with that, especially for smaller remodel or smaller companies. You know, it's tough on some of the, remodelers, I've worked on cases with as, you know, a consulting when there's litigation going on, you know, you'll say, well, where do you tell me about what you do when you get a receipt from your plumber? 00:39:32:13 - 00:39:49:06 Speaker 2 And you'd be surprised how often they actually say it's on the dashboard of my car. Oh, yeah. Until the end of the job. And I'm sure it's intermingled with tons of other receipts from other jobs, and they couldn't tell the difference if they wanted to or under the seat. I think you start off on the dashboard. 00:39:49:08 - 00:39:49:22 Speaker 1 Thinking of something. 00:39:49:23 - 00:39:53:10 Speaker 2 Next comes along and they push them under the passenger seat in the driver's. 00:39:53:10 - 00:40:04:14 Speaker 1 Seat. I've been in so many contractors pickups where there's just like receipts spilling out of every window. You got the receipts in there with the skull cans and the and the Coke bottles and everything else. 00:40:04:14 - 00:40:25:03 Speaker 2 Yeah, very common image, unfortunately. Well, again, you might tell your clients, you know, if you are visiting with some other contractors to pre-qualify them, find a reason to go out to their truck and have a conversation where you can look into their truck, because that's what your house is going to look like during construction. 00:40:25:05 - 00:40:29:18 Speaker 1 Yeah. Or early in the truck if whoever is going to be running the job. The project manager. Yeah. 00:40:29:20 - 00:40:30:15 Speaker 2 Yeah. That too. 00:40:30:16 - 00:40:33:22 Speaker 1 Sure. Yeah. I mean, my car is clean, but some of the project managers may not be. 00:40:34:02 - 00:40:35:06 Speaker 2 Yeah. 00:40:35:08 - 00:40:52:10 Speaker 1 All right. So since, you know, you're you're an attorney, you're the legal eagle. We touched on it a little bit, but what are the the legal implications to using these, you know, estimate, quote, bid terminology, in your. 00:40:52:10 - 00:41:30:05 Speaker 2 Paperwork. You know, I think the, the main thing rather than the name is, how specific you're getting in terms of what you're promising in your contract. But like we said at the beginning of this discussion, if you do use the word estimate, it gives you some wiggle room that all aspects of the project are estimated, which would also include the time it takes and a variety of other things that it sort of a heads up that, there's there are lots of things about this, this transaction that are beyond your control or my control. 00:41:30:05 - 00:41:41:22 Speaker 2 So this whole thing is just one big all estimate, you know? You know what I mean? That sounds silly, but it's. Yeah, that's actually if if it went to court, that's it can be played that way and it would help you. 00:41:41:22 - 00:41:46:03 Speaker 1 So if you're giving advice to a homeowner in that regard, what would you say. 00:41:46:05 - 00:42:08:15 Speaker 2 That's give me rights to a homeowner? I'd say, yeah, you need to get a signed specific contract. And and if it's a medium to large medium project, maybe pick one of those middle of the road, the one that if it's something, it's a big project that's maybe north of $200,000. You can ask that it say proposal or formal proposal at the top. 00:42:08:17 - 00:42:19:03 Speaker 2 So it means that the builder really means it. And these included everything you can think of. So that's that's something that's helpful on the homeowner side. 00:42:19:05 - 00:42:40:05 Speaker 1 My advice for homeowners is to understand what it is that you're asking for, or to understand what the contractor is giving you. Engage with somebody who's going to take the time to understand exactly what it is that you want, and be prepared to pay for that time as a, as a professional, and make sure that you're getting a detailed scope of work. 00:42:40:07 - 00:42:43:17 Speaker 1 Make sure that you're not signing a one, a one page, document. 00:42:43:17 - 00:42:45:20 Speaker 2 Lumber yard estimate on the. 00:42:45:21 - 00:42:51:09 Speaker 1 Yeah, the lumber yard quote, whether was something slapped on the, you know, some language just kind of stamped on the top. 00:42:51:11 - 00:42:57:10 Speaker 2 You do see that? So who who are you saying should review the estimate contract for the homeowner? 00:42:57:15 - 00:42:58:12 Speaker 1 Well, I mean, 00:42:58:14 - 00:43:01:19 Speaker 2 Another builder or consultant or or who I. 00:43:01:19 - 00:43:04:09 Speaker 1 Think I think an attorney should review all contracts, don't. 00:43:04:09 - 00:43:09:17 Speaker 2 You? Sure. Yeah. But in terms of the the appropriateness of the scope of work. 00:43:09:21 - 00:43:36:15 Speaker 1 Oh, yeah. I mean, like that that is a service that, that we offer as an owner representative. And so, I mean, I, I always encourage people to get another opinion on, hey, do you think this is a complete and accurate depiction of what we're doing? I mean, you're the attorney is gonna review the contract portion, but most attorneys, you know, you could do it, right, but most attorneys aren't going to be able to look at your scope of work and say, well, obviously, whether or not that's appropriate or not. 00:43:36:16 - 00:43:51:08 Speaker 2 They don't even want to weigh in on that. So maybe, maybe both have an attorney look over it. For all the legal contractual aspects, especially things like warranty and payment terms and duration and things like that, but. 00:43:51:08 - 00:44:11:00 Speaker 1 At the end of the day, you're the one you, the homeowner, or the one who's been in the meetings with the builder, who's having the conversations. And so don't just blindly sign the contract, you know, like take the time and actually make sure that what's on the ear is lining up with the discussions that you've had and that you're not just assuming that, oh, you know, I told him that. 00:44:11:00 - 00:44:12:19 Speaker 1 I'm sure he remembers it. 00:44:12:21 - 00:44:41:11 Speaker 2 See, that's another that's another challenge for all of us in this process. We spend a lot of time as contractors and builders walking around the home with our with our clients, especially on the remodeling side. I guess, discussing possibilities. And people will mention things that maybe you didn't write down because they're talking so fast and moving you from room to room so fast that you just can't possibly catch everything. 00:44:41:12 - 00:45:01:10 Speaker 2 And you're right. Later on they'll say, never walking around. You promised this. And so, you know, in your scope of work, I think it probably says is the tab contract. The promise that you're making about the scope of work is limited to what is actually written into the specifications. And I go a little further at the bottom of my specifications. 00:45:01:10 - 00:45:21:18 Speaker 2 I have a line that says, this is what I bid the project off of. This is what I used for calculation. So if it's not on here, I have $0 in the bid for it. There's something I missed. Happy to add it, but if it's not in here, I haven't priced it. It's not included. Yep. And that saved me a few times. 00:45:21:20 - 00:45:30:19 Speaker 2 Yeah. When somebody did that they said you you said you were going to do X. Yeah. But so many, so many facets to this. It's hard to record it all. 00:45:31:01 - 00:45:52:02 Speaker 1 In in our specifications document right at the top, the very first paragraph and kind of our general conditions. I have something to the effect of I remember the exact language, but something to the effect of, if if an item is not specifically listed in these specifications, do not assume it is included. In fact, assume it is not included. 00:45:52:07 - 00:45:53:08 Speaker 2 Yeah. Good. 00:45:53:10 - 00:46:07:20 Speaker 1 It's good. And so I've had quite a few, clients who because it's one of the first things that you read, on the specs document and I've had people stop and say, well, I think I should read this in detail, shouldn't I? I'm like, yes, you should. 00:46:07:22 - 00:46:10:01 Speaker 2 Yeah, they should. 00:46:10:03 - 00:46:40:09 Speaker 1 Yeah. So, again, advice for homeowners. You know, you're the one who's been having the conversations. Double check that that paperwork. Make sure it lines up with what your expectations are during the project. If you're communicating with your project manager, builder, during the project, on a walk through, kind of also, don't assume that he's remembering every single thing that you're telling him, you know, recap it in an email or, you know, we use a project, we have a project management software. 00:46:40:11 - 00:46:58:20 Speaker 1 We ask all our clients to send all their communication through the software or, yeah, in fact, we tell them, hey, if it if that comment is not in the software, the conversation never happened. So if you have a kind of a face to face conversation, either you or the project manager should just take a few minutes and document that conversation. 00:46:58:20 - 00:46:59:09 Speaker 2 And. 00:46:59:11 - 00:46:59:21 Speaker 1 Say. 00:46:59:21 - 00:47:02:11 Speaker 2 Hey, moralize it. In writing in the software. 00:47:02:11 - 00:47:14:16 Speaker 1 I met Joe Homeowner on site today. We talked about X, and that way six months from now, when he said, hey, we talked about, doing that and don't you remember. 00:47:14:18 - 00:47:24:08 Speaker 2 To put another switch over there? You don't remember that never happened. A good way to do it. Well, that's good clarity for the homeowner and the contractor as well. Yeah. 00:47:24:10 - 00:47:43:16 Speaker 1 I unfortunately I have to I have a meeting after this, podcast recording with the homeowner, with this exact, scenario. He, he had a conversation on the job site with my project manager, and this is a new construction, you know, nine, ten months ago. 00:47:43:18 - 00:47:45:01 Speaker 2 Yeah. 00:47:45:03 - 00:48:01:04 Speaker 1 And neither one of them wrote it down, and he sent an email today and said, I told you I wanted X, and I said, I you know what? I searched our project management software. I did a keyword search for that for that item, and I, I couldn't find that anywhere. Did you document. 00:48:01:04 - 00:48:03:19 Speaker 2 That? Yeah. Show me your documentation. 00:48:03:22 - 00:48:12:12 Speaker 1 And but yeah. So anyway, we're having a come to Jesus meeting this afternoon about why isn't that installed in my house if you know. 00:48:12:14 - 00:48:16:05 Speaker 2 Well, you've got it covered in your contract. If it's not, there. Didn't happen. 00:48:16:07 - 00:48:34:04 Speaker 1 Exactly, but it's still a painful conversation to have. So, you know, I jumped on my project manager about, you know, why didn't you document that? You know, I also pointed out to the homeowner, you know, we told you that you needed a company to communicate through our software, so, but it doesn't make it any easier. You still have to right now. 00:48:34:06 - 00:48:43:10 Speaker 2 And sometimes for the sake of, you know, keeping the relationship healthy, you'll have to do it and split the cost or something. If it's really going to cause more damage than it's worth. 00:48:43:13 - 00:49:00:12 Speaker 1 Yeah. I mean, essentially what I told him was, hey, you would have paid X if we had done it back then, so I'm not sure. I'm just going to charge you X now, and I'll absorb the cost to make the couple of tweaks to the drywall or whatever that would have to be made to do it now. 00:49:00:12 - 00:49:05:07 Speaker 1 So you're not going to pay any more than you would have paid ten months ago. This is more of a more of an inconvenience. 00:49:05:13 - 00:49:37:12 Speaker 2 You know, this brings up another item that homeowners need to walk the construction more carefully, looking around more carefully, too. So I've had clients that, waited until we were texturing sheetrock on ceilings to tell me they didn't like the way the can lights were arranged. Well, that's a pretty easy thing to fix when the ceilings open, but it's not when you've got drywall tape floating in your texturing, it's expensive to go back and demo all that out and redo it. 00:49:37:13 - 00:50:04:19 Speaker 2 Yeah. So some, some guys have a contract clause that says each time you pay me a draw, you are ratifying the work that's been done up to that point. Yep. They weren't your responsibility to look at it. And you're giving it a checkmark and saying, I approve that work. So if those sheetrock has to be taken off later because you don't like the can lights, locations, then that's fine. 00:50:04:19 - 00:50:27:20 Speaker 2 But it's going to be a change order. No. And sometimes you'd have to. Well, if you take the sheetrock off and you remember that, or you see that the candle lights were a little out of alignment because of framing and ductwork and pipes and stuff that you had to work around. And homeowners definitely forget that, which is another good reason for the contractor to take a lot of pictures and the homeowner to. 00:50:27:22 - 00:50:31:23 Speaker 2 For cover ups. Really important stage to take pictures. I. 00:50:32:03 - 00:50:57:08 Speaker 1 I, I'm doing some consulting for a as a owner's rep for a new build with a, we'll call my semi-custom home builder. That's a pretty big regional builder around here. And I was really impressed, a couple weeks ago. They, they have a pre drywall walkthrough with the homeowner. It was very detailed. In fact, I'm going to try to get a hold of their document and copy it. 00:50:57:10 - 00:51:16:15 Speaker 1 But it was the project manager and his and an assistant from the builder walked through with the homeowner and me, and he pointed out every single light switch, every single can light. He went over the function of the water heaters and the air conditioners and showed them how all the ducks were running. And this is where the filters are. 00:51:16:15 - 00:51:35:09 Speaker 1 And here's the thermostats. And all right, it was wonderful. It was almost like a like a final, you know, hand off walk through. But it was happening pre drywall. And then after that walk through he had them sign a form saying that they were okay with the placement on everything. And I thought brilliant. I thought it was fantastic. 00:51:35:09 - 00:51:36:06 Speaker 2 Yeah it's brilliant. 00:51:36:06 - 00:51:40:15 Speaker 1 So I wish more more people would implement something like take that. 00:51:40:15 - 00:51:46:10 Speaker 2 Yeah, take the time to do that. Doesn't take that long unless it's a massive. Yeah. 00:51:46:12 - 00:52:02:06 Speaker 1 This is a good 8000 square foot house. So we were there for most of a day. Yeah, but but, you know what? I think it was worth it. I was getting paid by the hour, so of course I thought it was worth it, but. But, yeah, no fear for the homeowner. I thought it was very it was very worthwhile. 00:52:02:06 - 00:52:03:20 Speaker 1 And for the builder, it's really covering his. But. 00:52:03:21 - 00:52:06:05 Speaker 2 Yeah. Yeah. And. Good. Good idea. 00:52:06:05 - 00:52:11:04 Speaker 1 Well, you got anything else you want to touch on? Regarding quotes and bids and estimates and proposals? 00:52:11:05 - 00:52:44:07 Speaker 2 I, I just think, I would as a final conclusion for homeowners to make sure that they review the contracts, especially the specifications and the regardless of what the name is at the top. And be sure that they have a full set of construction documents before they sign and start work, especially on the scope, because they can assess by reading that whether they're getting the chandelier count that they wanted and and the things that they wanted at it. 00:52:44:07 - 00:52:50:17 Speaker 2 So, just be more careful, spend a little more time reading the scope before you sign. 00:52:50:19 - 00:52:56:15 Speaker 1 Yeah. And if if there's some terminology that the builders using that you don't understand, ask what that means. 00:52:56:17 - 00:52:57:19 Speaker 2 Yes. Ask questions. 00:52:57:19 - 00:53:13:22 Speaker 1 That's another bit. That's another big, debate. People have, as you know, contractors we have our own terminology. There's industry terminology that the average person may not know. And we like to throw that in our contracts sometimes just because we're comfortable with it. They don't know what that means. 00:53:13:22 - 00:53:17:11 Speaker 2 Yeah. They almost need a glossary of construction terms. 00:53:17:13 - 00:53:20:17 Speaker 1 We should create a contract glossary. It's not a bad idea. 00:53:20:17 - 00:53:25:07 Speaker 2 Yeah, it's not a bad idea. That's, I'll finish what you start. 00:53:25:12 - 00:53:41:22 Speaker 1 Okay. Sounds good. Well, Dan, thanks for for joining us today. Really appreciate it. I'll be sure to link this with everybody, your, your website and, yeah. So they can find you if they want to talk to the legal eagle or for you as an expert witness or as a consultant or whatever and whatever hat. 00:53:41:22 - 00:54:12:05 Speaker 2 Well, I appreciate that. So I have two websites, the one for my construction companies, Legal Eagle contractors.com. Very simple. Been in business for 45 years, so now we've been around for a long time and have a lot of free, informative content on the website you do for homeowners. And then my, expert witnesses, Dan Borden expert witness.com is has the types of forensic work that I do to resolve disputes that come up between homeowners and contractors. 00:54:12:07 - 00:54:13:12 Speaker 2 So thank you. Yes. 00:54:13:12 - 00:54:32:10 Speaker 1 You're welcome. Thanks. Thanks for coming on. And, you know, I'm continually impressed at all the, the, the knowledge and information that you give away. And you've been so involved in you, too. So involved in the Nahb and the GBA over the years. And, you know, you've you've benefited a ton of contractors. So I really appreciate that. 00:54:32:11 - 00:54:39:01 Speaker 2 I'm just paying it forward because I've gotten a lot from those organizations. And the wonderful builders that I rub shoulders with. Like you. 00:54:39:01 - 00:54:46:04 Speaker 1 Curtis, I thanks, Dan. All right. And thank you everybody for listening to this episode of the Your Project Shepherd podcast. I hope to see you next week. Bye bye. 00:54:46:09 - 00:54:53:12 Speaker 2 Bye. 00:54:53:14 - 00:55:17:16 Speaker 1 If you found this helpful, enjoy listening. Please support us by liking and subscribing here on your podcast platform. And also join us on our YouTube channel. We want to continue to bring you high quality content and expert guests, and your support truly helps us to continue this journey. If you have any questions for me or my guests or any feedback for us, you can email us at podcast at your project shepherd.com. 00:55:17:18 - 00:55:18:10 Speaker 1 Thanks again.