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Michael Stone: Doing Things Wrong

A homeowner who wants to do the right thing asked how to handle a difficult situation.

Hi Michael,

I want to apologize and say thank you for your time before you read this long email.

So basically, I want to do the right thing and the situation is my fault, but at the same time I feel like it’s not right to be taken advantage of.

I have 2 contractors, one for the bathroom/kitchen and one for the exterior. I originally asked the contractor to quote me on the kitchen, he said somewhere between 20 – 30k, as I didn’t have a full plan made up.

The contractor I’m using for the inside came a couple of weeks later on and he said the exterior was a good price, but fair and that he wouldn’t be able to match it and he wasn’t interested in it. He asked what quote I had for the kitchen, I said between 20-30k, and he says no way for kitchen. So, I trust him (my fault). He goes on and came to a price for 120k for the whole 1st floor, demo, floors, stairway and electrical. My house is a cape style house about 800sqft for the 1st floor. I say ok. He writes the contract, I sign it.

I was going to get a home equity loan but couldn’t get it. So, he verbally changes the contract for just the bathroom and kitchen. 10k for the bathroom and 53k on the kitchen.

He tries to get me to do at least the living room and hallway for another 30k. Living room is 220sqft and hallway is about 50sqft. I said I would think about it but handed him a 25k cash deposit.

Next day I talk to my contractor for the outside and told him what he was going to charge and what he has charged and what I have given him. He basically said I was getting taken advantage of and I should call him and get the money back.

I called him to see if I could get the money, he said he only had 5k left and I should’ve called in the morning. He said placed the order for the cabinets and paid the demo crew. Mind you he didn’t give me a price breakdown, but my cabinets are no more than 6500 before his markup and demo crew shouldn’t be more than 1200 from what I was told.

Shouldn’t he have put the money in an escrow account and not be touched until a substantial amount of the project is completed? The contract is more of a proposal with no outline of payment schedule, price cost for each room. He also never gave me the consumer notice of 3-day cancellation when I originally signed.

So I want to have him complete ‘25 grand’ worth of work and then terminate the contract as it seemed to be voided by his lack of verbiage and how he didn’t put the money in the account and didn’t tell where the rest of the money is.

Is this right of me? Again, I want to do the right thing, but I don’t want to get taken advantage of.

Thanks for getting back to me. This is all new to me and getting this work done has been a long time coming. It’s my mom’s house and we needed this work done a long time ago but didn’t have the means to do it until recently, and I guess emotions got the best to me and was just eager to start this. Again, I appreciate your time.

These are the worst kind of notes to get. It’s painful to see people who don’t know better get taken advantage of by those who do or should know better.

I advised him to get an attorney, the sooner the better. Because the contract was signed in his home and the interior contractor didn’t provide the federally required Right of Rescission, he should demand a full refund. It doesn’t matter how much work he’s done or what materials he’s ordered, the agreement isn’t valid. I advised he put the brakes on the entire project because moving forward now will just cloud the waters.

I’m not impressed with either of these contractors. It’s obvious the interior contractor is looking for work and pressuring the homeowner to do more than he can afford. He sounds like the type who would demand even more money or disappear before the job is done.

As for the exterior contractor, why didn’t he want to take on the entire project? It’s never appropriate to comment on the prices of another contractor. The exterior contractor did the right thing suggesting that the homeowner was possibly being taken advantage of, but the issue wasn’t the price, it was the business practices of the other contractor.

I don’t like getting notes like this. These are the situations that make contractors look bad.

This homeowner was ready and willing to have a job done. If he’d called an honest, responsible contractor in the first place, he’d be on track to getting whatever level of work he could afford with the money he has, and both the contractor and the homeowner would come out ahead. Instead, in this situation, no one will win.

Use honest business practices, write complete contracts with a right of rescission, do what you say you’re going to do, and everyone wins.

Listen to the audio here, or select the dots on the right to download:

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