Getting the Best Value Isn't Always Found By Bidding Your Project Out

Identifying the best pro for your project starts by clarifying what value means for you and your home.

Should you heed the conventional advice about getting price bids from three remodelers? Maybe.  But once you understand more about the estimating and design process, you might agree there may be a more effective approach.

The concern with the three-bid method for choosing a remodeler starts with the fact that each project is unique. Even a "simple" kitchen or bath remodel will include hundreds of parts and dozens of product options, as well as anywhere from 10 - 20 subcontractors and vendors to be selected by the remodeler as the right fit for that unique project. That, along with the fact that existing conditions vary from house to house, makes it virtually impossible to ensure all bids are based on the same assumptions.

The design process is the second complication.  We typically see the three-bid process initiated at a low level of design--this is smart, because you want to know early if you are starting in on a design you will have no way to afford--but given the first concern, you can probably agree that those three bids, working off very little detail, have even less chance of offering a meaningful price comparison. 

Speaking of price comparison, that leads us to what I consider the biggest problem with the three-bid model:  Regardless of how hard you want to keep in mind that it isn't just about price, at the end of the three-bid exercise, the most salient information you will be left with are 3 sums, which reflect 3 different interpretations of initial design ideas, completed by 3 different estimators, employing their unique estimating methods and assumptions.  How much worst-case scenario does each assume?  How much best-case?  Estimating isn't a simple process, or an innate skill, and there are probably as many approaches as there are remodelers.  So, you have 3 prices in front of you with unknown levels of similarity, and they will inevitably be ranked high, middle, and low.  How will you decide? 

It will come down to what seems like the best value for your home.  Certainly the interview will play into the decision--your impression of the remodeler and what they have shown you about their personnel, building process, and business systems offer strong indications of what you can expect if you choose their services.  In our experience over the last decade at Blue Sound Construction, we have found that the prices for high quality labor, materials, and subcontractors fall into fairly predictable ranges--not to mention fairly predictable results when lower quality versions are introduced--which is to say, the actual cost of a project, completed at the same level of quality, is going to be very similar.  This is the "you get what you pay for" reality that we all have to deal with.  We all want a better deal when we can find it, of course, and there are moments when that makes sense; but is the quality and integrity of your home the place to take the risk?  We don't think so.

We believe the best approach is to interview three remodelers, focusing on a good fit and value for you, and not on price.  The interview process should be rigorous, and it would be appropriate to ask what similar types of projects have cost, and to see a sample of the remodeler's estimate format, so you can know what to expect.  You should meet key employees that you will be interacting with: who will be in charge of day to day operations onsite?  Who will guide you through change orders and surprises?  Can you work with that person?  Everything about the process is fair game, and most professional remodelers will be excited to show you what to expect. After all, you are committing to a business relationship that, depending on the project, will last anywhere from several months to more than a year. Workers may be in and around your living space on a regular basis. That means the remodeler's staff need to be people you like and trust--people you can easily collaborate with. Follow your gut. Part of a good match is personal compatibility, and part is how they manage the build process.

If you have an architect selected and are at the beginning of your design process, then it's best to choose the remodeler before you get too far into it. With both professionals involved from the beginning, the remodeler can create budget estimates as the plans get drawn. This ensures you get a design you like and can afford.

Start by walking through the existing house with both of them, and then ask for a Professional Services Agreement, so you can have a low-commitment contract in place to receive preliminary design concepts and initial pricing. If you don't like or can't afford their first drafts, ask them to do some value engineering to steer it back into the desired budget range. Once you're satisfied with the general approach and price range, they can work together to create detailed plans and specs. You will end up with a negotiated price that meets your needs, and you are likely to be happier than if you had gone with the three bid approach.