Price agreed to but can't agree to contract terms...what to do?

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Thank you DaninFLA; I appreciate your help. We did do extensive research to find a builder. Unfortunately we are located in a small town outside of Dallas and a lot of the PB's said they "don't service" our area.

We contacted:

Southernwind Pools - Does not service our area

Custom Outdoor Trends - Too High, would not negotiate at all

Summerhill Pools - Does not service our area

Hobert Pools - Never responded to our inquiry

Cullen Pools - Never responded to our inquiry

Venture Custom Pools - Who we are possibly signing a contract with

Mirage Custom Pools - Terrible Customer Service from the beginning

Riverbend Sandler - Does not service our area

Hopkins Custom Pools - Gave us a quote but when we asked to modify to get more in line with our budget they never responded

Outdoor Living Pool and Patio - Gave us a quote but when we asked to modify to get more in line with our budget they were not able to do so

Medallion Pools - Does not service our area

Waterline Pools - Never responded to our inquiry

As you can see, we definitely checked out almost everyone.

Our other option at this point (if we can't reach an agreement on the contract) would be to wait until the "slow season" and recontact everyone or do a self build, which we could do (we have extensive construction knowledge) but really don't want to do :pth:
 
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there was a link from someone that did an owner build in the construction section too I think. I would reach out to the people in the links at a minimum. maybe they had similar issues.

also, you seem unsure of this PB before even coming with here. if it don't smell right, don't do it. go with your gut.

At this point, you aren't going to have a pool for summer season anyway, so maybe waiting a bit till slow season will open up more people to do work and might cost a little less too.
 
In my opinion, unless he's worried about his work or what he agreed to, he would have no issue agreeing to more balanced terms. I can understand needing money up front to pay for stuff, but if he's working on that tight cash flow that would worry me as well.
 
Novcruisin said:
We don't anticipate being done in time to swim this year :) and for that reason we were able to talk them into a large discount
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Maybe this is why he's holding firm to the payment terms, because he is offering a "large discount". From a vendor this is something I might hold on to in a negotiation if I'm offering a large discount. Just a thought.

Have you checked this guy out on the BBB?
 
Did this PB give you list of recent customers/references and offer to setup appointments to go visit the pools he has built?

You'll get a better idea of the guy if you can go talk to his previous customers.


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OK, to play a bit of devils advocate. part of running a business is managing cash flow and financial risk. Sure the PB coudl pay for things on his nickel, and have you pay afterwards. But if his cash gets tied up on that, then the fees associated with that will be passed along to you the customer. And for anyone who disagrees, you are wrong. There may not be a line item that says interest on yoru quote, but that is just built into the markup cost of the pool as it is quoted.

To play more devils advocate, there is risk for the PB in not getting paid by the homeowner, just like there is risk for the homeowner that the PB will not finish the job. I'm sure that for every job wherein a contractor wont fix a final detail and have no motivation to do so because they have already been paid, you will find an irrational home owner that wont pay their contractor because of some detail that they are demanding that was not part of the quote. Maybe in a pool situation the homeowner might not pay until the PB puts sod or grass seed in teh yard. But the contract says that the PB will grade the yard. If the homeowner thinks that grading the yard includes seed, then the homeowner would dig in his heels and say Im not paying without grass seed.

So... with that being said, what do you do. If it were me, I would compromise. I would pay the early payments in advance. I would explain to the PB that you have heard so many stories about bad contractors not finishing the job, so you woudl really like to hold back the final 10% until the pools passes inspection, and that a final checklist has been completed. And then spend some time to go over what needs to happen in detail with your pool. Or as suggested before, use an escrow account. Or give him a post dated check. Creativity and politeness will find a solution I hope.

One note, as someone who deals with customers and sales, just like a customer can get a bad feeling about a contractor, a contractor can get a bad feeling about a homeowner. More often that you might think, it is better to turn away work and money rather than dealing with a customer you think is going to be a pain.

Good luck
 

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We don't have a pool yet but we are about to sign in with the same terms, 40-40-15-5. It also makes us very nervous but our neighbor is building a pool right now with the same company and all is going well, almost finish. I wonder now if we should try to negotiate but we are having the same issue as you. Called 4 PB, all 4 came to my house but so far got estimate from only 2 of them. Pool is estimated so far for $57,000. Anyway, I don't know now what we should do. I hope you can agree on terms with them. I can't imagine starting all over again.
 
Yev said:
OK, to play a bit of devils advocate. part of running a business is managing cash flow and financial risk. Sure the PB coudl pay for things on his nickel, and have you pay afterwards. But if his cash gets tied up on that, then the fees associated with that will be passed along to you the customer. And for anyone who disagrees, you are wrong. There may not be a line item that says interest on yoru quote, but that is just built into the markup cost of the pool as it is quoted.

To play more devils advocate, there is risk for the PB in not getting paid by the homeowner, just like there is risk for the homeowner that the PB will not finish the job. I'm sure that for every job wherein a contractor wont fix a final detail and have no motivation to do so because they have already been paid, you will find an irrational home owner that wont pay their contractor because of some detail that they are demanding that was not part of the quote. Maybe in a pool situation the homeowner might not pay until the PB puts sod or grass seed in teh yard. But the contract says that the PB will grade the yard. If the homeowner thinks that grading the yard includes seed, then the homeowner would dig in his heels and say Im not paying without grass seed.

So... with that being said, what do you do. If it were me, I would compromise. I would pay the early payments in advance. I would explain to the PB that you have heard so many stories about bad contractors not finishing the job, so you woudl really like to hold back the final 10% until the pools passes inspection, and that a final checklist has been completed. And then spend some time to go over what needs to happen in detail with your pool. Or as suggested before, use an escrow account. Or give him a post dated check. Creativity and politeness will find a solution I hope.

One note, as someone who deals with customers and sales, just like a customer can get a bad feeling about a contractor, a contractor can get a bad feeling about a homeowner. More often that you might think, it is better to turn away work and money rather than dealing with a customer you think is going to be a pain.

Good luck
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This is exactly what I was going to say. What is the first thing you hear at any little tiny issue? Hold the payment on them! It is almost the first thing that is said about any little issue. In addition, with permitting and hoa's, etc these $50k, $100k pools are staying on the books for a few months sometimes. Then factor in the PB may be building a few pools at the same time. It isn't the same as a 5 day project. In addition to all of the above you also have things like sending a customer an invoice and them not paying it for weeks which also plays into their timeline. I am not saying I agree 100% with the PB here as I don't but I wanted to also present another side. There has to be a balance that works for both. Not all PB's are out to get you and not all customers are out to get the PB but there are some of both that exist!!
 
Actually post dated checks can be cashed early or the second it is in their hands really. Once it is signed by you and given to the recipient they have the right to cash it at any time they wish. And they only expire if it says so on the check, and this is usually an agreement between the maker and the banker to deny checks that are over a certain age.

If the PB lets all of their customers pay them after the work how will they pay their sub contractors? I think I would agree to 40-25-25-10. That's just what seems reasonable to me so that they can get the job done. And i agree with Yev about the cost of floating money. If you don't provide it for them, the PB will have to pay to get it from somewhere, even if it means interest lost on money in their bank. And I am sure that cost is built in somewhere.

Good luck on your pool!
 
Yev said:
I'm sure that for every job wherein a contractor wont fix a final detail and have no motivation to do so because they have already been paid, you will find an irrational home owner that wont pay their contractor because of some detail that they are demanding that was not part of the quote.
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The difference is that the homeowner can't attach a mechanic's lien to the contractor's property if the contractor fails to perform. Anyone who has had to battle a crooked business can tell you that it's much, much more difficult for a customer to collect a debt from a business than vice versa. If the contractor fails to perform the homeowner's only choice is to sue and cross their fingers that a judge will sympathize with them. It is perfectly possible that the judge simply chooses not to and the homeowner has no further recourse.

cooljul said:
If the PB lets all of their customers pay them after the work how will they pay their sub contractors?
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Perhaps after they do their work?

Net 30 is pretty standard business practice. If your business margins are so small that you can't operate on net 30, your business is about to fail anyway. Believe me when I say you do not want a contractor that goes belly up in the middle of a project. Wait until you discover that his subcontractors can come after you even if you paid the contractor.

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Cleoland said:
We don't have a pool yet but we are about to sign in with the same terms, 40-40-15-5.
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It's times like these that I'm glad to live in a state that doesn't allow this.
 
Just had a new pool built...north TX. PB had relatively the same contract terms 30% 30% 30% 10%. Pay for work when it starts. The 10% was when plaster starts. I negotiated 5% at plaster and 5% after completion. If you don't have any issues at the end...5% is enough but if you do...5% is really not enough. If you have the right pool contractor (hard to know) they will fix the issues regardless of the money. Though...it is all about expectations and understanding what your getting. I figure most pool contractors do this because they have had to fight to get paid at the end...some of it rightly so but some of it probably because of ill expectations. Folks that don't know anything about construction...either don't get what they paid for because they have no idea what to look for or run the PB thru the ringer because they no idea and if holding the PB $...this can be very difficult for any contractor.
 
allforthekids said:
I figure most pool contractors do this because they have had to fight to get paid at the end...some of it rightly so but some of it probably because of ill expectations. Folks that don't know anything about construction...either don't get what they paid for because they have no idea what to look for or run the PB thru the ringer because they no idea and if holding the PB $...this can be very difficult for any contractor.
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If you're a contractor and find that you run into customers who are unhappy enough to withhold payment often enough to be a problem, that should be a huge, giant red flag that something is wrong with your business process. Either your work leaves something to be desired or you're not managing the customer's expectations. The solution is to identify the deficiency in your business process and fix it. A business who addresses a problem by requiring payment up front is just signalling savvy customers that the business prefers to blame customers for their problems rather than to take a long, hard look at how they can improve. Ironically, this will drive customers who have construction knowledge away and leave the business with customers who don't know better (generally) - the very customers likely to have unrealistic expectations. It's a sort of self-fulfilling prophecy.
 
Yev said:
if his cash gets tied up on that, then the fees associated with that will be passed along to you the customer
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I put my pool on a credit card with 0% interest for 12 months. If I can do that, then a PB can too. Even without the promo offer, I could have used my HELOC with a variable rate that is currently at 2.49%. I get .1% on the cash I have in the bank. If the PB's cost of capital isn't less than 5% then there is a reason for that.

Yev said:
there is risk for the PB in not getting paid by the homeowner
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In my state, anyone doing work on a house can get a lien at the drop of a hat. Heck, there are even contractors that get liens on the wrong house with no proof, and the owners sometimes don't find out until they go to sell, and the contractors are just awful about timely removing them if they are even still in business.

Yev said:
If it were me, I would compromise.
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Making progress payments as the work is completed is a compromise, and the only correct one. I'm sure all the Paddock Pool customers in my area that got stiffed wished they'd have learned this lesson. Do NOT ever pay for work in advance. It's a lessson every new generation keeps having to learn the hard way.

sbpse said:
There has to be a balance that works for both.
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Progress payments AFTER the work is done is the correct method. When the PB wants the money up front, you know dang well he is using your money to finance the other projects he's got going.

sbcpool said:
The difference is that the homeowner can't attach a mechanic's lien to the contractor's property if the contractor fails to perform. Anyone who has had to battle a crooked business can tell you that it's much, much more difficult for a customer to collect a debt from a business than vice versa. If the contractor fails to perform the homeowner's only choice is to sue and cross their fingers that a judge will sympathize with them. It is perfectly possible that the judge simply chooses not to and the homeowner has no further recourse.
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Love this, but I'll add more. The PB might go BK, and then you get nothing. Also, my father made the mistake of prepaying, and sued, and won, but the guy died, and he never got his money back.

sbcpool said:
Net 30 is pretty standard business practice. If your business margins are so small that you can't operate on net 30, your business is about to fail anyway. Believe me when I say you do not want a contractor that goes belly up in the middle of a project. Wait until you discover that his subcontractors can come after you even if you paid the contractor.
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When any contractor wants money up front, they are telling you something.

My remodel payments went like this:

10% at the beginning. This would have appeared to be an up front payment against what I'm telling you, but work had been done. I put my work on a delayed start, so there was a risk to the builder that I might change my mind, and they'd been out to the house 3 times. They brought tile samples, made best guesses as to hidden problems, took measurements, and prepared a quote. By the time that was done, and I was happy, by all rights, they were entitled to something. At least 15 man-hours of their employees' time was used up not to mention mileage on the company vehicles for three 40-mile round trips.

They did the demolition of the old plaster, and after that was done, the main office was calling asking for money, there was no NET 30, but all I needed to do was look out the window and it was pretty obivious that bare gunite was visible and there was no pile of debris.

Then the plumbers came and tested the existing piping and installed the new pump and filter, and the main office was on the phone asking for the money. There was no doubt that the pump equipment was there, and they gave me the books and warranty card, and it wasn't rocket science to see that the model numbers matched the quote, and I got exactly what I paid for.

The tile guys came and put in the tile. I think at this point you're getting the story that I got what I paid for each step of the way. Truth is, there was no way for me to really know if they were doing a good job because I don't have that level of expertise, but on the flip side, I had what I paid for so at worst I would only be out some money for annoyances, but nothing like when you pay a lot and get NOTHING.

The way they handled the work and payments instilled a lot of confidence that they probably did a good job. When I don't think someone is doing something shady up front, there is no reason to think I have to babysit everything else.
 
Yes, I think it is unreasonable to rewrite the contract and expect the PB to sign it. Negotiating a few terms is one thing, rewriting it yourself and presenting it for their signature is another. Sorry. Unless they are absolutely hurting for business, what is their incentive in agreeing to a contract written by the customer? I also work in the legal field and a contractor agreeing to do this would be a red flag for me that they have business problems. I could only see a whole sale negotiation like this if it was a huge project with sophisticated parties.

In the end, the contractor's personal principles and reputation are much more important than the actual contractual terms.
 
It has never made sense to me that pool builders get paid prior to work being done. I have to wonder how that started.

I am in new home construction and either the whole project is paid in full at the end (other than a nonrefundable deposit) or payments are made based upon completion of phases.

When I built my pool we bought the kit from a company that later went out of business. When they did there were several people who had paid in full for their kit and never received them. As far as I know they never recouped their money either.
 
I assume PB's started doing this because they can, there are numerous clients who will just sign whatever paper is put in front of them. Only every once in a while do you get a "complicated" customer who knows what they are talking about and the money isn't as "easy" to make. It's a shame really.
 

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