An Example Showing A Statement Is Not True In Math How Homeowners Can Accurately Compare Bids on Custom Home Construction and Remodeling

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How Homeowners Can Accurately Compare Bids on Custom Home Construction and Remodeling

Homeowners are used to hearing “get at least 3 bids” before proceeding with a construction project. This is good advice, as well as getting referrals from friends and family. However, offers are only useful if they come from comparable companies and are structured in such a way that they can be accurately compared. Many homeowners, and even some architects, don’t do a good job detailing the project.

The most important requirement is a complete set of plans and specifications. If the entire project is not clearly explained, each bidder will make different assumptions (about fixtures, appliances, finishes, etc.) leading to wildly divergent bids. And since each bidder’s assumptions will likely differ from the buyer’s, the stage is set for conflict during the project. The way to make bidding more productive for everyone is to remove the guesswork and give each bidder a legitimate chance to succeed.

1) Buyers should interview three to five builders to see who they would like to work with. If a buyer is working with an architect, the architect likely has a list of builders that seem right for the project. Buyers may also want to call past customers of each builder for references.

2) Buyers should invite two or three builders to submit quotes. Note that bidders may want to know who they are bidding against. For example, an established professional company may choose not to compete against a small, less professional team with a low reputation.

3) Provide as detailed plans and specifications to each builder as possible; in addition to being necessary for accurate bidding, it also allows builders to look for discrepancies, incomplete items, and other issues. Blueprints are rarely perfect, so a good architect should welcome such feedback and be willing to make necessary revisions. This will lead to a more accurate budget for the project.

4) Buyers and the architect should also work to remove as much guesswork as possible. Allowances are a good example: if buyers have researched kitchen cabinets and decided their level of quality will cost $40,000, they should tell bidders to use that number.

5) Your new construction or remodeling project is a big investment, make sure surface protection is specified so your interior finish stays like new throughout construction.

6) Set a due date acceptable to all parties: Three to four weeks is common for a custom home project.

The offer must include the budget and an estimated completion date. It should also include each builder’s policies and costs, including administrative fees, for making changes once the project is underway. Before making a final decision, the buyer and architect should meet with each builder to review the bid, ask clarifying questions and confirm the numbers. After all, it wouldn’t do anyone any good to turn down a qualified candidate, or end up in trouble later, because there was a math error in the offer.

Custom home builders say at least 20 percent of the plans they see are overdesigned for the client’s budget. This is another reason to work with a reputable builder who can be involved in the design of the home from the beginning, even though they may not have the lowest bid.

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