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Get multiple bids and go with the lowest qualified bidder. Don’t be distracted by smiles, etc.

Posted by John Reed on

We got AC work done today. One estimate was $17,767. The other was $9,142. This was to replace the heating and air-conditioning for the first floor of our two-story home. 

The second-floor systems were replaced about seven years ago.

The third company we asked for an estimate was the one who replaced the second floor HVAC seven years ago. They charged us over $12,000 then, so it is not likely that they would would have made a competitive bid this time. They promised to give us an estimate this time, but did not.

This got us a 3-ton, 14 SEER condenser and a new gas furnace and heat exchanger for about 1,700 square feet in living area. Last time we did this, I analyzed the gas and electric bills after a year. The electric consumption per cooling degree day dropped significantly, but not enough to get a five-year payback on the purchase cost. The gas consumption per heating degree day dropped only slightly.

How to Manage Residential Property book

Two lessons here:

In 2020, our relatively new 2nd floor condenser failed. No coolant. Why? A company who replaced a capacitor in it accidentally punched a hole in the bend in the copper coils which let all the coolant out. That is not repairable. It destroyed the condenser.

It was a disaster. August 2020 was the hottest August in CA history. We had great difficulty getting repairmen to come out. They were all swamped. It took us several weeks to stop sleeping on the family-room floor. One who came out was the company that created the hole in the coil.

That company gave us a whole new condenser for free. I was impressed. The check we wrote today was to that same company. In August 2020, when we were angry as hell, I made sure I did not express that to the AC company. I just stated the facts, said nothing about what needed to be done when, and did so as a test of the AC company. They passed the test by promptly giving us the free new condenser. When I called them recently for this job, I said the commendable way they treated us in 2020 was the reason.

The other company has all the professional TV commercials, full uniforms, extremely polite frequent phone calls, big smiles, they seem to have been hired more for appearing in commercials than working on AC. They deserve A+ on all the peripheral, making-a-good-impression stuff.

But the bottom line is the bottom line.

That company sent a commissioned salesman to our house. For hours, he made himself our family friend. Then he pressured us to commit to his company. We had not yet gotten any other estimates. He wanted to know what he had to do to get us to “trust him.” Failure to sign the contract after only his bid was not “trusting him.”

I kept repeating all this nice-impression stuff like the uniforms and the pretty trucks and the friendliness was just that—nice, but we were getting multiple bids and the low bidder was going to get the job.

We have a local magazine called Consumer Checkbook. I think it is a national franchise. They poll local readers and ask about quality and price of the various contractors. The company who bid $9,142 got top marks for quality and price. So did the company that failed to bid. But the company that would get A+ on every aspect of their relationship in the smiles, uniforms, trucks, friendliness categories, had no Consumer Checkbook good marks on quality or price, bid $17,767.

We designed the house and had it built from scratch in 1983. After only about six years, the downstairs condenser stopped working. Same one that was replaced today—32 years later. Three different companies came out, charged us for the diagnosis, and all three said we needed a new condenser.
I did not believe them. A fourth guy who only repairs and never installs new condensers fixed it for $100. Thirty-two years later, we finally replaced that condenser—because it needed a lot of coolant and used freon which has not been allowed to be manufactured for years. Were either of the two companies who bid on finally replacing that condenser among those who told us it needed to be replaced 32 years ago?
Yeah. The smiley one.

I suspect, somewhere behind closed doors, that company’s leaders have expressed the belief that all that peripheral “most popular in the high school senior class” stuff would enable them to have significantly higher profit margins than the less smiley AC companies in the business they are REALLY in: selling condensers. Joe Public does not know HVAC, but they know smiles and often fall for them.

And you know what? That smiley AC company is probably right.

Just not at my house.

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