After getting several proposals for an HVAC install, there are two companies that we feel most comfortable with. However the project is really stretching our budget. Their estimates are roughly 25% more than the lowest proposals we got. What kind of wiggle room can we expect without offending them? What are you (as a contractor) usually willing to negotiate these days?
Negotiating room?
killwhat
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After getting several proposals for an HVAC install, there are two companies that we feel most comfortable with. However the project is really stretching our budget. Their estimates are roughly 25% more than the lowest proposals we got. What kind of wiggle room can we expect without offending them? What are you (as a contractor) usually willing to negotiate these days?
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You think a pro...on a professonal message board will admit the being willing ot negotiate.
From what I've seen, they won't move much. If you competitvely bid and they know you got more than one quote, they will normally go as low as possible but still hit their target net margins.
GO back through each wuote and try and explain the 25% difference. Is it just a less popular brand? Are they leaving soemthing out in the installation?
Sometimes a company costs more because they spend more money on equipment, training, better quality materials for installation and the equipment they sell carries a premium.
From what I've seen, they won't move much. If you competitvely bid and they know you got more than one quote, they will normally go as low as possible but still hit their target net margins.
GO back through each wuote and try and explain the 25% difference. Is it just a less popular brand? Are they leaving soemthing out in the installation?
Sometimes a company costs more because they spend more money on equipment, training, better quality materials for installation and the equipment they sell carries a premium.
Our proposals are thought out and complete. We know what we have to make to stay in business. 25% is a sizable difference and there will be a reason. Higher grade equipment, extras included in the proposal that are missing in the other, etc. Sometimes company overhead can be a factor but most companies stay abreast of their competition and strive to stay competitive. Go over the proposals you have with the companies you want to use and figure out where the differences are. Make sure the prices are completion prices with permit fees and taxes included as well as any extended warranty costs.
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They will negotiate if you will.
For example, what corner will you let them cut to or what part of the job are you willing to do without?
We negotiate all the time:
"Why yes Mr. Smith, I can lower the price $500, however Your labor warranty just went from 5 years to 1 year."
"Sure I can drop the price, which accessory would you like to eliminate?"
We are not selling used cars, we are selling merchandise at retail prices just as if you would walk in a store and buy it off the shelf.
You can shop on Rodeo Drive or you can shop at Main Street, USA...that's up to you, just remember, you get better stuff on Rodeo Drive
For example, what corner will you let them cut to or what part of the job are you willing to do without?
We negotiate all the time:
"Why yes Mr. Smith, I can lower the price $500, however Your labor warranty just went from 5 years to 1 year."
"Sure I can drop the price, which accessory would you like to eliminate?"
We are not selling used cars, we are selling merchandise at retail prices just as if you would walk in a store and buy it off the shelf.
You can shop on Rodeo Drive or you can shop at Main Street, USA...that's up to you, just remember, you get better stuff on Rodeo Drive
All companies are actually offering what I believe to be quality brands (American Standard and Carrier.) are accredited by the BBB and have outstanding ratings and also members of ACCA. One company left an enigmatic sheet with their proposal (24 months zero percent financing or cash rebate on installation) so obviously their price is not that firm. Another gave me a ballpark estimate for the install when they initially visited the house. I think I must have made a face when I heard his initial estimate. The contractor asked me what my budget was since I seemed to be unsettled by his ballpark estimate. Well when I got the official estimate in the mail, he was within $250 of my stated max budget and 15-31% lower than his ballpark estimate. One other company already offered a discount if I book by the end of May. So...
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Since you are looking at an installed product, not a TV or car, there are ways we can cheapen the job without you knowing it. So they could come down but they could also do shortcuts you don't even understand. So best bet if you want to buy from one of the more expensive ones, pay it and feel confident you are getting the best possible job.
I don't know how many times I've heard a salesman say recently: fast install, this guy beat me down on price! While our guys won't compromise an install quality, there are some fit & finish things that could suffer if they are being beat on time because the HO was wanting a lowered price.
I don't know how many times I've heard a salesman say recently: fast install, this guy beat me down on price! While our guys won't compromise an install quality, there are some fit & finish things that could suffer if they are being beat on time because the HO was wanting a lowered price.
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Right. The fees the BBB charges a company to "earn" better ratings can be high. But that's a topic for a different thread.
we give our customers a "good", "better", "best" type proposal. the difference between good and best can be thousands of dollars depending on the equipment. no wiggle room on the install though. if you cut corners on an install you WILL pay for it down the road.
Just to be clear, I got five quotes, all from companies with A+ ratings on the BBB. There's a 25% difference in price between the lowest and the highest proposal. I find that rather substantial considering the equipment quoted is all similar quality brands and models.
Similar equipment is not necessarily the same equipment, are you comparing apples to apples? You say that you feel more comfortable with these 2 contractors. Is it possible that's why they are higher, sometimes you must pay more to get the service and quality that you desire. I'm typically from the middle of the road to the highest but I always take extra steps to ensure a quality install and DO NOT budge on my pricing. By lowering my price I admit I was too high. When you go to work everyday, do your bosses negotiate your pay?
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same here.
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What do you do for a living sir?
I don't mean to offend anyone by the premise of this thread. In my line of business (publishing), negotiating is done on all levels and all the time. Anyway... Understand that before I posted this thread, 3 of the 5 companies I solicited for an estimate (I'm still waiting on one estimate) have shown their willingness to negotiate and made that clear without me even hinting at it. Interestingly, the lowest estimate is the only one that hasn't mentioned any wiggle room in his price.
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