When you have something to repair, it’s common to get multiple estimates/quotes/bids. That’s what I did when I had to replace HVAC in my own home in the past. The cost differed drastically from less than $5,000 to more than $10,000. It would sound crazy then to just pick one company who ended up quoting you $10,000 and go with them. So why do I routinely get just one quote for my clients?
1. I know the cost: There are some differences between a homeowner like in the above example and the property manager. Chances are you only replace one HVAC system every 15 to 20 years. By the time you get to replace your unit, technology might be different, price is for sure different, so you basically have no idea what the price range would be. In that case, it would be wise to check out different quotes to be able to choose the best company that fits your need. But what if you run a property management company and have to change HVAC multiple times a year? You will have a good idea of what will cost how much. In that case, getting quotes from different companies may become unnecessary.
2. It takes time: Unlike homeowners, getting quotes for rental properties that the property manager is managing takes extra time.
- It may start out with the tenant calling you about an issue.
- Then you might have to go there to verify the issue.
- Then you call a company to set up a date they can come to the unit.
- Then you call the tenants that the company is coming (hopefully the tenants won’t have an issue with that date.)
- Then the vendor goes to the property to get an estimate.
- You have to repeat the above a few times to get multiple quotes.
- Then you talk to the owner to see which company they want to go with.
- Once the owner makes a decision, you set up the repair date.
While the above steps are necessary, it creates an issue. By taking time, maybe the tenants may get unhappy with the fact that the repair/replacement is taking so long. Tenants may not like the fact that different people are coming to their units. If the vendor is new, I need to get a W-9, and that could be an added extra time.
3. I already know who is good: From experience, I already know who is good and who is bad. Trying to find a good vendor becomes unnecessary if I already know who is good and the price is reasonable.
4. Vendors will stop responding to you: Even if I have a vendor I always use, sometimes they are not available, and I need to use a different vendor. But what if I was always calling them to get quotes (just so that you can say to the owner, “I got multiple quotes”) but never used them? They will think that I am not serious and may stop responding to me. I can’t blame them.
5. The price difference may not be significant anyway if any: Just because I call around and get different quotes doesn't mean that you will get a better deal. The one that I had in my mind might be the best deal to start with. In that case, I just wasted everyone's time.
6. Cheaper does not mean better: Imagine you have a job, you are working hard, you are producing good results, and everyone knows about it. One day your boss comes to you and says, "You have been such a good employee, and thanks to you, our company is doing great. Now, let me give you a pay REDUCTION." Well, that doesn't make any sense, does it? On the other hand, you have seen people who are not into what they are doing, and they are not afraid to hide it. You almost wonder why that person is still been employed. One day you found out that the person got a pay reduction. You thought to yourself, "Well, that makes sense." So then he do you think that contractors are any different? When it comes to our pay, we want to get paid MORE, but when it comes to contractors, we want them to get paid LESS AND do a good job. I wish it works that way, but it doesn't.
7. Property management fee may increase: If there is a law that says property managers need to get at least 3 quotes for every job, I probably have to increase my fees to cover the cost of spending my time getting quotes. Not only it'll increase the property management fees, but it'll more likely increase the cost of hiring vendors because now they are running around providing more quotes to those who won't hire them.
8. The more I use the same vendors, the more they will do for me (which means to you): As you know, I do NOT get any kickbacks from any of the vendors I use. That said, we are human, and we tend to do more for the people we like. The more I use particular vendors, the more they will do for me. What does it look like? Maybe they will work extra hours to get the job done, even when the hours are outside of their usual working hours. Or they may give some break with some repair cost. Or they won't make a stink about small jobs. The list goes on and on. It helps to create good relationships with vendors.
As you can see there are a lot of reasons why I don't necessarily get multiple quotes for all the jobs. That does not mean never, but hopefully, you have a better idea of where I'm coming from when you don't get multiple quotes.
