The process of selecting a contractor to do your home remodeling project can be daunting. First comes locating the contractor, then the interview, contacting their references, verifying insurances and licenses. Once this is settled it is time to move forward and start receiving estimates or "bids". Construction bids are unique animals. When you are considering buying a new car you can see what the finished product looks like. You can also take it for a ride to see if it feels right to you. With a construction project you have no idea what the final result will be. You can only make a decision based on what you see on paper and getting to know the contractor.
The Bid or the Contractor- What is More Important?
One question homeowners will always ask themselves when reviewing bids is - "Which one should I go with?" Maybe the correct question should be "Which contractor do I feel most comfortable about hiring?" When it is all said and done most homeowners will look back at their remodeling project and the first question they ask themselves is typically-did we hire the RIGHT contractor for what we wanted done? If the contractor did a great job and was a pleasure to work with a homeowner couldn't ask for more. Very seldom is the cost of the project even considered at this point.
But what if the project was a living nightmare - does having saved some money really matter to the homeowner at this point in time? Believe me, it is the last thing on their mind. All they wanted was to hire a good, hard-working, ethical contractor they could trust and pay a fair price for his/her expertise. But now they will only look back and remember hearing "My price can't be beat" or "I'm cheaper because I don't have the overhead" or "Hire me today and I'll give you a great deal." They feel like idiots because they were gullible and went with the cheapest estimate. Don't let cost be the deciding factor in who you hire.
"Low-Ball" Bids
When a contractor deliberately under bids the real price of the job hoping to be hired it is called a "low-ball" bid. These bids are generally much lower than any other bids you have received - usually 20-25% or more. Many are done intentionally by unscrupulous contractors while others are presented by contractors who are incompetent and they may have overlooked unavoidable costs. Either way, these are not the contractors you want working in your home. These contractors are hoping that the homeowner will only consider cost when settling on who they should hire.
Low-ball bids will often include poor quality materials, inferior craftsmanship, no insurance and/or licenses, poor project management, dragged out projects, and a failure to perform the required work safely. It is very typical as your project proceeds that the low-balling contractor will find reasons to get you to raise the price up to what the bid should have been originally and present you with change orders to accomplish this. Don't let this happen!
Let's look at an example of a possible "low-ball" bid:
You have received 3 estimates from contractors you are considering hiring. One estimate is for $11,000, another is $10,500 and the third is $7,800. Ask yourself why is there is more than a $3,000 difference between the high and low bids? Are all the contractors bidding on the same materials, labor and fixtures? Are they all licensed, insured, and have provided you with a written contract and guarantee? Are the allowances all similar? The low estimate should be a "red flag" - proceed with extreme caution.
Which Bid Should You Choose?
Your "gut-feeling" will come into play as you interview various contractors-listen to it! It carries more weight than you realize. Don't let cost be the deciding factor in who you hire.
1) If you receive a bid that is very low, don't even consider it. Stay away from contractors that offer you such a bid. Low-balling is, in my opinion, dishonest. Possibly the worst reason that a contractor might submit a low-ball bid is that they have no intention of doing the work. They may start your project but they won't be around for too long.
2) If you receive a bid that is way too high, eliminate it also. Some contractors will purposely bid high on a job they don't really want just to see if a homeowner is foolish enough to hire them anyway.
3) You should now be left with the "middle bids" and hopefully a contractor that you like.
Also consider this when deciding on what bid to accept:
60% of your decision on who to hire should be based on their workmanship skills, experience with projects like yours, and reference checks.
30% of your decision should be based on the contractor's ability/experience to keep the project moving forward, communication skills and cooperation.
1056A% of your decision should be based on the actual cost of the project.
Don't focus on the cost of your project when selecting a contractor. This only gives you tunnel-vision to what really needs to be addressed. Planning and lots of patience will head you in the right direction when a home project becomes part of your life. Do it right the first time and your project will be a success.
Paul Lawrence has owned and operated Home Project Partners, a free Maine-based contractor referral service, since 2002. He helps bring homeowners together with reliable, quality-conscious, pre-screened home contractors skilled in numerous trades. Paul makes presentations to realtors and other groups that have an interest in his service. He has also taught adult education classes showing homeowners how to find contractors on their own and to learn how to properly screen a contractor.
For more information contact Paul at info@HomeProjectPartners.com or visit online at http://www.HomeProjectPartners.com
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