Is Getting 3 Quotes Really the Best Practice?

So, you’ve been thinking about making some changes to your home or office, and you’d like to get an idea of what it might cost. You’ve been advised that the best way to get a good job at a fair price is to get at least three quotes. The first thing you do is call a bunch of contractors and ask for some quotes. Or maybe Joe down the street has had some work done and recommends the company he used, and you call them as well. Is this a good idea?....Well... that depends on some additional factors.The most important among them is... do you have a plan and specifications? Let me reiterate: Do you have a plan and specifications?

Unfortunately most individuals looking to have some work done don’t have either of these. What they don’t realize is that their about to choose a contractor based on price, as though they we’re holding three identical Grade A Macintosh apples in their hand. The reality is that without plans or specifications, it is akin to buying an apple over the phone, giving your credit card to complete the purchase and arriving at the store to find the apple is about half the size you’d imagined. Yes it’s an apple, but if you’d been able to see it prior to making the trip down to the market and having paid for it, you might not have made the purchase. Since you’re already at the market and have already paid for the bad apple, you decide it’s best to go ahead and pay to upgrade so you can have the apple you really wanted.

Now back to the 3 quotes....You discuss your ideas/desires with these 3 different people, who in turn must put together pricing based on a conversation and some notes and measurements taken....Remember the game of telephone you played in the 3rd grade....The likelihood of these three people coming away with the same idea of what you would like to do is highly unlikely. But let’s presume they did come away with a complete understanding of what you want. Now they each need to get pricing together on the various aspects of the project. Through the course of developing the “Takeoff” (what the compilation of quantities is known as), the quantities of each item needed should run pretty close from estimator to estimator, the major difference will be in the fittings and finishes. If I’m a conscientious contractor, I attempt to base my finishes on a level of finish that was indicated at the first and/or subsequent meetings. If I’m a sloppy or merely a lowball contractor, I know the game is for the lowest price, so I base my finishes on the lowest I’m able to find, knowing when we get to that point in the project, you’ll have to make a choice, either accept the less expensive item as budgeted or accept whatever the cost of the desired item you really want. So here’s the rub; the low bidder gets rewarded for doing business that way by getting the job, and ultimately giving you less value in the process.

Let’s look at this from another angle...You’ve received three bids for your bathroom project, and selected the lowest bid. When it comes time to select your tile your told which tile you have to pick from. You don’t like any in the offered selection. Now what? You make another selection which makes a change to the original contract and generates a Change Order that likely will increase the contract price. Or let’s say you wanted granite counters (this is where the specifications come in) the contractor knows of a granite that he can get installed for $40.00 per SqFt, and that’s what he used in his lowball proposal. When you see the granite that qualifies for this pricing you can’t possibly live with that, so now you’re looking at something twice the price....Can you see how this getting three quotes really has little bearing on the eventual outcome (cost) of the project.

Another part of this equation is weather the contractors providing quotes all maintain appropriate insurance. If you’re willing to take the responsibility for what someone working in your house may have occur either to them or by them to your house, a worker or other building, then by all means, take the low bid. I maintain that the best way to choose a contractor is to find one that is reputable, with integrity and someone you feel you can work with. Bottom line is the numbers you’re comparing to arrive at a decision as to who you should contract with are relatively meaningless. You should know that the average of the three quotes is likely to be what you’ll actually end up paying....and likely to the wrong company (the lowest bidder).

1. Develop a plan. Even if it’s just a bunch of photos of what you would like to have happen, it will help the meetings to be productive and informative.
2. Get a list of allowances for the project. (this will allow you to compare how much latitude you’ll have in the finish choices)
3. Check insurance and get a certificate of insurance from their insurance carrier.
4. Ask for references.
5. Use your gut. If the meetings feel awkward, the entire project will likely be awkward and difficult. You’re going to be dealing with this person and the sort of people he/she would be likely to hire for what may be an extended period of time, so choose someone you feel comfortable with.
6. Remember, this is a process. Don’t be in a hurry, get it the way you want it the first time…. Good Luck!