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Apples to Apples: Comparing Contractor Bids

Make the Homebuilding Process Simpler

Apples to Apples: Comparing Contractor Bids

Building a custom home can be both a rewarding and overwhelming experience.  But this process doesn’t have to be challenging if you’re armed with the right information.  The Coastal Cottage Company is here to help!

In a previous post, we offered advice about the benefits of choosing a design-build contractor.  This post will help you compare “apples to apples” when evaluating multiple contractor bids.  Many folks base their final decision on price, but there are numerous factors that should be considered before signing a contract.  

Comparing Contractor Bids

Communicate Clearly and Consistently.  It’s not uncommon for two different contractors to look at the same project and deliver bids that are quite different. Thus, our first suggestion is to ensure you have provided the exact same information to each builder.  It’s vitally important to be clear and consistent about what you expect to ensure that each of your quotes are based upon the same scope of work.  So do your research and have a specific plan, sketches, and budget to present to each builder.  Otherwise, it will be impossible to compare “apples to apples.”

Evaluate Material Quality.  Builders quote prices using different specs, so if you receive a bid that is quite lower than another, it’s recommended that you dig deeper to determine why.  One way builders underbid each other is to use lower-quality materials.  Every bid should include a list of specific materials and the grade of those materials.  For example, will they be using sheetrock or blueboard and plaster?  Will they lay down sod or just seed and straw?  Everything from support beams and insulation to floor finishes and siding come in different grades, so make sure you know exactly which materials will be used.

Check for Licenses and Insurance. Builders can also underbid one another by using uninsured labor.  This puts the homeowner in jeopardy if anything happens on the premises.  So when comparing bids, make sure that every involved party has liability insurance and there is a workers compensation policy for every person who will be working on the project.  It’s also important to ensure you’re working with only licensed contractors.

Ask About Subcontractors.  Speaking of liability, you should also inquire about the use of subcontractors.  Who will actually be completing the work?  It’s not uncommon for the person making the bid to not be the one completing the project.  So ask about who will be the on-site labor and how frequently the builder will be present.

Assess Workmanship.  You should also scrutinize the reputation and workmanship of the contractors you are comparing.  How long have they been in business?  What do previous clients say about them?  Have they completed projects similar to yours?  Make sure you look through their portfolio of previous projects and check the references of everyone involved.

Get an Itemized List of Costs.  Finally, get a clear breakdown of all proposed charges.  Does the estimate include taxes, permits, and other fees?  Make sure you understand exactly what resources will be needed to complete your project so there will be no surprises later.

Even though price must be considered when building a home, it doesn’t have to be the determining factor in choosing a builder.  Make sure you investigate the backgrounds of the builders you are considering and gather all the necessary information about materials, insurance, subcontractors, and permits.  With all this information, you should be able to compare “apples to apples” and decide upon a builder who is right for you.

Blog by Jessica T. Smith for the Coastal Cottage Company

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