LIME REALTY GROUP wanted to expand a little bit on the last article we published in this series.  Mostly because we want you to understand these costs and give you another perspective.

Most areas of construction require a contractor license to qualify the business to function.  These types of professional licenses come with certain stipulations such as being bonded or carrying enough insurance.  The license holder is also responsible for passing required tests, continuing education as required by certain types of licenses.  In other words, they have to demonstrate proficiency and knowledge about their craft in order to get the license.

The reason I’m pointing this out is because the way we left the last article, you could draw the impression sub-contractors could and would simply charge willy-nilly for anything and everything they feel like they could get away with.  However, that’s not the case.

We have discussed the concept of the initial financial burden carried by a sub-contractor on behalf of a client and how that is a form of issuing a client credit and it is true they need to get that returned…  Hopefully with a profit, but it’s important to understand these professional licenses and business’ are regulated.  They can’t decide to charge you an astronomical rate for the credit they extend.  They are only allowed by law to charge up to very specific percentage per month.  

Business ethics is a part of the testing most contractors go through when they’re applying for or studying for their licenses.  Failure to abide by these rules can result in that business losing their license and no longer being capable of providing services of any kind in the building industry.  When you know this, you can certainly understand how most rational, sane sub-contractors wouldn’t jeopardize their ability to work by fudging their percentages.

At the same time, this is something a General Contractor keeps an eye out for when he’s hiring subs for a job.  If he suspects they’re overcharging, or trying to increase their profits by charging a high interest rate, he can report them and choose not to do business with them.

Understanding this may complicate everything we’ve already discussed, but it’s an important piece of the puzzle we felt needed to be put out there.  And it also helps to realize most sub-contractors are trying to produce an overall profit in their business, but they do so while navigating laws and rules that are in place to prevent them from taking advantage of a client.

We’ll have another article soon so keep checking back.  And remember, Lime is the clear choice for real estate in the Southern Utah area.  Call today!