Multiple Bids = Greater Confidence
Most home improvement jobs do not have a set price, and that can make homeowners a little anxious about the amount we negotiate or agree to pay. How do we know if it is fair and reasonable?
The most important step to ensure you will pay a fair price is to get multiple estimates. The larger the job, the more bids you should obtain before settling on a contractor and a price. If you are building an addition or dormer, you may want to get three or four, and there may be a difference of tens of thousands of dollars between the high and low bids.
Why do bids differ so greatly? Experience levels vary greatly among contractors and the more experienced can demand a higher price. A busy contractor with jobs booked out for several weeks or months may not be dependent upon your job, while a contractor who is not fully booked will often bid more aggressively, especially if he or she has a payroll to meet.
Some contractors, particularly those who have worked as employees for others in the past, know exactly what they want to make each day. The price you are quoted will reflect that. I know a jack-of-all-trades who is a licensed electrician. His work is perfect, but I don’t contact him for handyman projects because he is always the highest bidder for those jobs to ensure his daily rate. Smart contractors can quickly and accurately calculate what their costs will be for a job, including the expense of subcontractors and travel, and know their acceptable profit margin or their proceeds as a percentage of the total price of the job. These contractors will price their bids accordingly. And not everyone prices in a rational way. Just as we might be inclined to work with a surly contractor only if his price is low, some contractors may be willing to work with a picky client only if the price is high. Free enterprise allows for both parties to apply such criteria.
Lastly, if the bid involves materials, the actual list of materials can vary greatly, especially the quality of materials used. A deep crown molding will cost more than standard cove molding. Do the discussing and debating up front, be clear and direct about what you want, and discuss any design questions with the contractors before they bid. Once plans are made and materials are ordered, changes usually cost money.
Tom Mirabella is President of LIHome411.com, a directory of prescreened home improvement contractors on Long Island that specializes in helping homeowners find the right contractors for any job.