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August 7, 2019

Why is it that when women get their haircut they always seek out the same stylist repeatedly? They never call around town to get three price quotes from the different hair salons to see who has the lowest price on hair cutting. Why is that? Because they want the job done right and the cost is secondary. Why should one stylist be any different than the next? After all they are just cutting hair. All the stylists went to beauty school and all the stylists are licensed by the state. Yet women seek out these stylists regardless of cost due to their ability to get the job done exactly the way they wanted.

Too many homeowners believe they need three bids. They consider it due diligence. They have been told to get three bids by their friends, their banker, the news media, and their architect. The idea, of course, is to compare proposals and make an informed decision. Homeowners don’t realize that the only thing they can compare is price and that’s a terrible way to make a major decision about their most valuable asset.

Comparing three bids assumes that you the homeowner can review multiple quotes for your project and picking the one that is the best deal. Does this work? No. Most homeowners lack the knowledge to do a realistic comparison of one contractor’s proposal to the next. In my 40 years as a contractor I have probably run into 3 or 4 people with enough knowledge of construction practices and materials to make an informed decision on what it is they are getting.

All contractors are not the same and no two contractors are going to build the same way or with the same materials. These contractors will submit different proposals for the same job all based on their idea of how the job will be built. It is a waste of your time to get three different quotes that won’t even be comparable.

There is no uniformity in the construction business. Materials vary widely in cost and quality from one manufacturer to another. Homeowners who choose their contractor based on the results of their three bids will be asking for a low-quality job, whether they know it or not.

Many contractors play the low bid game by deliberately underbidding the job so they can make it up with change orders later. They will deliberately leave out items from their proposal to lower the price, then when you ask about it, you get “that will be extra”. Another game some contractors use is to purposely low ball the allowances for items you haven’t picked out yet, such as $2,000 for kitchen appliances. They full well know that you can’t buy a whole kitchen full of appliances for this amount and you will be on the hook for any cost over the allowance amount. You the homeowner won’t see this coming, but you will pay a much higher price by the end of the job.

As a homeowner, we suggest that you don’t get involved in the bidding process, it’s a no-win exercise because there will always be someone willing to quote a lower price in their race to the bottom.

We suggest that you interview your contractor and find one you are comfortable with:

  1. He should be knowledgeable in his field. Does he have knowledge of current building codes, does he have knowledge of best building practices and modern building materials.
  2. He should present himself and his company in a professional manor. Does he have a professionally built website? Does he have an office with a secretary? Does he have a business phone and fax line? Does he have a business card?
  3. He should be certified in his line of work, such as: Certified Master Builder, Certified Aging in Place Specialist, Certified Master Green Builder, Certified Building Envelope Specialist.
  4. He should have a Class A State License and be fully insured. A lot of contractors don’t have a Class A License because the testing is much more difficult and the state requires that the contractor have assets much higher in value than a Class B or C.
  5. He should belong to a national trade organization like the National Association of Home Builders (NAHB).
  6. He should be fully insured for Liability, Auto and Workman’s Comp, as well as all his Sub Contractors.
  7. He should have a list of top Subcontractors that he can call on to get your job completed. Since the best subcontractors only work for the best builders, many low-ball contractors must use lesser quality subcontractors, as these low-level subcontractors can’t get hired on by the top tier contractors, because they demand better quality work than these subcontractors can perform.
  8. He should be able to supply you with a professionally prepared proposal on company letter head as well as well written contract documents that spell out every aspect of the project.

When you the informed homeowner understand what’s really important, the lowest price will be at the bottom of your list.

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