Homeowners regularly use price as one of several deciding factors in making major purchasing decisions. For some, getting several bids may seem like the way to go, but this often creates hidden problems because no two companies are alike. Awarding a project for a lower price does not recognize what could turn out to be major differences in how the job is completed. The following are excerpts from an industry article.
Why Do Bids Vary?
Low Quality Products Cost Less
Some homeowners mistakenly assume that all building products are created equal. And while one nail may be indistinguishable from another, this is not the case with many other building materials such as structural materials, insulation, windows, doors, flooring, roofing or counters and cabinets. As you would expect with anything you buy, better quality, longer-lasting products cost more money. So a lower estimate may be a sign of lower quality, less durable materials being used.
Poor Planning Can Lead to Unrealistic Pricing
A low price can mean a remodeler hasn’t based the estimate on a detailed, comprehensive work plan. Cost, quality and schedule control requires solid upfront planning and conscientious project management. If a job is plagued by poor estimating, planning or execution, critical time can be lost at many stages of the project, resulting in cost overruns that are passed on to you.
Desperate Companies Resort to Fire Sale Prices
An experienced, reputable builder knows the real costs for quality materials and skilled labor, as well as the profit margins needed to stay in business. A company who chooses to ignore realistic pricing in the short term will have to cut corners somewhere and will perhaps leave you with a half-finished project.
Low Estimates and Less Skilled Labor
In every industry, workers with the highest level of skill and experience command the highest salaries. The remodeling industry is no exception.
Some Allowances Can Cost You Big Time
A common practice in remodeling is for a remodeler to provide you an estimate/contract price that is based in part on “allowances.” These are placeholders in the budget that should cover the products and parts of the project that you want for your project but have not yet selected (appliances, lighting, cabinets, etc.). Allowances are a perfectly acceptable vehicle in a contract when the contractor allows a reasonable amount of money for those items. But because a low price is attractive when selling, some remodelers use allowances for only low-cost builder-grade components. When the time comes for you to make a product selection, you will have to pay for the difference between what you agreed to and what the product you want actually costs. This can cost you thousands of dollars you had not expected to pay.
Low Estimates and Missing Security
If you receive an estimate that is low, investigate whether the remodeling company saves on expenses by not carrying proper insurance, licenses, workers compensation or does not get required building permits or inspections.
If an initial low estimate grabs your attention, stop and ask yourself why it’s low. Remember your ultimate goal will be a smoothly run project that results in a beautifully remodeled home for you – completed on time and on budget. With four decades of successful remodels and a reputation for exceptional craftsmanship, R. Craig Lord Construction is dedicated to providing homeowners with high-quality remodels. For a quality remodel, contact R. Craig Lord Construction at (856)235-4237 or online at www.rcraiglord.com.