The Problem with 3 Bid Rule

That three-bid rule advice could be costing you big.

Roxanna Moore

Closeup of a contractors clipboard estimate form Houston 3 Bid Rule Problem

The 3 Bid Rule Problem

Online articles, remodeling tv shows and other influences advise homeowners to solicit bids from several qualified contractors. After all, you want to make sure you get this RIGHT, avoiding costly increases and botched jobs, right? Avoid the 3 Bid Rule Problem with this advice.

Three major needs often get in the way of those bids being realistic:

1. Need for detailed plans and job specifications,

2. Need for comparable bidders, not the number of bidders,

3. Need to structure the bids for easy comparisons.

These, if not addressed, lead to the 3 Bid Rule Problem.

Most importantly, the need for detailed plans and specifications.

For a bid to have meaning, it should include all details about the project, right down to the final touches. Detailed plans and designs take time, measurements and effort and are most often unclear with many contractors. This lack of preparation on behalf of a contractor can yield widely divergent bids. In a world where consumers most often choose the lowest bid, having a cheaper price doesn’t always mean you’ll get the same results.

For the bids to be comparable, the companies themselves must be comparable.

Homeowners may find it necessary to interview four or five companies just to find two to compare. The emphasis is on comparable: each bidder should have a stellar reputation in the nature of your project, with their reviews and with experience. A brand-new company who specializes in bathrooms would not be comparable to a company with 30 Years in business. Nor would a home improvement store who offers remodeling be comparable to one who specializes in Design Build Remodeling.

 3 Bid Rule Problem Houston Contractor

For the bids to be comparable, the companies themselves must be comparable.

Budgets also have been found to confuse the bidding process.

A budget is an assigned dollar amount for items that are not yet selected by the homeowner or builder. While in the bidding and contract aspect of the project, budgets should be clearly defined. When a budget is not clearly defined, a dollar figure is substituted instead. This lack of preparation from the homeowner can cause the project’s schedule and budget to be compromised. It is also helpful to note that the addition of too many budget allowances can cause confusion as well.

Regarding budget, always make sure that you have yours clearly defined and notated. For example, if you have decided to spend $30,000 on kitchen cabinets, that dollar amount needs to be on every bid. If your budget is $50,000 for your kitchen remodel, that too, needs to be included on every bid.

Lastly is the structure of the bid.

Each bidder should use the same bid sheet to allow the homeowner to compare them easily. Although some companies offer bid comparison sheets, it is rare for contractors to offer these, making a real comparison very difficult and complex. A reputable contractor wants you to know their process, their competency and will be more than happy to provide a bid sheet that will make the comparison much easier for the homeowner. The 3 Bid Rule Problem: Homeowners meet many times with many contractors, confusing the process. Comparisons shouldn’t be so difficult and should only be done with comparable companies.

Your bid should also include a bottom line price, estimated time frame for job completion and any information that explains changes, should that need arise. Choosing a company with a fair bid practice that doesn’t have price jumps is wise. These detailed bids take time to develop, so a good rule of thumb is to allow up to 3-4 for an itemized bid. Beware of the companies with the too good to be true bid, they are often fly by night companies and may potentially give you a bad experience.

 3 Bid Rule Problem Houston Contractor

The builders who are bidding should also have expectations.

Creating a bid for can take 40 to 70 staff hours, plus additional hours contractors and suppliers. Because of this, most bidders will want to know who they are bidding against: established pros will not want to bother bidding against outfits with reputations for low balling bids and then charging for extras later. Also, they may insist on not meeting with other contractors and having all deciding parties present. These requests are not unheard of and give both the homeowners and the bidding company the opportunity to discuss the project clearly, allowing for a fair and accurate quote.

Sometimes the bids are a bit too high for the homeowner—around 20 percent of the plans made are over-designed for the customer’s budget.

That risk in the addition of the others that stand in the way of an accurate bid, is good reason to abandon the 3 Bid Rule altogether. Find a reputable professional builder you can trust who can be involved in the home’s design from the beginning. Companies who specialize in Design Build will be more likely to offer you a professional and quality remodel than a handyman or home improvement retailer and will have a stellar reputation with projects such as yours. Be sure to ask for examples of their work, reviews, testimonials and their process. Any reputable builder will be more than happy to provide details of their competency.

Related:

Unique Promises a Stellar Houston Remodeling Process
Need a custom kitchen designer in Houston?

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Get a FREE Expert Evaluation Today!








Professional Houston Home Remodeling & Renovations

Renovating the Houston, Texas Area for Over 30 Years

Unique Builders & Development - Association Logos