Money Matters

Singaporeans Have Been Overpaying For Their Home Renovations – That’s About to Change

(Source: blog.moneysmart.sg)

Any Singaporean who’s had to go through the experience of renovating their home will each have their own traumatic experience to recount.But here’s the real issue – on top of the all the issues that you might have faced dealing with your home renovations, the real icing on the cake is just how expensive home renovations are in Singapore. 

With MoneySmart having been in the business of mortgage broking since the inception of the company, we’ve spoken to many homeowners, but when the incidences of complaints on renovation prices and shady contractors increased in recent months, we got a little curious as to what the industry is really like now.

What is the current situation with home renovations?

As is the case with many younger Singaporeans who are new homeowners, time is a huge factor that affects how hands-on they can be with regards to their home renovations.

What usually happens is they will engage an interior design company that will help with mapping out the overall design of the house as well as coordinating with sub-contractors, otherwise known as tradesmen, to help execute on things like electricity, plumbing, flooring, etc.

You then pay the company a tidy sum to pull all this together, and then pray very hard that they either don’t run away with your money or just leave your uncompleted flat in limbo. A rather scary proposition if you ask me for new homeowners forking out tens of thousands of dollars for a renovation.

Here’s the thing though – because these companies are hiring their own subcontractors, most of the times you have absolutely zero visibility on how much the cost of renovation truly is. Everyone just accepts that there is some level of mark up and pays for the convenience of having someone manage everything.

But is it really that convenient though? One of the other downsides of not having transparency on each of the tradesmen’s costs is the relatively ignored fact that you have no idea if these guys are even paid by the interior design company.

Yes. You heard that right. Tales of tradesmen going unpaid are certainly not uncommon. So what? Why should you care? Well, if you just think about it for a short second, if the tradesman didn’t get paid after doing the first job, do you think they’re going to come back and deal with any issues that arise after they’re done? We’re not even going into the fact that it’s the right thing for them to be paid.

 

So what can be done then?

We got a little curious after hearing so many of our customers highlight the fact that they felt they were overpaying for their renovations. What we found was certainly interesting.

There is a new wave of companies that aim to not only remove this practice and disrupt the industry as a whole, but also to make sure they do right by the tradesmen as well. One of the companies we found, a local firm called Let’s Go Direct, connects consumers directly to the tradesmen themselves. More on how that works shortly.

We spoke briefly to Mr Tan Lye Hee, Founder of Let’s Go Direct, who is a veteran of the industry with over three decades of experience. Having been burnt multiple times by errant vendors who have refused to pay him on huge contracts and know he won’t have the financial muscle to legally take action, he started up the company at what some may consider a relatively old age to be getting into the tech space.

What stuck out to us was his unwavering dedication to doing right by both the consumer and tradesmen, that most of the time, end up at the bottom of the food chain. He shared, “I know that this is the way business has been done all this while. These practices have been going on for decades and no one has done anything about it. So I decided to try and do business in the way that I felt was right by both the customer as well as the tradesmen.”

He also added, “I can’t change the way business is being done now, but I can change the way I run my own business.” That is definitely reflected in the way Let’s Go Direct helps customers out, but how exactly does a platform like this work?

 

How does this “new” system work?

Think about what would happen if you were able to get direct access to each individual tradesman and get quotations directly on your lighting, flooring, plumbing, and everything else that needed to be done. Once the job is done, you pay the tradesmen directly, and only deal with whoever is needed should improvements or changes need to be made.

No hidden markups. No shady companies to deal with. Companies like Let’s Go Direct also provide a service where one of their consultants, who is also a tradesman by nature, will be able to coordinate the entire project for you.

You then pay them a 10% consultancy fee for handling the renovation proceedings, but if you decide to be a garang soldier and go directly to everyone yourself, you can as well.

This sure as hell beats paying a 20-30% markup without even any real guarantee of service quality, and as we mentioned at the start, paying that much more for a renovation nightmare story is just… silly.

Firms like Let’s Go Direct are certainly going to change the industry in a big way and you’d be kicking yourself if you were still paying hiked up prices for your renovation. Not to mention that you can rest assured that the tradesmen that helped to beautify your home are properly paid. It’s time Singaporeans stop overpaying for their renovations and start telling stories of good renovation projects.

Do you feel like you’ve been overpaying for your renovations too? What are some of your experiences with interior design firms? Share them with us here!

Tags:

More Info: blog.moneysmart.sg

Advertisements