Do contractors charge you more if you live in a nice area?

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JustGotScammed
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Do contractors charge you more if you live in a nice area?

Post by JustGotScammed »

Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
DoctorPhysics
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Re: Do contractors charge you more if you live in a nice area?

Post by DoctorPhysics »

Shop out of the area. Get multiple quotes.
Somethingwitty92912
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Re: Do contractors charge you more if you live in a nice area?

Post by Somethingwitty92912 »

Always get three quotes. Take the middle one.
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Re: Do contractors charge you more if you live in a nice area?

Post by Sandtrap »

JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
**As a consumer issue related to personal finance," costs of home improvement and how to control those costs".

Yes. Not always. But. . .yes.

Why?
There is a perception of customer expectations (high) and abilty to pay for those expectations in higher priced and higher quality materials and the workmanship required.

Consumer finance actionable solution to control or otherwise moderate contractor costs in a HCOL area "for example".

1. Get 3 comparative estimates for the exact same project from reputable licensed contractors which include:
a) Price of the project, your financial costs.
b) What is and is not included in that price.
c) Time frame
d) etc.

Do you have a specific project in mind, budget, and financial aspects in mind?
(edit your original post to include this by using the pencil icon) "consumer finance/costs of contracting issue".
Also, optional, your experience and comparable experiences of others.)

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Grt2bOutdoors
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Re: Do contractors charge you more if you live in a nice area?

Post by Grt2bOutdoors »

Yes, in my experience the phenomena is called “zip coding”. I’ve had more than a few estimates come in much higher than expected simply because of the neighborhood in one part of the town is nicer than other parts of town. I just keep shopping around if the providers are performing similar quality work.
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averagedude
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Re: Do contractors charge you more if you live in a nice area?

Post by averagedude »

It is possible. Some contractors are so busy that they may throw a high estimate out there because they could care less if they get your business or not. It is always wise to get multiple estimates. Alot of these people have enough business that they could work 7 days a week if they wanted to. You would also be surprised how many people pay cash, which can be an added benefit for those contractors who like to shield income from taxes.
Normchad
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Re: Do contractors charge you more if you live in a nice area?

Post by Normchad »

Nice areas tend to be expensive area. And contractors and their employees probably live close-ish by. So unless you live in a nice place, surrounded by cheap living, I would expect the contractors to charge more.

They have yo live too. They have to live somewhere. They have to buy groceries. They ave to buy gas and soend gime driving to your house, etc. they just have a lot of the same expenses you do…..

And on top of that, if you have $300K of cars in your driveway, they might hike the price, reasoning that you’re not price sensitive and that you aren’t likely to DIY it……
stan1
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Re: Do contractors charge you more if you live in a nice area?

Post by stan1 »

One that we've used is to call the same person back multiple times when possible. The subsequent visits were a little less expensive because he knew we were easy to work with and knew our house didn't have a lot of "issues".
ACN
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Re: Do contractors charge you more if you live in a nice area?

Post by ACN »

Definitely. Multiple, at least 3, quotes is always recommended. We live in a nice gated neighborhood. Prices of homes are 400-2m. We got a quote for gutter guards from Leaf filter rep for $25k. He said if we sign the contract by Friday we'd get $10k off manager special.

My wife kicked him out of the house. We got equivalent guards through a mutual colleague for like 3k.

We saw a sign in someone's yard the other day for leaf filter and my wife cringed and said I wonder if they got scammed and paid $20k.

So get more quotes and yes you'll probably pay slightly more
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Re: Do contractors charge you more if you live in a nice area?

Post by mptfan »

Normchad wrote: Thu Jun 24, 2021 9:34 pm Nice areas tend to be expensive area. And contractors and their employees probably live close-ish by. So unless you live in a nice place, surrounded by cheap living, I would expect the contractors to charge more.
I don't think that's fair. There are may expensive areas that are close to areas that are less expensive.
runner3081
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Re: Do contractors charge you more if you live in a nice area?

Post by runner3081 »

Yes, they do. Now, the frustrating part is living in a $400k house amongst million dollar houses and still having to pay the upcharge!
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Re: Do contractors charge you more if you live in a nice area?

Post by chazas »

Absolutely. I get better pricing because I live in an area where a lot of contractors live.
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Re: Do contractors charge you more if you live in a nice area?

Post by J295 »

Get bids from appropriate vendors.

Obtain the goods/services when supply/demand is favorable to purchaser.
LongTermInvestor88
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Re: Do contractors charge you more if you live in a nice area?

Post by LongTermInvestor88 »

JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
If you can afford to live in a nice area. Why would you expect the contractors not to have more expensive outgoings to if live relatively close to you. You want to be able to afford to live in this area but don't want anyone else to by the sounds of it
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Re: Do contractors charge you more if you live in a nice area?

Post by boogiehead »

JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
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baconavocado
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Re: Do contractors charge you more if you live in a nice area?

Post by baconavocado »

I have a hunch that the best contractors work in areas where property values are higher (and they can charge more) and the more inexperienced/marginal contractors work in areas where property values are lower and owners might balk at high bids.
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Re: Do contractors charge you more if you live in a nice area?

Post by Kagord »

I have several rentals in blue collar neighborhoods, and I get quoted a lot cheaper there. I'd estimate 50% cheaper for common things (HVAC, plumbing, flooring...etc). But I have to qualify, that these are contractors that cater to property managers, they don't advertise, and are high volume/busy outfits, and they are definitely not driving pretty painted vans or new 80K trucks.
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Re: Do contractors charge you more if you live in a nice area?

Post by michaeljc70 »

Not all, but most, yes. They even charge you more based on how your house looks. Like just about any business (that doesn't have fixed pricing), they charge you the most they think they can get. If possible, I try to get estimates on easier/less complicated projects via text/email sending pictures and dimensions.
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Re: Do contractors charge you more if you live in a nice area?

Post by GoldenFinch »

Where I live, yes.
johnubc
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Re: Do contractors charge you more if you live in a nice area?

Post by johnubc »

Yes.

One does hope that the 'affluent' upcharge does equate to a better quality job - however, that is not a guarantee.
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Re: Do contractors charge you more if you live in a nice area?

Post by snackdog »

Absolutely they charge whatever the market will bear. If they visit your home they will size you up as well and adjust their quote accordingly.
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Re: Do contractors charge you more if you live in a nice area?

Post by Harry Livermore »

"Do contractors charge you more if you live in a nice area?"
Is water wet?
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Re: Do contractors charge you more if you live in a nice area?

Post by CoastLawyer2030 »

JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
I think this is a slam dunk yes. I moved in 2020 and the physical distance was less than a mile; but I went from your standard suburban neighborhood and my 1,050 square foot ranch to a 3,100 square foot house in a neighborhood that is adjacent to the country club. It doesn't help that the former owner of an NFL team built an 18,000 square foot house right across the street.

The estimates and upsells make me want to puke. Just one example is lawn service -- I live on about half an acre (and my house/flowerbeds take about 40% of this half acre), but they wanted to charge $65/cut. My yard takes 35 minutes with a push mower.
ddurrett896
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Re: Do contractors charge you more if you live in a nice area?

Post by ddurrett896 »

100% yes. My parents live in a MCOL area but love expensive cars. I always tell them to park them down the street and wear junk cloths when contractions come over to give quotes.
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Re: Do contractors charge you more if you live in a nice area?

Post by Jack FFR1846 »

It could depend where the contractor lives. We had a bunch of work done. We saw the contractor working on a neighbor's house and asked them how the work was going. They were happy with it so we took a look and then asked the contractor to come take a look at our project.

We live in Metrowest, about 25 miles west of Boston. Expensive area to live in. The contractor came from Warren, which is in Western Mass, where the contractor was having trouble finding jobs to do, which is why he was driving 60 miles to our area. His rates were 2/3 what the local contractors quoted. He was very flexible and helped in some of the planning to enlarge a bedroom, put down hardwood flooring and do a few random projects.

I get it that a local contractor is paying a mortgage on a $600k house while our contractor was paying a mortgage on a $175k house. This isn't just a contractor thing. People quite often live in a lower cost area and commute to work. I've seen this many times at my workplaces.
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Re: Do contractors charge you more if you live in a nice area?

Post by Cyclesafe »

Yes. Two experiences stand out.

First. When we needed someone skilled and experienced to repair stucco after I installed a larger kitchen hood vent, I got a call back after I had verbally agreed to a quote, that the estimator made a mistake by not taking into account my zip code. $200 went to $400 and we ended up splitting the difference. I wasn't going to quibble as I had a hole in my house that I could fix for $300. They did an excellent job.

Second. When I got three quotes for garage doors including installation, I parked my cars well down the street, putting several teenager's cars and their parent's commuter cars between where I parked and my house. But I couldn't hide my zip code.

When I was about to settle on one quote, I decided to make a few more calls to installers from well out of the area. I had a productive conversation with an estimator who actually volunteered that her company did not manipulate quotes for zip codes and not even if there was a Lamborghini in the driveway. This is a thing!!!

I invited her to come and estimate. She proved more knowledgeable, more helpful, and more accommodating than any of the more local vendors and quoted 20% below my lowest quote. She also only needed 10% down for custom doors while the alternate quote would have required 100% upfront. (All vendors were BBB A+, licensed, and in the business for at least a decade). BTW, I moved the cars anyway, of course.

Contractors usually look to extract as much money as they can from a homeowner. Our only defense is to more widely get estimates or to DIY using YouTube videos. My wife and I have saved tens of thousands. We have gained skills, a garage full of tools, and most importantly a sense of satisfaction that we did the work ourselves - work that was of quality not just slapped together. We also used the best materials available, not materials that the contractor could "buy for us" that afford the highest mark up for him. Plus we didn't have a constant stream of strangers coming to our house intermittently and unpredictably to inch the project along.
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Re: Do contractors charge you more if you live in a nice area?

Post by Carousel »

Friend said her contractor talked about his "BMW tax." If there was a BMW in the driveway he added 10% to the quote. He said those clients always called him back to make him redo something--he just didn't know what it would be and the 10% covered the extra work.
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Re: Do contractors charge you more if you live in a nice area?

Post by MrCheapo »

DoctorPhysics wrote: Thu Jun 24, 2021 9:11 pm Shop out of the area. Get multiple quotes.
Yes. That's exactly what I do but it only works because the neighboring areas are poorer (relatively speaking).

YELP has the facility to allow people to bid on smaller projects and I find that may pull out a contractor or two who are under-worked and bid good prices.
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Re: Do contractors charge you more if you live in a nice area?

Post by carolinaman »

My daughter lives in Mt Pleasant, SC which is a suburb of Charleston and has a lot of upscale neighborhoods. My SIL served as GC when he built their home. The jokingly referred to the Mt Pleasant premium contractors charged for working in their town. Some contractors charged different prices for Mt Pleasant versus other towns in the area.

I think the adage "charge what the market will bear" fits your question.
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Re: Do contractors charge you more if you live in a nice area?

Post by toomanysidehustles »

ddurrett896 wrote: Fri Jun 25, 2021 7:22 am 100% yes. My parents live in a MCOL area but love expensive cars. I always tell them to park them down the street and wear junk cloths when contractions come over to give quotes.
Haha yeah I always tell my wife to remember to keep the garage doors closed when people are coming to do bids! T-shirt and cut off jean shorts too. :D
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Re: Do contractors charge you more if you live in a nice area?

Post by flyingcows »

Yeah, when my wife and I moved to our current “upscale community” we always joke with each other about service people applying the [Neighborhood Name] Surcharge. Not sure how else to mitigiate besides multiple quotes, which may not be helping much, but worth getting multiple bids regardless
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Re: Do contractors charge you more if you live in a nice area?

Post by Broken Man 1999 »

stan1 wrote: Thu Jun 24, 2021 9:41 pm One that we've used is to call the same person back multiple times when possible. The subsequent visits were a little less expensive because he knew we were easy to work with and knew our house didn't have a lot of "issues".
We do the same. Yesterday I gave my accepted proposal to the owner of the company doing some drywall and painting, though job had started last Friday. He didn't ask for any up front money either, never has, so far. The company does premium work, and we pay premium price, gladly. We also didn't have to wait weeks and weeks for the start of the job.

Cultivating good relationships with in-demand trades people, once experienced, pays off. You know the quality of work will be excellent, and they value your business.

Earlier this year it was near impossible to get anyone out for a bid for just about anything. If I had waited to get three bids for my current project I probably wouldn't have been able to get started for a couple of months. Instead they will likely be finished today. A couple of days we had three painters working away.

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Re: Do contractors charge you more if you live in a nice area?

Post by Colorado14 »

Yes, which is why I dislike being asked to disclose my location early in conversations regarding home projects. The contractors see dollar signs when I reveal my address. I live in a very modest home, but in one of the wealthiest (#7 I believe) counties in the U.S. So I definitely pay a surchrage as a result.

This substantial drawback to my location is outweighed by other benefits. It's certainly frustrating to be viewed as a bottomless source of money when that's not the case. First world problem...
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Re: Do contractors charge you more if you live in a nice area?

Post by gwe67 »

I live in a modest home and drive cheap cars. It's not obvious that I'm a multimillionaire. One contractor gave me a "poor boy discount". I didn't argue.
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Re: Do contractors charge you more if you live in a nice area?

Post by lazynovice »

Yes, the quotes are higher but if you let them know you are getting multiple bids for a large job, that helps keep them competitive. Using the same contractors over the years helps too. They know whether you are a PITA or not. Sometimes we don’t get multiple bids if we are using someone we have used before. In our last house we used four or five contractors many times (painters, landscapers, small construction). We had a neighbor who felt the need to negotiate and “win” every bid. Contractors usually worked one job for her and never returned.
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Re: Do contractors charge you more if you live in a nice area?

Post by vitaflo »

On a positive note they're also more likely to show up and do quality work in a timely matter because you're paying more.
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Re: Do contractors charge you more if you live in a nice area?

Post by SQRT »

Probably higher and as others have noted there are ways to minimize (but probably not eliminate) this effect. I would suggest that if this really bothers you and you feel it’s significant, you probably should live in a more modest neighborhood.
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Re: Do contractors charge you more if you live in a nice area?

Post by redmaw »

I am sure contractors add bump up the quote a bit if they think you are loaded, but there may be legitimate reasons to factor in the zip code when quoting.

I worked for a fencing company for a summer in college, and some of the nicer areas had some more requirements. Think depth of holes, inspectors coming out to check depth, underground utilities making digging more tricky, no place to park the truck, ordinance on when work can start/has to stop. I am reminded of one particular job where we waited an hour for the inspector to show up, he dropped a pole in 1 hole, grabbed it without looking at it and said not deep enough (despite being at least 2" deeper than required), turned around walked away. In total we wasted at least 1/2 a day for an inspection no other town required. You think the owner charged more to work there? You bet.
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Re: Do contractors charge you more if you live in a nice area?

Post by Abe »

It goes both ways. Some will charge more in low income areas.
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Re: Do contractors charge you more if you live in a nice area?

Post by gwe67 »

People get charged more when they are willing to pay more. Happens all the time with cable, phone, airline seats, insurance, etc.
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Re: Do contractors charge you more if you live in a nice area?

Post by JackoC »

Somethingwitty92912 wrote: Thu Jun 24, 2021 9:12 pm Always get three quotes. Take the middle one.
I agree, the only practical countermeasure to this phenomenon, if it really exists, is getting multiple quotes. And as others mentioned, depending what 'nice' area you are talking about and comparing to what 'not nice' area, the actual costs to the contractor can differ*. The demands of the customer may also differ (even if you're not aware you are doing that compared to a 'not nice' area customer). There is no point IMO in getting into a sulk about perceived 'market failure' where you get competitive quotes but nonetheless all the participants are charging you more for no actual reason of higher costs to them or more demanded by you. I doubt that's actually the case, but even if it is, there's nothing you can do about it but get multiple quotes, or move to a 'not nice' area. :happy

*here it was at one time 'not so nice'. In the last ~40yrs it's become 'quite nice', house prices have increased astronomically. But it's the same, now ~120-140yr old stone row houses. Quotes from standard internet sources about peak roof wooden suburban houses for various things are not applicable here. To start with the contractors are facing inner NY area costs, not only for their inputs but how much they seek to make out of the business to live their own lives: not worth it to be in the contractor business here if you only make the same profit as low cost area contractors. But further, it's harder to do stuff in these old houses, the adventure of trying to get the new wide fridge in during the kitchen remodel a few years ago springs to mind. Comparing prices to get stuff done here even compared to suburban peak roof wood house towns in suburban northern NJ is still apples and oranges, not just a function of 'nice' or not; here is more like the City than like the rest of NJ.
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Re: Do contractors charge you more if you live in a nice area?

Post by Trader Joe »

JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
Yes, most definitely.
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Re: Do contractors charge you more if you live in a nice area?

Post by skis4hire »

Recently one contractor had a tablet to do scheduling, quotes, and billing. As he was using it, I noticed their software connected to Zillow to show a picture of our house, the square feet, # bedrooms and the latest Z-Estimate. I thought that was a little suspect.

We did end up using them after getting a few quotes and their quote came in at a reasonable price.
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Re: Do contractors charge you more if you live in a nice area?

Post by valleyrock »

There's multiple quotes. But there's also multiple recommendations. Word of mouth. Nextdoor.com . Facebook.com (although I avoid Facebook on general principles). Angie's list can also help. When a contractor has a lot of good recommendations as being competent and reasonable, that's a good place to start to leave a polite phone message.

It's important to adjust one's expectations as to what constitutes a fair price. Some areas cost more because labor of the competent kind costs more. And for many jobs, a contractor can't give a binding price until they get into a job. That's reasonable. Time and materials is fair. If it takes more time and more materials because something was uncovered that needed addressing, that's fair. For example, roof work can cost more than anticipated after the singles come off and rotten wood underneath is exposed. So, factor that thinking in when comparing estimates.
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Re: Do contractors charge you more if you live in a nice area?

Post by livesoft »

JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
Orthodontists do. So select a less expensive orthodontist in a neighboring area.
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Re: Do contractors charge you more if you live in a nice area?

Post by JackoC »

livesoft wrote: Sat Jun 26, 2021 12:29 am
JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
Orthodontists do. So select a less expensive orthodontist in a neighboring area.
Somebody paying rent for an office in a 'nice' (expensive rent) area naturally charges more than somebody in a low rent area all else equal. Again we live in a place that was 'not nice' (to some at least) when we moved here almost 40 yrs ago but now has a reputation for eye popping real estate prices. The types of shops and restaurants generally have also changed as the clientele has. But a few restaurants have been here all along and I think you can see the effect of rents being so much higher, relative to CPI increase in that time.

For somebody without fixed overhead tied to real estate price, no other actual cost difference to them on jobs in the 'nice' area, but in competitive bidding they'd still all try to skim off an extra premium in free money? I'm still somewhat skeptical how significant this is. But again, there's no reason for knock down drag out debate about it: whether or not it's true, all you can do is get multiple quotes.

But back to rents, I agree in general if you shop in more rundown looking places, though not areas where very high 'shrinkage' from employee theft and shoplifting has to be made back up in prices, and some other exceptions I've noticed*, you may tend to get better bargains.

*the car dealer row in a working to lower class area fairly near us have low tolerance for hagglers IME. They have a clientele focused on 'just get me approved for a monthly payment I can barely afford' and are not going to waste time being nickeled and dimed by non-subprime buyers, if the regular business is going OK. Dealers in somewhat 'nicer' areas a similar distance away deal with higher score hagglers as a significant part of their regular clientele and are used to playing ball with them. It seems that way.
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Re: Do contractors charge you more if you live in a nice area?

Post by scorcher31 »

Yes and its not just related to cost of living. If I was a few miles away in one of the ritzy towns I would pay more. We usually luck out because we look young and are in a poorer area. We give the impression of young family just starting out without a ton of money. We paid 7k for a good energy efficient ac and gas furnace. In a neighboring town it would probably be 12k.
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Re: Do contractors charge you more if you live in a nice area?

Post by illumination »

A thousand times, yes.

I have a relative that was a general contractor and home builder who is one of the most honest, decent people I know and even he conceded he also does it.

About the only defense is to get lots of quotes and tell people you are getting quotes.
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Re: Do contractors charge you more if you live in a nice area?

Post by Grt2bOutdoors »

LongTermInvestor88 wrote: Fri Jun 25, 2021 12:56 am
JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
If you can afford to live in a nice area. Why would you expect the contractors not to have more expensive outgoings to if live relatively close to you. You want to be able to afford to live in this area but don't want anyone else to by the sounds of it
Ha! Here's a better one - not only do they charge by where you live, they will charge more if they know your profession. How do you like them apples? Should you be charged more because you chose to become a medical professional or an attorney?
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SQRT
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Joined: Sat Feb 05, 2011 8:44 am

Re: Do contractors charge you more if you live in a nice area?

Post by SQRT »

Grt2bOutdoors wrote: Sat Jun 26, 2021 7:43 pm
LongTermInvestor88 wrote: Fri Jun 25, 2021 12:56 am
JustGotScammed wrote: Thu Jun 24, 2021 9:10 pm Do contractors charge you more if you live in a nice area and they think they can get it. If so, how do you address this if you live in a nice area.
If you can afford to live in a nice area. Why would you expect the contractors not to have more expensive outgoings to if live relatively close to you. You want to be able to afford to live in this area but don't want anyone else to by the sounds of it
Ha! Here's a better one - not only do they charge by where you live, they will charge more if they know your profession. How do you like them apples? Should you be charged more because you chose to become a medical professional or an attorney?
I guess you could take this thinking a little further? Maybe things like expensive car, expensive clothes, jewelry, as well as already mentioned neighborhood and profession might signal the contractor.

Easy solution. Look poor, live in inexpensive neighborhood and drive an old beater. The ultimate “stealth weath”. Keep all the nice stuff hidden away. :happy
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