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How to Evaluate Remodeling Contractor Bids

The Right Remodeler is the Key to Customer Satisfaction

© 2011 by all rights reserved; content may not be copied, rewritten, or republished without author’s written permission.

Finishing Wet Concrete

Finishing wet concrete

This article was updated on 02/19/21.

Whether you are embarking on a remodeling project or planning new home construction, picking reputable contractors is critical. You must take into consideration the contractor’s reputation, bonding, workman’s comp insurance, and liability insurance.

There are many ways to locate the best contractor or handyman for your particular project, depending upon the scope of the work to be performed. But beware of a low bid or a handyman that wants all the money up front. Many handymen will ask for funds for money for the materials up front, which is fine if they come well-recommended. Handymen operate on tighter budgets than contractors.

Just be sure he is bonded and insured and you go to the home improvement store with him and cut your check right there. Do not hand over any cash standing in the doorway of your home, unless of course you already have a business relationship and trust has been instilled.

The First Step is Settling on Your Remodeling Budget

Too often homeowners either start contractor shopping before they set a remodeling

  • budget thinking that the bid will steer them to make a decision. Or, they just don’t realize how much a home upgrade can cost depending on the scope of the work and/or the quality and quantity of the materials.

    This is a huge mistake. Setting a budget should be the first step in the process. Also, allow for cost overruns. New construction can be straightforward but remodels are a different animal altogether. Even the most honest contractor can’t tell you what he will find when he opens up walls.

    Chances are that something or other, generally electrical or plumbing, will be affected by newer building codes. These are changed frequently and sometimes seem to be done on a whim.

    Looking for Builders in the Phone Book?

    This is probably the most disastrous plan in your array of selection options. I like to refer to it as “Yellow Pages Roulette”. Baaad idea. Certainly all the good ones will be listed, but so are all the scam artists.

    If for some reason you must choose this method of finding a contractor, focus like a laser beam on the businesses who bought full or half-page advertisements and be sure the little BBB seal of approval is present.

    Basing Your Bid Search on Referrals

    This is a better way to get started. Usually, you can rely on the level of satisfaction of your neighbors, friends, relatives, and co-workers. I always recommend a service like Angie’s List that aggregates consumer satisfaction reports in your area.

    What’s the upshot? You get unbiased ratings of your neighbors. You will usually pay a small price for the service, but it’s nothing compared to the money down the tube and discomfort you will experience for poor craftsmanship, not meeting deadlines, etc.

    Also, there are many sites today that hook you up with free bids online. This is how it works — companies register with the service, are evaluated, and get accepted or rejected. Those accepted and get into the database either pay a yearly fee or pay a commission on bids that they win.

    Either way, in many cases you as the homeowner do not pay for the service. You might have noticed that car dealerships have adopted the same game plan. A few years ago I was shopping around for a Toyota truck. I just entered my specifications and within minutes I had several contacts.

    How to Evaluate Contractor-Submitted Bids

    A good rule of thumb is getting bids from a minimum of three contractors for any task. In another article I hash out the process of how to pick a roofing contractor. No matter what job you are farming out, the process is the same. I also have an article of remodeling contracts to protect you. The link to that one is listed below this article.

    Generally speaking, beware of both ends of the spectrum — the lowest and the highest bid. The low one will be poor quality and the high one might be just taking you to the cleaners. In addition, note how the contractor evaluates your project.

    I once secured an exterior home painting contract simply because I took my time measuring the size of the project and asking more detailed questions than the previous contractor.

    I was just making sure I didn’t miss anything but the homeowner told me it inspired confidence in my professionalism and attention to detail.

    Before you pick a contractor, ensure that you completely understand the concepts of general contractors and mechanic’s liens (which can really get you in financial trouble). The larger the scope of your project is, the more critical all these concepts become. You must protect yourself and your investment financially.

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    About the Author:

    Photo of Kelly R. SmithKelly R. Smith was a commercial carpenter for 20 years before returning to night school at the University of Houston where he earned a Bachelor’s Degree in Computer Science. After working at NASA for a few years, he went on to develop software for the transportation and financial and energy trading industries. He has been writing, in one capacity or another, since he could hold a pencil. As a freelance writer now, he specializes in producing articles and blog content for a variety of clients. His personal blog is at I Can Fix Up My Home Blog where he muses on many different topics.

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