The $1,055 Premium ... FAIL

[MJ DeMarco]

The $1,055 Premium ... FAIL

This is an open letter to the junk hauler who was at my home the other day to give me an estimate to haul away some junk at my house.

Let me say unequivocally ... YOU FAILED. And you succeeded at wasting your time and I hope you traveled many miles to my house.

You see, I called you because your website advertised a $349 "full-service' program to haul away junk from my home. I told you that the junk was construction and yard debris. I told you it was nicely piled-up in both side yards and even gave you dimensions. I told you I only wanted one truck load to be hauled away and by the looks of your truck displayed at your website, it was obvious 80-100% of my junk would fit. Whatever didn't fit, I could trash myself. No biggy.

Yet, you insisted on the need and urgency to come out to my home for a personal estimate.

I resisted because I knew that as soon as you saw my house, you'd give me the inflated "you-live-in-a-big-house-and-in-a-multi-milliion-dollar-neighborhood" price.

And boy, was I right.

As soon as you arrived, you started to praise my home. Beautiful! Gorgeous! Breathtaking view! Wow! What do you do for a living!?

I wasn't fooled as I knew this was the prep-and-primer for the big price. Then you proceeded to examine my junk pile(s).

"Oh this is some heavy stuff"
"Wow, this will take 3 crews 3 days"
"That's a lot of junk"

Again, you didn't fool me as I knew you were fully engaged in the game. Unfortunately for you, I wasn't playing. You see I've been so numbed by these tactics and strategies by so-called business people like you, it never works. In fact, I never hire anyone that visits my home for "estimates". It never works out because you, and everyone before you, thinks that a nice house gives you the license to gouge and overprice. Wrong.

"So how much is it going to be?" I asked.

"$1,500" the man replied.

I paused. Wow, such a round number. Very arbitrary. Almost, like, well ... it was picked out of the air.

Unable to restrain myself, I scoffed and retorted "You've gotta be kidding me ... no F*cking way". There was no need to negotiate as his mentality was exposed.

It wasn't the response you expected so you turned around and walked out and off my property quite abruptly. Of course I heard you mutter "You've gotta do what you gotta do" Thank you for that advice. I will. And by the way, get off my property --rip-off artists are not welcome.

As you left my home I wondered, if this same exact garbage was sitting at another home in South Phoenix (a crappy neighborhood) would your price be the same? Or would it be the $349 you advertised on your website? What happened to that $349? Where did it go?

Anyway ...

So today, I just wanted to let you know that all that junk was removed from my home today for a total cost of $445. I hired a different company via the web. And ya know what? It didn't take "3 crews 3 days" -- it took 1 man and his two teenage sons 4 hours. So much for all your assertions of difficulty. So much for your $1,500 price.

Nice try.

As for your service, I guess the price of living in a nice neighborhood is priced at a premium of $1055.

I think you forgot to advertise that on your website.

 

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[maximus20895]

Wow. I am assuming this happens alot? How do you know that they are charging you more? What kind of clues or hints? What other stuff do people charge more just because of your income?

This is very interesting.

 

[MJ DeMarco]

Wow. I am assuming this happens alot? How do you know that they are charging you more? What kind of clues or hints? What other stuff do people charge more just because of your income?

This is very interesting.

Happens every time someone comes over for estimates. The price of work is doubled, sometimes tripled. It is impossible to get a fair price on "in person" estimators.

I always try to get estimates on the phone or email w/pictures.

Before this incident, I had an estimate of $2,200 for some stone and frame work in my house -- this was the "visit your house" price. Instead, I then got estimates via email by sending the contractor pictures ... got the same job done for $840.

This practice of overestimating is normal. I refuse to hire anyone who visits my house. I now figure out the problem and then get a price over the phone or send detailed photos by email.

PS: Thanks Yanks for pointing out the calculation error.

 

[maximus20895]

Wow. So mainly just labor/contracted jobs. I guess alot of people fall for the overpriced stuff and that's why they keep on doing it.

Too many people out there that are in business and don't know that customer service is number 1. I thought that is a no brainer..guess not.

I guess you take pictures without showing how big your how is lol

 

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[Dhappy]

I had this problem years ago when I would show up in my sports car and try to deal with tenants or get a good deal from a seller on a house. I went out and got a old pickup and my problem was solved. In your case that won't work unless you go buy a old beat up house and drag the junk over there. I hate to say it, but I have learned to cry poor around most people.

 

[Russ H]

This brings up an interesting point.

Back when I was working at a client's house on the shores of Lake Tahoe, they asked me how much it would be to make the living room full of sound.

I figured the whole thing out, and showed them the numbers.

It was something like $9980.

"It figures", she signed "Seems like everything we do around her is 10 thousand dollars. New fence on the side of the house, 10 grand. Patch on the driveway, 10 grand. New landscaping, 10 grand . . ."

Didn't occur to me until just now that that was the "$1500" bid.

Funny thing was, I was figuring out how to do it on the cheap-- most of my stuff would have cost well over $50K-- and I was cutting corners like crazy to make it come out low (b/c that's what they'd asked for).

So even after doing all that, I probably just came off like the $1500 junk hauler guy.

They still hired me to do the work, though.

-Russ H.

 

[fanocks2003]

MJ - I had kind of a similar experience with a swedish web designer once. He advertised one price and later on he asked my company to pay 3 times that amount. AND he insisted my company owed him money even though he hadn't delivered the website yet. Damn idiot.

First of all he priced my company 3 times more than he said he was going to charge my company for some web design.

Second of all he tried to get paid (and he said my company actually owed him money) despite the fact that he hadn't even delivered a website. How can you owe someone money if you haven't even recieved a product or service yet? Isn't that really a voluntary expense (I pay if I want it. If I don't pay it, keep it. Don't deliver it at all)?

Third of all, he had the stomach to do a background check on my company and me personally. AND I am not talking about a normal credit check or whatever. We are talking about Sherlock Holmes inspection. Like if I and my company where under criminal investigation or something.

So, I can certainly relate to your experience MJ. But it, of course, goes two ways. I have helped people and gotten scammed that way two. Even though I delivered what I promised at the price I had quoted. So scam artists has to be dealt with swiftly and harshly.

 

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[Salinger]

I wonder sometimes if this isn't a self fulfilling prophecy. Did your expectations, and the way you conducted yourself, in person, create the reality you experienced?

I agree that some people will try to take advantage where they smell money, but I have also seen it work the other way were, wealthy, successful businessmen often get the best prices from contractors. I can think of two reasons for this:

1) The other party senses that the wealthy client is knowledgeable about the cost of competing services, and may in fact know more about a fair price for the job than they do.

2) The person bidding for the job recognizes that if he treats this wealthy client fairly, it is a foot in the door to more business. He can build a relationship and receive more work and positive referrals from someone who could have a significant influence on their bottom line. This takes a longer-range view on the part of the contractor.

I think attitude plays a big role. If you walk into the car dealer thinking that you won't get much off the sticker price and they'll make you buy the "protective undercoating," you'll be right. If you walk in knowing you'll get a great deal, with a bunch of accessories and a year of free gas and service thrown in, again, you'll be right.

I actually think stupid people get much worse deals than wealthy people. Just be glad you aren't both.

 

[MJ DeMarco]

I wonder sometimes if this isn't a self fulfilling prophecy. Did your expectations, and the way you conducted yourself, in person, create the reality you experienced?

Believe me ... IT ISNT. I conduct myself as a professional until treated unlike one, or when graced with incompetence. When this guy arrived, I greeted him with a smile, conducted friendly small talk ("You been staying busy?", etc. etc.) and when he asked "Wow, what do you do for a living" I fibbed and said I was unemployed (Technically true) giving him the signal that the cash-register at this house is CLOSED and will stayed CLOSED.

 

[MJ DeMarco]

Hmmm...maybe the right response from now on is:

"The reason I need someone to do some work on this house is that I'm facing foreclosure and need to sell it before next week, when it goes up for auction..."

But that would require me to LIE! I'm not a good liar but I might be willing to give it a shot.

 

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[qwerety]

Hmmm...maybe the right response from now on is:

"The reason I need someone to do some work on this house is that I'm facing foreclosure and need to sell it before next week, when it goes up for auction..."

I don't think that would help on lowering the price. I don't think any response you would have would lower it. The location and how the place looks is all they will need to see when it comes to pricing. Someone trying to triple an estimate would triple it if you said you were unemployed or if you said you were VP of a worldwide sales firm. Someone who would give you an honest price would give you the same honest price if you gave the same two responses. Plus that lie is too easy for someone to catch you in, and what if the person is honest and does a good job and you wanna call him back in a couple months to do something else, you don't wanna lie again if you try to do business with him again.

If I was going to do some type of business and I saw a really nice house in a nice neighborhood the last thing I would do is try to inflate the prices, because I'm not that type of person, as well as I would not assume just because they may have a lot of money that they would be willing to spend any amount to get something moved/fixed etc. Also, if you quote the price honestly and do good work, word of mouth can get you lots of other business in that same area and you could also get called on to do bigger jobs that you wouldn't get from going to the average place.

So, not only is it morally wrong, but it seems like a bad business decision as well because people are very quick to tell others when they get cheated or have a bad experience.

 

[Moneymaka]

Am i the only one who's really interested in seeing a picture of MJ's house after reading the story?

 

[MJ DeMarco]

Am i the only one who's really interested in seeing a picture of MJ's house after reading the story?

Its nothing special. There are pics of it on my Facebook account. And, I've posted some pictures here months ago. It's nice and modest; not some big mansion with 20 acres and 10 pools.

 

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[wildambitions]

MJ -

How long did it take you to complete that whole thing?

Oh man... now your asking for a story! Come to one of the meet-ups!

 

[MJ DeMarco]

MJ -

I think that's the first time I've seen those pics...awesome renovations!

I absolutely love that kitchen (and bar!)...once the baby is born and no longer is taking up 24 hours/day of our time, we're planning to do something very similar with our kitchen. I may ask you for some recommendations!

How long did it take you to complete that whole thing?

Jason,

You DON'T want my recommendations if you plan on being efficient. The kitchen took close to 1 year -- the contractor did great work but is slow as molasses. He works by himself in a small custom shop and the whole thing was one big ordeal. In fact, the project was my worst nightmare. As a whole, the thing took over 2 years and I'm still remodeling the backyard. I should have demolished the whole home since the land is why I bought it.

I don't think I am one to be dispensing remodeling advice other than "don't do it!" -- being rehab is your living, I'm sure you won't have the same problems I did which started the moment I hired the idiot GC. Reminds me of a Star Wars quote, slightly modified ... who's the idiot, the idiot himself or the idiot that hires the idiot?

 

[MJ DeMarco]

Well, if it makes you feel any better, the end result looks fantastic!

Thank, hopefully somebody with a lot of money will feel the same when I sell it. :smxB:

 

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[veli]

PhxMJ wrote: "Thank, hopefully somebody with a lot of money will feel the same when I sell it. :smxB:"

This quote to me is "interesting". As someone who lives in a home Ive started refurbishing (not at all finished by all means...but then again when is it ever finished?"), I cant help the fact that Ive noticed "feelings" within myself about shifting to a new location. Basically I am happy with where we live, but some how the feeling about searching or moving somewhere else has been gradually stronger over the past years.
I remember MJ writing about his life altering choice when he moved from his hometown, and although you just now wrote "WHEN" you will sell it I'm wondering have you already started thinking about selling your home, unconsciously or consciously?
Wish I could see the pictures, but I've resisted getting on facebook so far

 

[hatterasguy]

Around here its called the Fairfield county markup, or Greenwich markup. Usualy 50%, its utter and totaly BS.

You always want to cry poor, the more money you make the more poverty you cry. My uncle when not driving his truck has an old junk VW that he goes around to his projects in. His Mercedes has never seen a jobsite, because if it did it would cost him.

 

[son_of_slim_jim]

When doing small things usually if you exceed the expectations and do the job fast, you'll be asked to do other things, get referrals or a little tip. So there is no need for people to mark up prices. By not marking them up they have the potential to make more than the mark up.

 

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[MJ DeMarco]

Here is another "PREMIUM FAIL" ...

I've been landscaping my backyard now for a few weeks and have enjoyed the process. Before I started the project, I did get a few estimates.


Within those estimates, there was a line-item for rock cover. For those you aren't familar with Phoenix desert landscape, we use "rock cover" for landscape as oppsed to green grass or turf.

Anyway, on the 2 bids I received they priced in the "rock cover" at 33 tons and 42 tons respectively. Each ton is about $35 bucks.

This week I just finished the rock cover myself. I order the rock myself and hired a few guys to spread it.

Guess how much rock-cover I actually needed...


22 TONS.

Had I hired these landscape guys, I would have been overcharged and never told about it.

Trust but verify!

 

[MJ DeMarco]

Here's the latest "Nice House, Big Price" fail.

The date palms in front of my house need a trim.

View attachment 1329

A big ladder and about 40 minutes is needed to get it done. I don't have a tall enough ladder so I need to hire someone.


Two guys come to my house.

I immediately smell the pitch.

The guy starts into this long arduous speech about how he's going to trim the trees, how he's going to do this and that, fertilize them, blah blah -- look, I need the dead branches trimmed off! You can glorify the process all you want -- I just want it done. Snip, trash, done.

His price?

$400.

Oh? $600 per hour to trim some trees? I laughed and walked away.

So in case you don't know ... tree trimmers are up there with surgeons, lawyers, and doctors.

 

[maximus20895]

So what happened. Did you find someone else or what? I would find this annoying, but at the same time a little entertaining with all the bullshit excuses they come up w/ to charge that much.

 

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[MJ DeMarco]

No, my trees still need to be trimmed.

 

[Kung Fu Steve]

Well, I don't have a ladder... but I can jump really high!

Maybe I could do it for an advance copy of the book? :smxB:

 

[ITA]

What's the link to the thread with the house pics?

Phx, I'm a bit surprised by your 'saving' attitude here. Although not nearly as rich as you, I get the same kind of high bids because I'm an expat in China so local guys who come in my high-rise flat to fix stuff always try to overcharge me.

I refuse to pay 200 bucks when I know it should be 20, but I don't mind paying 30 or 40 to just get it done and not have to waste time on it any further. I'll say (in Chinese to make the point) "dude I've lived here for years, I know the game, let's cut to the chase, this is a 20 bucks job." He'll say "40", I'll say "30", done, I can get back to work and the problem gets fixed. If not, I have to find and call another guy, wait for him at home, re-explain the problem, re-negotiate...An extra 10 bucks is as irrelevant to me as an extra 100 is to you, and it frees me up.

Life is too short, and time is your most precious commodity.

 

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[qwerety]

What's the link to the thread with the house pics?

Phx, I'm a bit surprised by your 'saving' attitude here. Although not nearly as rich as you, I get the same kind of high bids because I'm an expat in China so local guys who come in my high-rise flat to fix stuff always try to overcharge me.

I refuse to pay 200 bucks when I know it should be 20, but I don't mind paying 30 or 40 to just get it done and not have to waste time on it any further. I'll say (in Chinese to make the point) "dude I've lived here for years, I know the game, let's cut to the chase, this is a 20 bucks job." He'll say "40", I'll say "30", done, I can get back to work and the problem gets fixed. If not, I have to find and call another guy, wait for him at home, re-explain the problem, re-negotiate...An extra 10 bucks is as irrelevant to me as an extra 100 is to you, and it frees me up.

Life is too short, and time is your most precious commodity.

There is a difference between not wanting to pay 400 bucks because its 400 bucks and not wanting to pay 400 bucks for something that someone else would probably do for 100. Besides, its just some trees that need a trimming and its nothing too important. MJ is the difference between rich people who suck with money and are more likely to piss it away and become bankrupt and rich people who are good with money. Rich or not rich if all you need is a couple trees that can be easily trimmed, why pay 400 when you know that's way too much.

About the tree trimmed thing MJ if they still need it you could do craigslist and say you have a couple trees that need to be trimmed. Say whatever their height is. Like I have 2 30 ft tall trees that need to be trimmed and show the pic of the trees just at the top that needs to be trimmed without your house in the picture. Say whatever price you want, like 100 or best offer. If you get someone and they come all the way down it will be harder for them to change up and up the price cause they already either accepted your offer or made their own you accepted. If they don't do it then say I will just call back the other guy then. Tell him 100 (or whatever price you decide on) is better than nothing which is what he would get if he doesn't do it for the price he accepted (or negotiated).

I'd do it for ya MJ for 50, but I don't live close and I'm scared of heights lol

 

[LagunaLauren]

MJ-I've had the same thing happen to me too, with people thinking that they can overcharge based on my house/address. I don't understand why these guys assume that wealthy people are either: a) stupid or b) willing to ridiculously overpay. It's definitely the principle that they think they can take advantage of me that pisses me off. :cuss:

 

[qwerety]

I don't understand why these guys assume that wealthy people are either: a) stupid or b) willing to ridiculously overpay.

It's either 1 of 2 things. One, they never do any business with people with money so they think they can take advantage. Two, they find more rich people willing to pay whatever just to get the job done. I bet if they did have contact with rich people and all of them turned them down because of outrageous prices they wouldn't do it anymore. So, they may run into those who go it more than they do rich people who turn them down.

 

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[MJ DeMarco]

Phx, I'm a bit surprised by your 'saving' attitude here.

Do you really think its all about the 'saving'?

Would you buy a Honda Accord for $90,000 just because someone told you that was the price? I don't do business with crooks and people without a shred of ethics ... if I have to spend another 10 minutes to avoid them, Ill be happy to pay that price, just after another 2 minutes of these people getting a piece of my mind. Its about principle. I will not reward people that don't have any principle other than "maximizing profit". (sound familiar?)

Paying for convenience ? Yea, I've done that and paid extra $$ for it ... but sorry, my quest for convenience doesn't extend to willful theft and the reward of the unethical.

 

[Russ H]

The date palms in front of my house need a trim.

A big ladder and about 40 minutes is needed to get it done. I don't have a tall enough ladder so I need to hire someone.

Two guys come to my house.

I immediately smell the pitch.

The guy starts into this long arduous speech about how he's going to trim the trees, how he's going to do this and that, fertilize them, blah blah -- look, I need the dead branches trimmed off! You can glorify the process all you want -- I just want it done. Snip, trash, done.

His price?

$400.

Oh? $600 per hour to trim some trees? I laughed and walked away.

So in case you don't know ... tree trimmers are up there with surgeons, lawyers, and doctors.

MJ, some info you may not possess:

Roofers and Arborists have the highest worker's comp rates in the country.

(because they have the highest cost for their injuries).

Where we are, if you are a roofer (or arborist), if you pay your guys $20 an hour (or LESS), you wind up paying MORE THAN $25 PER HOUR for worker's comp.

No lie.

This is before payroll taxes, social sec, etc.

Now comes licensing.

You need a business license, as well as a contractor's license, in our state to work on roofs or to do work on trees more than 20' off the ground (unless you, the owner, are doing the work).

So kick in more thousands of dollars that, BY LAW, you have to pay to do the work.

I saved the best for last.

Liability/ accident insurance for arborists is HUGE (seems trees like to fall in unexpected directions). So the other requirement to do this work is at least $1 mil in coverage, in case your tree work takes out a house, or Benz, or (god forbid), a little baby in the nursery as it crashes through the house.

Scary rates for this insurance.

Turns out most arborists out here have to charge about $2200 a day just to break even (pay their staff, pay themselves a modest-- not exorbitant amount-- etc.)

First time I got some work like this bid out, I was flabbergasted.

(ironically, the bid we got, to trim some high branches, was also $400!).

What I did instead:

Had our landscape guy (who was not licensed, insured, etc for tall tree work) cut the branches.

Cost me about $40 ($12.50/hr, plus time to haul the branches away).

Made me feel really smart.

Wanna know something?

After dealing w/worker's comp, and accident issues this year, we'd hire an arborist for $400.

It's so much cheaper than dealing w/accidents, and their associated costs.

I guess I'm sayin:

There are always ways to save money.

But some of them incur risks-- and crazy expenses-- you may not see.

-Russ H.