Consumers don’t always like surprises, especially from a remodeling contractor.
When Dave Koziol of Minneapolis interviewed four contractors for a kitchen project, he chose the one who was the most transparent about costs, which included an itemized bid.
“I knew the total cost, but I also knew the cost for the sink, the plumbing, new ceilings to get rid of the popcorn, the electrical labor and recessed lights,” he said.
Koziol, 36, hired Fair & Square Remodeling of St. Louis Park, a contractor that is upending the bidding process. Traditionally, it involves a contractor asking a lot of questions, producing an estimate, designing plans and changing the plans if the client wants different materials or a lower price. After construction starts, unforeseen costs, job creep and additional change orders may leave the client and the contractor at odds. Remodeling cost overruns are one of the most common complaints from consumers, according to Angie’s List and the Better Business Bureau of Minnesota and North Dakota.
Fair & Square owner Mike Otto said, “We don’t want people to be nickel-and-dimed to death.”
His new rollout includes bundling packages, something rarely seen in the remodeling industry. Customers remodeling a kitchen, for example, can choose among packages for roughly $16,000, $30,000 and $50,000. Prices are based on a 100-square-foot kitchen and include countertops, sink, hardware, and fixture removal and disposal. Cabinets, lighting and backsplashes are included in the $30,000 and $50,000 packages, which “simplifies the process and eliminates the unforeseen expenses,” Otto said.
Flexibility isn’t a casualty. If a client doesn’t want to replace a feature such as flooring, it can be deducted. Clients can also introduce new choices beyond what is part of the package, although it may change the price. Even with the bundled fee range, Fair & Square still provides itemized pricing to maintain transparency.
“The beauty of this product is that so many home footprints are the same,” said Chief Financial Officer Mickey Mikeworth. There’s the standard galley kitchen, for example. Clients who can manage the design choices with select mix-and-match options can save themselves a lot of time.
“Having a narrowed selection was less intimidating,” Koziol said. “It was also nice knowing that if we did not see what we wanted from the provided option, the assigned designer would guide us through the selection process.”
“We’re reducing the choices available to clients from the stratosphere to a really well-honed set of choices, including granite countertops. “Nobody wants laminate anymore,” Otto said.
He’s targeting the new bundles to millennials. “They don’t want to stick $80,000 to $100,000 in a kitchen remodel when they know it’s not their forever home,” he said. He also realizes that millennials may not have ready cash for a $20,000 to $50,000 remodel. The company works with a bank to offer financing with interest rates in the single-digit range.
Condo dwellers are also good candidates for the bundled remodeling. “Most condo kitchens are about 100 square feet and fit into a pretty standard layout,” Mikeworth said.
Fair & Square started its bundling program with kitchens. In coming months, it expects to offer bundles for bathrooms and decks and eventually basements.
The typical design process before construction can take up to 10 weeks for remodelers. Bundling reduces it to three, Otto said. For smaller jobs, Fair & Square also added a handyman service. “Our clients were always asking if we know someone who can do siding repairs or tile backsplashes,” he said. “It even works for people who’ve never done a big job with us. It’s also a good way for them to test us out.”