The other piece of advice given most often to consumers is: “Get several bids to compare prices.” It is important to understand the pitfalls of only considering price. In order for you to accurately compare price, all bids must be for the same project, products, specifications and quality of work. This is almost impossible to realize. If you took one small, easily definable part of the project and asked a couple of contractors how much they would charge for that element of the project, most contractors would try very hard to give you what you want at the price you want to pay. They may even find cheap products and inexpensive trade partners to help you meet your budget. Remember that the bid is only the starting point in your negotiations with the contractor.
Keep in mind that the lowest bid may not necessarily be the best bid, and that an unusually low bid may be cause for alarm. Perhaps the contractor did not fully understand the project’s scope. He may be inexperienced and underestimated the amount of labor and materials required or may be planning to cut corners by using inferior materials, low-paid, inexperienced workers, or by not following local building codes. Contractors may play a little game, giving you a bid for something that is slightly different from their competitor’s so that you can’t compare evenly. A good contractor will listen to you and be respectful of your budget. He won’t try to sell you things you don’t ask for or that are different than what you want.
Unacceptable: The contractor gives you a dollar amount on the back of a business card, or hand-writes a one-page proposal that is short on details. The contractor presents a very low bid (to get the job) and then adds in extras which weren’t included in the original bid or are upgrades from the allowances.
Good: The contractor prepares a complete proposal that refers to plans and gives you a “Notice of Cancellation” and a Lien Notice.
Better: The contractor has a presentation that breaks down different areas, allowances are clearly spelled out, options are clearly outlined, plans accompany the proposal and the proposal names specific brands and models.
Best: In addition to the above, the contractor has a system for design and estimating and presents all costs associated with this process. He helps establish a budget with which you are comfortable, shares design ideas with you, provides a line-item estimate, and helps you understand how your decisions affect the cost.