flexiblefullpage - default
interstitial1 - interstitial
Currently Reading

A Stressful Purchase: Remodeling in Times of Uncertainty

Advertisement
billboard -
Business

A Stressful Purchase: Remodeling in Times of Uncertainty

How should remodelers react to anxious consumers? Director of Content Erika Mosse shares her experience


By Erika Mosse August 4, 2022
stressful
Photo courtesy nenetus | stock.adobe.com
This article first appeared in the July/August 2022 issue of Pro Remodeler.

Our place is too small, and so about a  year ago, my husband and I decided to put in an addition. Nothing fancy, just a 10x12 room so he has a place to work and a 5x8 bathroom with a tub, but no shower. Like every standard homeowner, we called three remodelers: two of them I knew personally and one was a referral from a friend.

I am no stranger to this industry and expected the bids to be high, but it wasn’t the prices that surprised me. It was the variance. Granted, these were fairly casual estimates—there was no design agreement or anything—but the difference between the lowest bid and the highest one was $170K, more than half the total project price.

Both of us were left anxious and confused.

Was the highest bidder ripping us off? Was the lowest one pulling a bait-and-switch? Should we hire the middle one because, well, he was in the middle?

We ended up doing nothing and becoming ever more cramped in our tiny place. Fast forward to today. We sold some investments to free up cash, and are once again planning the project, expanded now to encompass a new garage and ADU.

The difference between the lowest bid and the highest one was $170K, more than half the total project price.

My point in telling you all of that is this: Most areas of the country are facing a softening market. There’s a variety of reasons for the slowdown, but inflation is a big one.

In one recent study, 85% of respondents considering a remodel agreed that “Inflationary pricing right now puts supplies and labor costs out of reach on my budget.” Homeowners are anxious about the economy, and anxious people generally don’t want to spend money. Nor do people who feel uninformed.

So what’s the answer?

How does a remodeler help a homeowner get comfortable enough to make such a large purchase? First is to explain the reasoning behind the pricing. Inflation is widely publicized, but how that relates to material and labor costs is important. It’s helpful to present facts.

Industry expert Mark Richardson recommends reminding clients that prices never go down long-term. That helps clients feel they are making a good investment today and that waiting will only make it more expensive (This is exactly what’s happening to us).

In addition, I am a fan of transparency in estimates, and while this can be a contentious topic, I believe now is an especially good time to be open with homeowners regarding your numbers.

While the bids we received were fairly informal, in all three cases, the next step was investing in a design agreement. It would have helped our willingness to commit if we had been given more detail on the logic behind the figures we received. I certainly could have asked but didn’t want to feel pushy.

As my husband and I embark on our project for the second time, I remain mindful of two things: the remodeler’s need to maintain their margin, and my own need to be a good steward of our resources. We are entering a time of consumer anxiety.

The best way to counter that is with information. Homeowners who see their remodeler as a trusted partner make the best clients. 

 


written by

Erika Mosse

Director of Content

Erika Mosse is the director of content for Professional Remodeler. Contact her at emosse@sgcmail.com or 972.369.9212.


Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and email addresses turn into links automatically.
  • Lines and paragraphs break automatically.
leaderboard2 - default

Related Stories

How to Create a World-Class Remodeling Team

Great remodeling companies position themselves for the future with the right players

How to Increase Your Odds of Closing Remodeling Sales

Use these tips to hone your sales process and grow close ratio

Everyone Should Have a Number: KPIs for Your Design Build Team

Measuring key performance indicators guides your team to success while creating accountability and ownership

Becoming Profitable in Your Remodeling Niche

The 2023 NAHB Remodelers Chair shares insights and advice for contractors in our 2024 Thought Leader predictions series

 

Combat Remodeling Market Pullback with Increased Marketing

Mosby Building Arts' president shares his expert predictions and approaches to remodeling in 2024 for Pro Remodeler's Thought Leader predictions series

4 AI Tools for the Content Creating Contractor

Let artificial intelligence do the work

A Mindset of Serving Others

A research study shows surprising results about what makes us take ownership of our work.

4 Surprising Home Improvement Trends for 2024

Leaf Home CEO Jon Bostock offers insight on topics and trends that will impact the home improvement industry this year

Preparing for an Uncertain 2024

Here's how remodelers can prepare for unpredictable market

4 Steps to Prep Your Business for Contraction

How a remodeling company plans ahead for the worst of times (and the best of times)
 

Advertisement
boombox2 -
Advertisement
halfpage2 -
Advertisement
native1 -

More in Category




Advertisement
native2 -
Advertisement
halfpage1 -
Advertisement
leaderboard1 -