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The 3 Bid Myth

*by Mike Fournier, CPB, CAPS

For customers, hiring the correct builder or remodeler is one of the most important decisions they will make during the entire renovation process of their home or office.

They will be living around a contractor’s crew for several weeks (or months), and the finished quality of the contractor’s work for many years, so it’s essential for them to hire a builder or remodeler who is a good match.The customer should hire someone who understands the needs of a family, provides the level of service to match the level of price, and one who will take the time to help make the right decisions.

Some customers have a hard time with the process of hiring a builder or remodeler; and many customers mistakenly believe that they need to get three or more competitive bids in order to get an affordable deal.But, they think little to nothing of opening up their home to a builder or remodeler whom was lucky enough to have the lowest price.

Most assuredly, the three-bid rule of construction is a myth.  Hiring solely on price, and/or spending less and getting an end result product that you are less than thrilled with is no bargain, particularly if it is stressful, random, and most often: out of control.  Ben Franklin said this famous quote in 1730, (and it is still true almost 300 years later!)  He said: “the bitterness of poor quality remains long after the sweetness of low price is forgotten."

When Does Three Bids Work?  Getting three bids works well when you are buying a tangible product, like a car or a piece of furniture.  You can see what it looks like, feels like, what options are included, and how it might perform.

It's much easier to compare furniture or cars from dealers on a particular make and model than it is to compare several bids from different building or remodeling contractors.  With the piece of furniture or car, you’re effectively comparing the same product—but building or remodeling is different for these five legitimate reasons:

Variation in the project.  You can’t see what you’ll be getting up front.  With a building project, you're purchasing a "design concept", not the finished product, especially if you are not willing to hire a local architect to provide you with blue prints, and an exact scope of work.  

And, if you ask the builder or remodeler for bids without a scope of work, they may base their bids on design solutions of different complexity, including different features, levels of finishes, and levels of detail.  Due to and incomplete or vague scope of work, unbeknownst to you, one company may bid the Ford Fusion level project and another will bid the BMW level project.Or, one may bid a Henredon, and the other an Ashley.  Typically, all you get is an overall price, and maybe a big surprise later when you discover what the quote did or did not include.

Unforeseeable variation in the execution.  Contractors vary in the detail of project planning, the quality of work, and the ability to stay on schedule, and various other intangible factors that can't be viewed on a quote.  If you find someone that you trust to complete the project in a timely fashion, and to the quality level that meets your expectations, then you should hire them; even if they are the only one that bid on the job.

Variations in your involvement level.Contractors run the gamut on this one.  Are you looking for a turn-key approach, where someone else worries over all the details, or do you want to be the general contractor and be involved in every detail and solving every minor issue that comes up?  Will the contractor take any problems that come up by the horns, or will you need to run home from work or cancel your tennis game to figure out details that should have been figured out up front had you hired the right contractor?

The nature of the building or remodeling journey.  This can be totally different depending on who you choose.  Will it be joyful?  How will your home and your sanity be protected?  Are the trades-people polite, respectful and caring?  Will you be kept informed about any schedule changes?  Will everything be done as expeditiously as possible to get your life back to normal? Or will you come home to loud music, cigarette butts, beer cans, and pee all over your bathroom floor, and a project that seems to take forever to complete?

The opportunity to be taken advantage of by dishonest contractors.  Unfortunately, if you don’t dig deep enough with due diligence and weed out these types of contractors, they may take advantage of your lack of experience and provide price estimates based on shoddy materials, vague guidelines, doing work without permits or insurance, and/or overall poor work quality. 

Please note: if you are hiring based on low price alone with no due diligence, you can be guaranteed that part (or all) of that previous sentence will hold true for you.

Price-based selection is NOT the best way to hire a builder or remodeler.  Base your selection on overall value rather than just on dollars alone and look for the contractor that is the best match for you, your job, and type of work.  It’s a brighter path, and a much better way.


*Mike Fournier of Tulsa, OK is a local and National award winning contractor.The NAHB named him Remodeler of the month in May of ’17; and he was published in Qualified Remodeler magazine.Additionally, Mike has won the HBA 2016 Spike Award, and the HBA 2017 Spirit Award, as well as being named Best of Broken Arrow in 2012.  Mike has owned Sonrise since 2000, and has served over 11,000 customers as a custom builder, remodeler, and swimming pool contractor.