Who Should Buy the Materials? The Customer or the Contractor?

This topic comes up a lot on the BiggerPockets forums, so I thought it might be a good idea to use an article of its own to get a concise train of thought from one experienced person.

So what’s my experience?I general contractor (GC) has worked for decades in a very wealthy town in Southern California and also holds several other licenses in industries such as pool construction, plumbing, concrete, and interior design.

whether the contractor is suitable for the selection of materials and finishes;

It’s common for customers to want to choose the finish of their design. You’ll want to choose not only faucets, toilets, and shower heads, but also electrical equipment such as area lighting, pendants, and plumbing fixtures.

They will choose these with my blessing because I really don’t want to get involved in such personal choices. Of course, I base my opinions on my experience with the quality and durability of a particular type of appliance, or even a particular brand or model.

The same applies to cabinets and countertops. It should absolutely be the customer who chooses these. With countless colors, species, and materials, it’s an important and difficult decision for everyone, and GC doesn’t want to take on this responsibility.

Again, give your opinion on the type of wood, i.e. which is harder and more durable, the material of the countertop, stone, tile, etc. Which is more durable, absorbs sealers better, lasts longer and retains its shine? I recommend avoiding certain types of stone that last for a few years but then start to deteriorate (some types of granite have this problem). It is precisely my decades of experience that makes customers choose me over newer/younger contractors.

But customer involvement in the process needs to stop there. In some cases, certain types of customers may want to order products themselves. This is usually because they think it will save them money. Sometimes they say the dreaded words, “I want to earn points on my credit card.” This is a short-sighted attitude, trading control of a project for just a few dollars or a few miles. This is where a good, experienced GC steps up and just says no.

Many people new to the construction industry, whether investors or just homeowners, don’t understand why it makes a difference who pays for the materials. Let’s talk about that now.

Why contractors need to control materials

It is a fundamental fact that the GC is, should be, and must be the “king” of the field. It’s not a matter of ego or personality. Simply put, having ultimate control over a project is essential for it to run smoothly and ultimately finish on time and within budget.

The GC must oversee schedules, subcontractors, their staff, building inspectors, city planning departments, OSHA, federal and state laws, site security, neighbors, materials, and make sure everything runs seamlessly. . Remodeling (or new construction) process.

When all sides shift to someone else’s playing field, new accidents are waiting to happen. In other words, any aspect of a project that a contractor loses control over is another one, among hundreds of moving parts, that can and will fall into Mr. Murphy’s wheelhouse.

What Happens When a Contractor Doesn’t Control Materials

Let me give you an example from my own past. The customer ordered finishing materials, furniture and fixtures from Italy.

We have reached a point in the process where these items were needed and are needed to keep the crew and submarine moving forward as planned. At that time, I was informed that: These are shipped from Italy. They were scheduled to be here a week ago but were told there would be a two week delay. ” In reality he was delayed by a month and the project was partially halted for reasons such as the construction required Part A to be installed before Part B.

This is not about raising prices

Every contractor I know has a story about what happens when a customer tries to engage with materials. They always seem to think they can find it cheaper and save on the markup.

However, this “markup” is widely misunderstood by the public. It usually doesn’t actually exist. Good, long-standing general contractors have favorite vendors, but they are usually not big-box stores.

From windows and doors to electrical and plumbing, the GC has likely purchased hundreds of thousands of dollars worth of products from these vendors. Therefore, volume prices are set that cannot be afforded by general consumers. We then add a percentage to this special price to compensate for this variation. This is explained next.

Customers/Investors never think about this

So, let’s say (for example) an investor insists on choosing and paying for his product for a renovation, and a young contractor foolishly decides it’s not worth discussing. And they really need the job. Investors can call home improvement stores to order materials or send a list to a contractor and have them pay for the materials with a credit card (and earn valuable points).

Okay, great. Why does that matter? Well, let’s examine this. Who will do the next much-needed task?

• Load materials into carts in the store.
• Load them into the truck.
• Please drop it off on site.
• Keep them in a safe place in the house that is already partially demoed or will be partially demoed.
• Provides security for the duration of the project.
• Please return the wrong item, such as the wrong color, size, brand, or misfit.
• If the product is damaged or malfunctions during the warranty period, we will provide warranty service.

We all know customers don’t do this. Customers will expect contractors to do all of the above. And if the contractor expects to be paid for performing all of these important, necessary and important tasks, they will be furious.

Examples of when customers can be involved in material processes

Having spent all this time disrupting the concept of the customer being involved in the material process, we need to get into a situation where the customer can and should be involved.

Most large cities have supply facilities attached to plumbing and electrical warehouses, whose vast areas offer a large sample of products, including dozens of sinks, bathtubs of all kinds, and the latest and greatest modern toilets. It is on display. Other facilities (e.g., Pirch in Southern California) that feature two- to three-story facilities with kitchen areas, bathroom areas, outdoor living areas, etc., and allow customers to walk there and walk around the entire store. ) Here you can get an overview of all the products available on the market today. They will assign you and the customer a representative to facilitate the process, babysit the customer as they select and purchase products, and even provide lunch.

Yes, I said that the vendor should select and purchase the product. So why do I say it’s okay in this case?

Because the GC is still in control. Since GC dispatches many customers every year, the company’s personnel basically work for GC. The representative will ensure that the customer has selected the materials that GC approves and wishes to install. Although GCs do not necessarily receive monetary kickbacks (although they may occur), they are compensated in other ways.

final thoughts

Therefore, you can see how important it is for a general contractor to have full control over a construction project, especially the management of materials and supplies. Some of these are done automatically, such as wires used by electricians and pipes used by plumbers. However, even if a well-intentioned customer wants to purchase the material, they must realize that this is a big mistake.

Choose the material? Yes, of course, within reason. But leave the rest to the professionals. Let them pick you up and pay you.

If you really want to earn credit card points, you might be able to come up with a deal where the GC purchases the materials and you pay the GC with your credit card for one invoice that specifically reflects the materials. But you, the customer, can benefit greatly by not getting involved with the entire material and vendor part of the game.

Note by BiggerPockets: These are the opinions expressed by the author and do not necessarily represent the opinions of BiggerPockets.