ᐅ Negotiating with Contractors – Getting Market-Style Price Advantages?
Created on: 17 Apr 2020 10:37
A
annab377
Hello everyone,
I wanted to ask how you approached negotiating or trying to get better prices with the various trades and contractors involved in building a house—from A to Z (that is, from structural work to plumbing, plastering, and even photovoltaic systems).
Some people consider haggling or bargaining to be inappropriate or rude towards the tradespeople or the companies involved. How is this usually handled in Germany when building a single-family home?
Do contractors or companies (for example, electricians or plumbers) typically include a small markup in their price that they are willing to lower if the customer asks for a better deal? If the customer doesn’t negotiate, they are happy with the price, but they still want to make a profit, of course.
Some might say, “We’re not at a market bazaar here.” Is it generally seen as disrespectful in Germany to try to shave a few percent off the price, or is this a common and accepted practice in the single-family home construction industry?
I’d love to hear about your experiences. I don’t want to come across as difficult to local companies since negotiating in the single-family home building sector might have a bad reputation.
Best regards
annab377
I wanted to ask how you approached negotiating or trying to get better prices with the various trades and contractors involved in building a house—from A to Z (that is, from structural work to plumbing, plastering, and even photovoltaic systems).
Some people consider haggling or bargaining to be inappropriate or rude towards the tradespeople or the companies involved. How is this usually handled in Germany when building a single-family home?
Do contractors or companies (for example, electricians or plumbers) typically include a small markup in their price that they are willing to lower if the customer asks for a better deal? If the customer doesn’t negotiate, they are happy with the price, but they still want to make a profit, of course.
Some might say, “We’re not at a market bazaar here.” Is it generally seen as disrespectful in Germany to try to shave a few percent off the price, or is this a common and accepted practice in the single-family home construction industry?
I’d love to hear about your experiences. I don’t want to come across as difficult to local companies since negotiating in the single-family home building sector might have a bad reputation.
Best regards
annab377
Eigenheim-nrw schrieb:
I also find negotiating very exhausting; after all, in Germany we are somewhat removed from a "haggling mentality." Negotiation culture in Germany simply works differently than in Arab countries. This applies even when the provider’s background might suggest a preference for bargaining. However, it is a misconception to think that haggling is just about pressing for a lower price—this rather simplistic view is offensive to cultures where negotiating is a normal practice (not only Middle Eastern but also Frisian, for example). Negotiations in the Prussian cultural sphere follow the principle of a tender process: defining quantities and volumes, specifying quality requirements, providing an opportunity to submit offers, reviewing them, and making an award decision. Renegotiation is not excluded, but it should be indicated beforehand if it is intended.
Eigenheim-nrw schrieb:
It definitely helps to obtain different offers in advance (which include identical services) and to mention these during the conversation if necessary. At the very least, you should clearly state whether you want an offer with the intention to place an order if satisfied, or just to compare it to another offer. You should also be clear about your aims: for example, I find “better references” to be an interesting point. But “I’ll buy if you give me a discount” is also a legitimate request—provided it is openly expressed from the start; in my opinion, it is not particularly wise, but there is a lid for every pot.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
I have also thought about how I would structure a tender.
In doing so, I recalled the tenders from various municipal utilities at my previous company. There, the three shortlisted companies had the opportunity to improve their bids by offering fixed percentage reductions on the contract amount.
That is probably how I would handle it as well.
In my current role as a GVL, however, I always give my clients a fixed price that I do not reduce further. The client either accepts the price or goes to a competitor.
Therefore, I can definitely understand if the estimator enters "0" in the percentage field.
In doing so, I recalled the tenders from various municipal utilities at my previous company. There, the three shortlisted companies had the opportunity to improve their bids by offering fixed percentage reductions on the contract amount.
That is probably how I would handle it as well.
In my current role as a GVL, however, I always give my clients a fixed price that I do not reduce further. The client either accepts the price or goes to a competitor.
Therefore, I can definitely understand if the estimator enters "0" in the percentage field.
PyneBite schrieb:
There, the three potential companies had the opportunity to improve their bids by applying a flat percentage to the contract sum. With professionally calculated offers, this only works to a very limited extent because not all items have the same amount of "flexibility."
PyneBite schrieb:
In my current role as GVL, I always give my clients a price that I do not reduce further. The most important aspect of successfully obtaining quotes is to clarify this point (whether revisions are allowed or not) transparently from the start. Unfortunately, many inexperienced requesters consider it a clever strategy to subject providers to a blind guess, which mainly harms themselves, although they often refuse to believe it.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
I can’t respond because there is no option to do so.
It varied.
When I chose the cheapest option anyway, there wasn’t much room for negotiation. Maybe I asked about a discount for early payment.
If I wanted the more expensive one, I would mention that there was a competitor who was about amount X cheaper and ask if they could improve their price.
Most of the time, there was a little wiggle room, sometimes none at all.
I didn’t haggle like at a market or try to drive the price down to the bone. I didn’t want the builder to compromise on quality due to a too-low price and cause me problems later on.
It varied.
When I chose the cheapest option anyway, there wasn’t much room for negotiation. Maybe I asked about a discount for early payment.
If I wanted the more expensive one, I would mention that there was a competitor who was about amount X cheaper and ask if they could improve their price.
Most of the time, there was a little wiggle room, sometimes none at all.
I didn’t haggle like at a market or try to drive the price down to the bone. I didn’t want the builder to compromise on quality due to a too-low price and cause me problems later on.
I work in an industry that has a very high hourly rate for professionals like me. In return, I hopefully deliver good work and expect to be well paid. I have the same expectation for contractors, and yes, they should also be well compensated for good work.
For example, in civil engineering work I have done, I requested multiple quotes or sometimes asked about discounts for early payment. If an offer was accepted immediately without further negotiations, no additional haggling took place.
For example, in civil engineering work I have done, I requested multiple quotes or sometimes asked about discounts for early payment. If an offer was accepted immediately without further negotiations, no additional haggling took place.
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NatureSys21 Apr 2020 12:55We encountered three different situations:
1) Standard case: After discussing a received offer with the contractor for a trade, we asked openly if there was any room for price adjustment. Almost all of them offered some form of discount (to receive payment promptly and without dispute), and some even added a further 0.5-2% reduction (sometimes only on specific line items in the tender). Therefore, in my opinion, not asking at all is not a good idea.
2) In one or two cases, we were quoted an excessive price for necessary additional work. For example, during our major renovation, an extra 9-meter (30 feet) steel beam suddenly became necessary (the structural engineer had missed something). The shell builder wanted about 5,000 euros for the beam, including installation. After research, we found out the beam itself cost only about 1,000 euros, and through tough negotiation, we managed to reduce the total price (beam plus installation) to around 3,000 euros. Since the problem arose suddenly, we couldn’t quickly find another contractor for this work.
3) In one or two cases, a craftsman we preferred was 5-6% more expensive than another. We told him that if he could match the other’s price, we would choose him; otherwise, we would take the cheaper one. He matched the price in those cases. Otherwise, we would have actually hired the other contractor.
1) Standard case: After discussing a received offer with the contractor for a trade, we asked openly if there was any room for price adjustment. Almost all of them offered some form of discount (to receive payment promptly and without dispute), and some even added a further 0.5-2% reduction (sometimes only on specific line items in the tender). Therefore, in my opinion, not asking at all is not a good idea.
2) In one or two cases, we were quoted an excessive price for necessary additional work. For example, during our major renovation, an extra 9-meter (30 feet) steel beam suddenly became necessary (the structural engineer had missed something). The shell builder wanted about 5,000 euros for the beam, including installation. After research, we found out the beam itself cost only about 1,000 euros, and through tough negotiation, we managed to reduce the total price (beam plus installation) to around 3,000 euros. Since the problem arose suddenly, we couldn’t quickly find another contractor for this work.
3) In one or two cases, a craftsman we preferred was 5-6% more expensive than another. We told him that if he could match the other’s price, we would choose him; otherwise, we would take the cheaper one. He matched the price in those cases. Otherwise, we would have actually hired the other contractor.