What is the Business Plan of the Repairman who Fixes Your House?

By: Fred Willcox
Copyright© 2012
All Rights Reserved

When buying a house or having a house repaired you need to investigate the type of business the contractor you are considering runs. Does he cater to individual clients like you or does he get his work through Realtors or insurance agents or adjusters? The answer may tell you what kind of result you can expect from the repair work.

I was an expert witness in a lawsuit that just settled. The circumstances of the lawsuit caused me to think about this issue. The settlement of the lawsuit involved a confidentiality agreement and, although I am not bound by that agreement, I do not want to cause any harm to my client so I will be a little guarded in describing what happened.

Here is a scenario. A house is damaged. An insurance adjuster is called. The adjuster determines what he thinks the damages are and what amount of money is necessary to repair the damage.

No problem so far.

Then the insurance adjuster recommends a repair contractor.

Problem.

Here is what you have to think about.

The insurance adjuster is probably not recommending the repairman because the repairman is the best at his trade. He recommends the repairman because the repairman will do the job for the money the adjuster allocated for the repairs.

This makes the adjuster look good.
The repairman makes his living by courting insurance adjusters. His business model is to do a large volume of work at a small profit. Nothing necessarily wrong with that except that, in order to do a large volume at a small profit margin, the repairman must go fast and he must not be concerned with details. The details that make the work perform properly and last for a long time. But the repairman is not worried about the quality of his work. You are not his client. The insurance adjuster is. The repairman is under no illusion that you will be a repeat client and he probably does not want you as a repeat client. He wants the insurance adjuster as a repeat client. You may only be worth one job every 5 or 6 years. The insurance adjuster may be worth 5 or 6 jobs a week.

The repairman who has a business model of doing quality work properly has to take more time to do the job properly. That means he does less work and must make more profit per job to make a living. But he does good work. He wants you to be a repeat customer and he wants your referrals.

In the case I was involved with, the repairman recommended by the insurance adjuster caused a great deal of water damage to my client’s house. The repairman then wanted to hire a company with the same business model as his to restore my client’s house.

The insulation in the exterior walls had been wetted which means that the insulating materials are worthless. Fiberglass insulating materials work because air is trapped between the fibers of the material. When the material gets wet, the material becomes dense meaning that there is little to no air trapped between the fibers. The insulating materials must then be replaced.

An indoor air quality test had been performed on the house and elevated counts of mold spores were found in the house. That means that the interior drywall covering materials needed to be removed and the framing of the house needed to be treated with a fungicide.

The repairman who caused the water damage admitted to causing the damage but he wanted to hire a repair company who makes quick, superficial repairs meaning that he just wanted to paint the interior of the house. He did not want to do a complete investigation of the damage caused by the water or to make all the repairs needed to restore the house to its condition prior to the water damage.

My clients wanted their house put back in the condition it was in before the repairman caused the water damage. In other works, they wanted the insulation in their walls and ceilings to work and they did not want to live with elevated mold spore counts in their house.

My clients prevailed fortunately. But they had to resort to hiring very good lawyers and experts and they had to go through the legal process for four years just to get the money to get their house back in its former condition.

When you are buying a house and you have an inspection performed, your Realtor often recommends a ‘reputable’ repair person.

You need to think about that ‘reputable’ repair person.

Often, the repair person your Realtor recommends has a business model that caters to Realtors. That means that the repairman knows that the Realtor needs the repairs performed quickly so that the house closes quickly and the Realtor gets paid. The repairman also understands that repair costs must be kept low so that neither the seller nor the buyer backs out of the deal because of repair costs. That means that the repairman is only going to repair the obvious issues. He is not going to look to find any other problems. Those other problems that may not be apparent but that should be discovered during the repair process then go unnoticed and unresolved.

And you don’t get the quality repair you were lead to expect.

This is not true of all Realtors. I know a couple of Realtors who only recommend high quality contractors. Of course, these Realtors make their livings off client referrals. They know the value of quality work. Their business model is to take care of their clients.

Before you agree to the employment of a repairman make sure that the repairman is going to do a thorough, complete job and that the repairman understands that he works for you.

It is your job to protect your own interest.