When Tom and Sarah decided the 30-year-old home they bought five years ago was starting to show its age, they started thinking about hiring a contractor to get the job done.
After contacting several general contractors, they were faced with the next choice: which one to hire? The bids were all over the map and pricing was confusing.
Tom reached back to his military experience and averaged the bids. They then hired the contractor whose price came closest to the average.
Tom was satisfied, yet Sarah was still skeptical. Did they select the best contractor for the price? Could they have done better? She pondered and did some basic research and here is what she learned.
Get More Than One Estimate
When it comes to hiring a contractor for a home project, most experts recommend getting at least three estimates. The goal is to find a contractor who can complete your project properly at a fair price.
How Many Quotes Should I Get?
We recommend sourcing at least three quotes so you can gauge what’s happening in the market and compare costs. The golden rule is to be as clear as possible. The more specific you are about your plans and requirements, the more accurate the quotes are likely to be.
How to Tell a Contractor They Weren’t Chosen
Nobody wants to hear the “it’s not you, it’s me” excuse. So how can you tell contractors that you have chosen someone else? Don’t think too much about it. This isn’t their first rejection (or rodeo). There doesn’t need to be any hurt feelings if you are honest, direct, and kind.
Why do Contractor Quotes Vary so Much?
There are differences in quality and material costs, but the most important difference is the amount of profit the contractor wants to make from the job. Some people prefer to submit 25 bids and then be rejected 24 times. Then they can make a lot of the one that wins. Others want all bids accepted. They will then choose the most straightforward and ignore the rest.
They will accept all orders and not give you a start date. Or keep moving the work until you cancel. They will always have work to do, so they are always behind. Good for the contractor, bad for the customer.
Experts suggest hiring contractors who are the most competent and reliable. They are usually less expensive and provide the best customer service. Low-ball bids are not good deals for anyone.
As long as communication between customer and contractor is reliable and good, any reasonable price is acceptable. If it is not, there will be no acceptable price. This project will be difficult. The contractor must respond quickly with clear, precise, and firm answers. Otherwise, don’t allow them to do the work. If they aren’t performing in this manner after you hire them, fire them.
Don’t be cruel. Some of them will hose you. They deserve it.
Tom’s strategy may have been successful in this case, but it is not always the best approach. There are a few considerations to consider when averaging prices like this.
First, what if one of the contractors had significantly higher or lower bids than the rest? This could skew the average and lead to selecting a contractor who wasn’t actually the best value.
Second, what happens if something goes wrong after work begins? If there is a problem and one of the cheaper contractors needs to be called back out, that contractor may not be available or may charge more because they are no longer working at their original discounted price.
Finally, by choosing based on price alone, you might miss out on some important factors.