OK, so we have all been asked to provide references to prospective clients, even those who have contacted us through a referral from a previous client.
The question is : is it proper to ask the future client for banking info so that you can run a credit check on them? I am talking about $75k and up projects. It seems to me that there must be a “tactfull ” way of doing this without offending anyone. I get the feeling that as the economy slows ( here in Ontario), that we need to be more and more carefull who we extend credit to.
I often thought about coming up with a psycological test to try and determine the mind set of some clients. Still working on that one.
Had one lady go on and on about the nightmares that her big city contractor caused her on her last reno. My work is in the lake country on vacation homes and I didn’t want to become her ” vendeta” contractor.You know,” maybe I can even the score somehow”.
Just wondering.
Replies
I just say "so how are we handling the financing"?
but it probably would be better to have a credit check clearance form (if there is such a thing) ready to simply slide across the table for sig's.
On the subject ... how do U even check someone's credit?
what's it cost?
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
On some projects it just make sense to have the clients set up their own account at the lumber yard.Then I have the lumber yard run a check on them through a credit bureau.They are pretty good at letting me know if there could be a problem.
The last I saw was about $25 at Mrlandlord.com
Yes, there is a credit clearance form. They are not hard to find. It's just the basic document getting the info and permission. They can be plain jane or hidden in a complicated doc.
You don't need to really worry about their credit unless you're extending them credit. Make your payment schedule work for you that if problems arise you leave with a profit and not a sad story.
Edited 9/4/2008 10:16 pm ET by shellbuilder
depending on the size and scope of the job ...
You've just blocked off a good number of working days that could have been sold to other clients. You can lose time , lose the schedule, not lose any hard cash ...
and still be royally screwed.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
You've just blocked off a good number of working days that could have been sold to other clients
At least I could go on vacation. Those who are in the construction/ lending their clients money business can start their next round of losses hiring lawyers. He who has the money has the leverage, an important part of business, always.
don't take it the wrong way ...
I do agree the first step is staying ahead on the pay schedule and not financing a project out of your own project.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Has anyone ever set up an escrow account? I wonder what the management fees would be?
At least with escrow you would know that the funds are there at one point. Maybe she could still stiff you with some legal wrangling, but at least you know that that $75k job is not going to be paid for by $25k that she's hoping to multiply in the next few months.
Jon Blakemore
RappahannockINC.com Fredericksburg, VA
In Maryland we have a website called 'Maryland judiciary Search', it has saved me numerous times from dealing with potential payment problems. Maybe where you live they have something similar.
http://casesearch.courts.state.md.us/inquiry/inquiry-index.jsp
I was looking at a job just a little while ago and went online to check the guy out. He was getting sued 27 times!
.
Yowsie! I'm going to see if we have something like that in TX.
very first time I had to take a client to the magistrates ...
had a friend of a friend look into the guys name.
he asked around the county courthouse ... guy was known for lawsuits.
either being sued or suing.
at the magistrates ... I won ... a split.
he couldn't have taken out his check book and written that check faster or happier.
bastard even complimented me on the job he tried to sue me over!
friend of a friend heard about 2 montsh later ... he was in court for similar ...
same lawyer ... and that time he won.
'cept now ... he was back in court ... being sued ...
by his lawyer ... for nonpayment!
thinking it kinda served then right.
what a way to live?
but he did have money.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
One time a builder asked me to replace about 20 pieces of Andersen glass in a house under construction. He said it was kids in the neighborhood. I looked him up online and found he was being sued by all his subs. Every time he would build a new house he would hire a new bunch of subs and not pay the previous guys.I told him I would do it but he had to pay, in full, before I started; which he did.I got home that night and one of his previous subs called me up as he saw my truck in the driveway. He asked if I had gotten paid and I said yes. He was on the hook for 24K.I told him about the website.......I wonder who really broke the windows.......duh!.View Image
There was just a thread about how job got cancelled in midstream by financing at WaMu or some such institution drying up.
It would seem perfectly appropriate to me to describe how it can go wrong for good people with good credit, and describe steps to keep it from happening.
In that sense it should go beyond a credit check, and turn into a plan B and C for the completion of the job.
That shouldn't offend anyone and you get assurances job is funded. I would ask a banker.