Three Myths of Competitive Bids for Remodeling Projects

3 Myths to Competitive Bids

Zig Ziglar, the motivational speaker once said, “Repetition is the mother of learning.” This is true in many settings, but it’s not likely that many of us are not going to remodel our kitchen multiple times or renovate our master bath annually. Maybe once or twice in our lifetime we might undertake a large renovation project, so it is in everyone’s best interest to “get it right” the first time. But where to start so you can get it right can be daunting.

Many people have heard the age-old wisdom of getting 3 competitive bids for a remodeling project and think that is the best place to start. After decades of remodeling projects, I wanted to share with you from my experience the myths of getting bids. There are three types of myths I would like to address:

  1. Apples to Apples Comparison
  2. Getting the “Best” price
  3. Competitive Bid or Competition Bid

Getting an Apples to Apples Comparison

You’ve likely heard the phrase “apples to apples” in the sense of comparing two things that can reasonably be compared (rather than an apple and an orange, for example). The Apples to Apples bid approach is based on the assumption that you have two people looking at your project with a complete and accurate picture of all aspects of the remodel from selections to design and that those people will give you a bid on how much it will cost for material, labor, overhead and profit to accomplish it. I will concede on the surface this does make sense if what we were looking at were truly, exactly the same.

In my experience, I have never come across a project that has been completely defined or specified to be able to produce an accurate Apples to Apples bid. Typically, when I step onto a jobsite I might be given a set of drawings and a general overview of what needs to be accomplished, like a kitchen or master bathroom remodel. Rarely do I get the documentation or a clear list of what level of products, materials or selections should be used to complete the task at hand. Without a detailed ‘apple’, you open yourself up to a wide range on the estimates and potentially no easy way to really compare the bids. Did all of the contractors assume the same quality of tile? Did they contemplate the custom light fixtures you imagined? Do they know that you want heated towel racks, a linear drain in the shower and heated floor tiles? With all of the variables in a remodeling project, the Apples to Apples comparison can quickly go out the window.

Getting the “Best” Price

We all want to get the best products and services for our dollar and a home remodeling project is no different. However, when getting multiple bids to find the best price for your remodeling project, you’ll find that the best price is rarely the best price. There are reasons why a product or service is being sold for the best price and once you understand those reasons, you’ll be equipped to truly know if you’re getting the best price.

One area to look at is the quality of products the contractor has chosen. Have they selected the cheapest brand of paint, for example, that won’t stand up to the demands of your lifestyle leaving you repainting in two years? Or maybe the windows that the contractor specified brought in a lower price bid, but once installed the window seals soon broke down and the glass is now foggy. Knowing the details of the products and selections will help you determine if you’re getting quality for the dollars you’ll be spending.

Another area to be aware of is labor costs. The labor costs on a particular bid may be less expensive than the other bidders bringing their bid price in as the “best”. However, it’s wise to understand if the remodeling team on your job has the qualifications and experience to do the quality job you’re expecting. For example, if the painters aren’t experienced with staining techniques your beautiful custom hardwood doors may end up spotty or unevenly stained, sealed and hung before anyone notices the poor quality. Then you’ll have to spend time and hassle having your contractor fix the issue which they may not be able to do if their team doesn’t have the experience.

Winning The Competitive Bid

Lastly, the very nature of term competitive bid drives to a competition where there is a winner and a loser. So, if you’re considering a competitive bid approach to your project, consider who will be the winner and who will be the loser. Rarely is one contractor a winner over the other. If, for example, one of the contractors decides to cut his operating margin or uses less expensive labor to get your project you may feel like the winner initially. But what happens if he is not in business to finish your project or the next year to fulfill the warranty on your project? And if he is in business, will he have the operating capital to service any necessary repairs should they arise? When you’re remodeling your home, you’re ultimately looking for a win/win situation, between you and contractor. Where you are getting the best value for your investment and he is getting paid for the services he is providing.

How Do I Get It Right The First Time?

After spending a little time getting clear on some myths to competitive bidding, let me make some recommendations for you to get it right the first time.

Going through the developing and planning stage of your project, with your chosen contractor, will give you a good understanding of how the actual production of your project will go! If you want to talk to us more about how we approach projects, drop us a note.

Leave a Reply