"Are You Really Comparing Apples to Apples?"

Buyers Beware: Nobody wins in a bidding war

Shopping for a known product, a new automobile?    It s eems logical to seek the best price. Most would seek referrals from a trusted friend. While it may be sound advice to shop for price on a known commodity, like a car, seeking the lowest price on spinal surgery isn't generally advisable. Nor does it make sense when hiring a remodeling contractor. Yet the public is endlessly encouraged to seek out competitive bids, supposedly to compare "apples with apples.

The usefulness of bidding is a misconception on several counts. First :   A bid reflects only an initial price, not value. There's little way to know whether a low, middle, or high bid is accurate, especially as projects increase in complexity. S econd :   C ompetitive bids may say more about a contractor's desire for a job or his/her ability to provide enticing estimates, rather than the value of a job to be delivered.   In addition, bids say nothing about the contractor's skill, character, or level of professionalism. Third :   P rofessional contractors help perspective customers balance what they can afford with what they want. But even good contractors have legitimate differences about the cost of many elements of a project. Fourth :   E ven when consumers can accurately articulate their wants, they may not know their needs. For instance, can you really just build an attached sunroom on the patio slab?

In hiring a contractor, a customer should be paying for more than a set of installed products. Contractors are employed for their specialized experience in design, building codes, construction and engineering principles, craftsmanship, safety and security issues, and business principles. They're hired to schedule and manage skilled tradesmen and to ensure their work meets certain and definable standards. Finally, all consumers want a contractor who can be trusted to protect their property and what they value in it.

For our customers, we suggest an alternative to the bidding process. Start by getting contractor referrals, particularly from reliable sources, who have had similar work done. Ask if the job progressed as promised? Did they get the finished product and services they contracted for? Did they receive full-value? Would that contractor be the first on their list for future projects

Next, interview candidates for whom you have a good initial feeling. Get professional references and check them. Review portfolios. Review the appropriate documents: contracts, sample proposals, change orders, etc. If possible, visit finished work and work in progress sites. Conduct a second interview with the best prospect. Explain the job. Evaluate whether the contractor understands the objectives and is enthused not just about getting the job, but also about building it! Declare that there is a budget. Know what you are prepared to spend, can afford to spend, or what you are willing to borrow to accomplish your vision. Be prepared to share that information.

Next, ask your first-choice contractor to prepare specifications, a budget, and a construction management plan. Be willing to pay a reasonable fee for these time-consuming, professional services. I was brought-in on a job recently by an architect/designer. In visiting with the potential customer, at a phase of our discussion the customer became noticeably annoyed that I would charge for these services.."there are a hundred other companies that offer free estimates".. I suggested that the services being provided by the architect were being compensated, which the potential customer appropriately acknowledged they were.   B eing a professional contractor, we also bill for these professional services. Besides, "those other guys" did not get the referral from someone you trust; the architect/designer. I welcomed the opportunity to work on their project and we continued with our discussion and signed a design/build agreement at the end of the sales call.

Finally, review and revise all the elements with the contractor and negotiate the price if possible and practical. Be honest in sharing any other additional work you have been considering. Most often you will get a better price before the job starts since the contractor can plan for this work in advance. If you wait, the contractor must adjust the schedule, work force, deliveries, and other factors, which can cost more.

Consumers do not need to be overly anxious about remodeling when you choose a contractor based on value, not the lowest bid. The 19 th century economist John Ruskin wrote: "When you pay too much, you loose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the job it was bought to do."

This information was adapted from an article by Jim Sasko, owner of  Teakwood Builders, Saratoga Springs, N.Y. as it appeared in Remodeling Magazine, September, 2003.