PRICE DISPUTES - WHAT CAUSES THEM, HOW TO AVOID THEM
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Home repair contractors get a bad name with many people. All too often it's deserved. Certainly there are bad guys out there preying on the public, along with plenty of others who mean well but just don't have the skill or wherewithal to operate professionally. But the majority of disputes between home owners and contractors result from avoidable misunderstandings.

Price disputes are the most common cause of arguments between contractors and customers. Probably nine out of 10 disputes revolve around money. People usually end up paying more for a job than they thought they would. When that happens, naturally they feel like they've been taken.

Let's examine some of the typical situations that arise to cause such misunderstandings.

Scenario #1 - Living in an inflationary world. Fortunately, a major home repair is not something that most home owners experience every day. So they tend to think back to what it cost them for similar projects in the distant past.

We don't notice it when the price of bread doubles over a five or 10-year period, because we buy bread all the time and the increases occur gradually. But imagine that for some reason you only went shopping for bread once every five years. You'd be shocked at how much more expensive it is today than the last time you bought a loaf.

The cost of operating a home repair business goes up even faster than the cost of producing a loaf of bread. Not only do home repair firms experience normal inflationary increases in supplies, equipment, tools, etc., we are also constantly bombarded with new regulatory mandates.

For example, until 1992 it was a simple matter to dispose of used refrigerant gases from air conditioning systems and refrigerators. Service technicians simply vented the gases to the outside air. Now that is illegal. A contractor can be fined $10,000 per occurrence for violating this rule. So we have been forced to purchase expensive containment equipment and put our service technicians through special training in order to comply with EPA regulations on the handling of ozone-depleting refrigerant gasses.

This is just one example. Federal, state and local governments continually impose new regulations on small businesses pertaining to jobsite safety, driving safety, pollution control, recordkeeping, etc. This is not a complaint. We are law-abiding citizens willing to comply with any regulations that get imposed on us by our fellow citizens through their duly elected or appointed officials. We merely ask public understanding that no business can survive if it continually absorbs extra costs. We must pass them on in the price of our goods and services.

Scenario #2- "But the other guy does it cheaper!" Unfortunately, the "going rate" for many home repair services tends to be set by the least professional operators. The most frustrating disputes from a contractor's perspective is when a home owner calls back after a job has been completed to complain that s/he got ripped off! Usually this happens when s/he talks to another contractor who claims that the job should have cost much less.

Think of how unfair it is for someone who hasn't seen the problem to determine how much it should cost to fix it. Frequently the critic chides the homeowner for not having given him a call to fix the job. "I would have saved you lots of money," goes the siren song. Maybe the home owner tried to call him but could get only an answering machine. Then he has the nerve to criticize someone willing and able to tackle an emergency repair on the spot.

Some contractors operate cheaper than others by cutting corners. They pay low wages to marginal workers, use inferior tools and equipment, and perhaps skip paying for licenses and adequate insurance. We know, for instance, that many air conditioning mechanics routinely ignore the EPA restrictions against venting CFC gasses to the atmosphere.

In the end, you get what you pay for. Perhaps for some small jobs it is worthwhile to seek out the marginally skilled neighborhood handyman. But when it comes to any project involving electricity, volatile fuels or the purity of your household drinking water, surely you want to do business with a professional company that employs well-trained technicians and complies with all applicable laws and regulations.

Scenario #3- "The job took much too long. You knew the meter was running!" This accusation is a common one with contractors who operate on a time and material billing basis. Sometimes it's even true. When work gets slow, the temptation is great to stretch out a job. This isn't to say that everyone does it. But where there's temptation ...

Many progressive home repair firms have turned to a flat rate pricing system. The service technician will do a thorough inspection of the problem, then quote a precise price to fix it. If you agree to have the job done, that price is what you pay no matter how long it takes.

It requires a lot of professionalism to operate this way. The contractor must have a good handle on his costs and technicians skilled in diagnosing problems as well as fixing them. Companies able to pull it off virtually eliminate the "meter running" dispute.

Scenario #4- "But the job took only 15 minutes!" Flat rate companies sometimes run into this problem instead of the "meter running" scenario. The customer agrees to pay a quoted price for a repair, then becomes dissatisfied when the technician finishes the job in a short time. Sometimes the job might cost several hundred dollars but take less than an hour. It's a natural reaction for home owners to feel like they haven't gotten their money's worth.

Two things need to be kept in mind: first, any price must account for travel time as well as that spent on the job; second, you are paying not only for the actual labor involved, but for the knowledge of that technician. A given repair might only require replacing a simple little part. But the contractor must pay the service technician skilled worker wages for knowing which part to replace.

It's analogous to a doctor's visit. Most of us at some point in our lives have gone to a doctor for what turned out to be some minor ailment. We may have been stunned to pay a hefty fee merely to have him prescribe some bed rest and a couple of aspirin. But when we made the appointment, we didn't know it was a minor ailment. What we really paid for was the doctor's ability to tell us what was wrong. And for the confidence we had in that doctor to be able to identify a serious medical condition.

Service technicians go to school almost as long as doctors to learn their trade. And like members of the medical profession, they undergo continuing education to keep up with new technology in their field. Don't make the mistake of equating the time spent on the job without considering the quality of that time.

Scenario #5- The price of people skills. Our final scenario has to do with a shortcoming that exists with many service technicians-the inability to adequately communicate the nature of a problem and what it takes to fix it. Many speak in technobabble or otherwise lack people skills. Many disputes arise from this.

Progressive contractors put their service technicians through customer relations training as well as technical training. You as a customer have every right to expect the technician who shows up to treat you with respect, and to be articulate enough to explain what they are doing in a way you can understand.

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