Building and Remodeling is it a Commodity?

Most homeowners and even some builders believe that there is a “going rate” that applies to building houses, remodeling bathrooms, installing flooring, etc… Homeowners, governments and business are encouraged or in some cases required to get three bids – assuming that the workmanship and quality will be the same. Is this the case; are the building and remodeling trades just a simple commodity driven by price?

This issue has been around for quite awhile and it occasionally pops up in conversations, on online forums, etc… Recently I came across an article from a contractor I respect very much, and he addresses this issue more eloquently than I probably could. I wish to thank Owen Sechrist of Ruby Construction for allowing me to repost this article.

I’ve been noticing ads lately regarding “real time price checking” and “price matching”. The culmination of internet shopping and big box stores has created a marketplace where comparitive price shopping is so quick and easy that the giant retailers are actually willing to do it for you.

I guess this is a wonderful thing, after all, the stores all have the exact same products and the only real concern is price, right? For the average consumer the answer is obviously “yes”, although there are a few shopping dinosaurs like myself who are still concerned with things like return policies, product knowledgeability of salespeople and how companies treat their customers and employees. There is also the question in some cases of whether the product really is exactly the same; for example I have heard plumbers claim that big box home improvement stores actually sell lower grade castings, or seconds, of things like toilets and sinks. That, however, is a whole different subject for another article.

I think it is fair to say that we live in a society where consumers want to pay the lowest possible price for a commodity item. One big problem with this mindset is when consumers mis-identify a product or service as a common commodity.

Building and construction services simply are not a commodity item. Home remodeling, which is most often taking place while you are living in your home, is as far from a commodity as you can get. It’s true that the end result is a tangible set of fixtures and finishes, hopefully pleasing to the eye and touch, but the story of how they got there and what lies beneath them has far more to do with their cost and value than most consumers can conceive of when they’re trying to compare proposals.

An easy example of this is a custom tile shower. There are different code requirements for building showers depending on which set of codes your municipality has adopted as well as the whims of your particular plumbing inspector’s code interpretation. What is more clear is that the method of construction meet each of the following questions with a resounding yes:
1. Is the floor sloped to the drain at 1/4 inch per foot minimum?
2. Are the walls waterproof behind the tile?
3. Is the floor waterproof under the tile?
4. Is the waterproofing on the floor underneath the tile on top of the 1/4 inch per foot pre-slope?
5. Is the waterproofing continuous between the walls, floor and drain?
6. Is there a capacity for standing water behind or beneath the tile?
7. Will the construction of the shower and it’s waterproofing system stand the test of time?
Do you think that it would be cheaper to build a shower if you answered “no” to the above questions? I assure you it would. When looking at the finished product, however, you would have no idea whether the shower met the above criteria. And we didn’t even get into issues such as how well the tile was set from an asthetic standpoint, whether the right setting materials were used, design and layout of the tile pattern, what type of grout was used, whether the tile and grout were sealed… I could go on and on.

I also believe that the customer experience and customer service are extremely important. They cannot, however, be delivered for free. Delivering top-notch customer service and warranty service as well as maintaining a clean jobsite takes time. So does being attentive to every detail and producing a great design.

If you disagree with my train of thought you can always find a “contractor” on CraigsList who advertises that he’ll beat the lowest estimate you get. Just don’t group the real professionals in with the masses doing it on the cheap, and stop implying we’re trying to rip you off because other bids came in lower.

There is no such thing as an apples to apples comparison in the home remodeling business.

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