The 3 Bid Myth

Hiring the right remodeling company is one of the most important decisions you’ll make during the entire renovation process for your home.

You’ll be living with the contractor for several weeks or months, and the quality of your contractor’s work for many years to come, so it’s essential to find a remodeler who is a good match for you; someone who understands your family’s needs, provides the level of service that you are looking for, and who takes the time to help you make the right decisions so that you do "the right project" with the right scope of work within a sensible budget.

Some clients have a tough time hiring a remodeling company—and many people believe that they need to get three or more competitive bids in order to get an affordable deal, thinking nothing of shelling out tens of thousands of dollars and opening up their home to a remodeler who they have selected based on price alone.

Unfortunately, the three-bid rule of construction is a myth. Choosing solely on price, spending a little less and getting to an end product that you are less than thrilled with is no bargain, particularly if that route is stressful, random, and out of control. It’s said that “the bitterness of poor quality remains long after the sweetness of a low price is forgotten."

When Does Three Bids Work?

Three bids works well when you are buying a tangible product, like a car. You can see what it looks like and take a test-drive to see how it performs on the road.

It's much easier to compare bids from several dealers on a particular make and model of a car than it is to compare several bids from different remodeling contractors. With the car, you’re effectively comparing the same product—but remodeling is different for five primary reasons:

1. Variation in the project that you will be getting. You can’t see what you’ll be getting project wise up front. With a building project, you're purchasing a "design concept" not the fully fleshed out solution that you will have down the road. If you ask for bids too early, they may be based on design solutions of different complexity, including different features, levels of finishes, and levels of detailing. Due to the incomplete or vague scope of work, unbeknownst to you, one company may bid the Chevette level project and another the Lexus level project. Typically, all you get is an overall price, and maybe a big surprise later when you discover what it did or did not include.
2. Unforeseeable variation in the execution: Contractors vary in the detail of project planning, the quality of work, and the ability to stay on schedule, and various other intangible factors that can't be viewed on a quote. Find someone that you trust to complete the project in a timely fashion to the quality level that meets your expectations.
3. Variations in your involvement level: Contracting runs the gamut on this one. Are you looking for a turnkey approach, where someone else worries the details, or do you want to be the general contractor and be involved in every detail and solving every minor issue that comes up? Will the contractor take any problems that come up by the horns, or will you need to run home from work or cancel your tennis game to figure out details that should have been figured out up front?
4. The nature of the remodeling journey. This can be totally different depending on who you choose. Will it be joyful? How will your home and your sanity be protected? Are the tradespeople polite, respectful and caring? Will you be kept informed about any schedule changes? Will everything be done as expeditiously as possible to get your life back to normal? Or will you come home to loud music, cigarette butts and a project that seems to take forever to complete?
5. The opportunity to be taken advantage of by dishonest contractors. Unfortunately, if you don’t dig deep enough and weed these folks out, they may take advantage of your lack of experience and provide price estimates based on shoddy materials, vague guidelines, doing work without licenses or permits, and/or poor work quality.

Price-based selection is NOT the best way to hire a remodeling company. Base your selection on overall value rather than just on dollars alone and look for the contractor that is the best match for you, your job, and type of work. It’s a brighter path, a better way.

So how do you find the best remodeler for you?

How do you evaluate a contractor's overall value if you can't see it up front? Here are the top ten characteristics to look for.

1. Good listeners.

Look for remodelers with a “listening ear.”The initial rounds of conversation about project scope, designs and budget range give you and the prospective remodelers the opportunity to get to know each other better, and for them to get a feel for exactly what you have in mind ( if they are good listeners!).

If they’re pretty good listeners they’ll take some notes and photos of your home. They’ll combine your wishes with their knowledge and expertise to help bring your vision to life, starting by showing you some design concepts.

Tip: A low bid can be way off if a bidder hasn't taken the time to understand your needs and fully spec the project. If it seems too good to be true, it probably is!

2. Folks with integrity, and a solid history

A professional remodeling contractor should instill confidence in you with their ability to provide insightful solutions, stay within budget, and perform work on a timely basis. They will be proud of their past remodel projects and will have a string of happy clients following in their wake that you will enjoy talking to. You want someone who has the entrepreneurship, grit and gusto to go the mile for you if and when the going gets tough.

Look for someone with deep experience; a track record for keeping costs down when unexpected problems come up. There are often several ways to resolve things. Look for a contractor with the drive, integrity and honesty to find the best, most cost effective solutions to keep your budget under control. With the suggestions they offer and the guidance they provide, you will end up with great results and the best projects, for the most reasonable price.

Tip: Unqualified or inexperienced companies. can provide low bids that result from gross estimating errors. They may disappear under cover of night when they come to the realization that they grossly underbid your project and don’t have the money to finish it. It happens.

3. Good Communicators

You want someone with whom you can develop good rapport. You need to be able to feel comfortable to talk freely, and even share a few laughs.;

You want someone who looks for win-win solutions. There is give and take, back and forth between a contactor and a client that helps develop the optimum projects and keep costs in line. Without this ongoing dialogue to which the remodeler contributes his expertise, you are likely to end up with ‘surprises’ along the way that result in delays and cost overruns.Learn how the contractor deals with documentation during a project. Good documentation is an important part of good communication. A sound, detailed contract is critical for the smooth completion of any remodel project. Vague or unclear contracts can be the beginning of poor communication. You want someone who documents all the changes, especially the ones with no cost! This eliminates misunderstandings and many hours of arguments over what you should pay for. When the contractor says “of course we can do that”, it’s important to agree with one another whether it is a billable extra. You don’t want to be in the position of arguing over these kinds of billing issues at the end of the project. It doesn't take much for a little miscommunication to snowball into an avalanche of problems that are expensive, upsetting and an unproductive use of valuable time.

4. A team

You want a contractor where there is truly a team working for you. At all stages of the project you want to know that the company’s owners, designers, office staff, and project managers will be leveraged to ensure things move quickly and smoothly and that costs are considered along the way.

You want a team who can step in for one another, back each other up. While they will have different areas of specialty and expertise, they should all have passion for remodeling, and know what they are doing, listen to you, and understand your needs.

5. Creative designers

How is the overall aesthetic of their jobs? How do their projects blend in with the rest of the house?

Are they creative? Innovative? Can they think outside the box? Can they bring the best solutions to the table both while designing and when your project is being constructed? Not everyone has the expertise and talent to bring those to the table. It is helpful if you can get a sense for whether your contractor has this up front.

6. Good project managers and problem solvers

Excellent project management also helps avoid adding extra stress to your life. Getting an addition or remodeling project completed for your home inevitably involves some temporary disruption to your normal life, but top-notch project management will keep things going smoothly.

You are looking for someone who is well organized with good systems in place, who can execute well.

7. Quality Craftsmanship

Look for a remodeler with absolute dedication to craftsmanship, someone who pays attention to the detail, doesn’t take shortcuts, and installs superior products that are more durable.

It will mean that you’ll love your finished remodel or addition, and you’ll have the ‘peace-of-mind’ that it was done right and built-to-last.

Look for a contractor who hand-picks skilled individuals who can work around people all day long. It is also important to know the people who enter your home. Look for someone who does not shop for workers for each job, but has a family of tradespeople whom they trust and work with regularly and repeatedly on their jobs.

8. Professionalism Matters

First impressions are important—and the little things your contractor does can give you a good indication of his or her personality. Think about how your phone calls or office visits were handled. Were calls returned promptly? Did someone greet you when you stepped in the office? Did the contractor take the time to thoroughly explain your estimate to you? Find someone who clearly cares about his or her work and who knows how to treat you—a potential client—with respect.

9. Stand behind their work

How do they stand behind their work? With gusto and a smile? Another indication of professionalism is the remodeler’s warranty. You don't want here-today gone-tomorrow operators.

Most remodelers offer some sort of a warranty. Check its duration, and what it covers. Of course, a warranty is only as good as the company backing it. How quick do they come out? How do they handle items outside the warranty?

10. Love what they do.

You’re looking for regular people doing what they love, and not high-pressure salesmen trying to "close the deal" on the first visit.  Need another sentence here.

How to determine who has these characteristics.

1. Get to know them well.

No job interview begins by negotiating salary, and hiring a contractor should be no different. Before talking price, you want to be sure you have a qualified applicant that you want to work with.

This involves a combination of getting to know them as you talk through your design objectives and preliminary budget, checking their references, and getting a sense for the quality of their work and the experiences that other people have had with them.

2. Check the prospective remodeler’s references.

It’s important to talk with people who have hired the remodeler to do jobs similar to yours. A beautifully remodeled kitchen or bath sheds little light on the remodeler’s ability to add a second story to your home.

Speak  to references from various companies to see if they feel they were treated fairly, were there lots of change orders adding cost during the project, did they have a good experience, did they have good design ideas, etc.

In the end, the proof is in the results. The most telltale question you can ask a reference is, “Would you hire this contractor again?” The enthusiasm with which this question is answered can usually tell you everything you need to know. You want to know if they ended up with great designs, usable and functional space, and very high quality craftsmanship. Did the projects finish early or on time relative to the agreed upon timeline? You want to know that the tradespeople doing the work have done top notch work and have been great to have at the house. You want to know that clients love the work that has been done in each of their projects and that they've had no reservations calling them for another project or recommending their work to friends.

Ask also about how they dealt with any bumps in the road (all projects have at least a couple), and how well the project was executed, along with any issues or concerns with quality, surprise costs, workers or how long the project took to complete.

3. Look at their Work

After you’ve talked with past customers, take a look at the remodeler’s work. You can get a good sense from their portfolio, and it's always nice to see a project in process. Check the quality of the craftsmanship and materials, overall aesthetics and creativity, and how the projects blend in with the rest of the house.

Final Decision

Choose the company whom you will work with not on the basis of price alone but on who is the best match for you.

Your final decision may very well come down to how comfortable you are with the remodeler and how communication flows between you. Remember that the remodeler will be spending many hours in your home, so it’s important you feel comfortable with him or her right from the start. You want someone with whom you can  work together, combining your ideas and their expertise to turn a vision into a fulfilling reality.

It's worth the time to do good research and invest in good quality. You'll have peace of mind, and avoid the expensive headaches of having a low ball bidder take the roof off your house, disconnect the plumbing and leave no forwarding address as he skips out without finishing the work.