Homeowners and the Bidding Process

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Once you have your plans, you’ve picked your lot and you’re all good with the bank, it’s time to start getting bids from contractors. This article will outline the steps of that process.

There are two approaches to collecting bids: 

1. You can get quotes from literally every type of subcontractor out there, including the concrete contractor for the foundation, the framer, the finish carpenter, electrician, painter, HVAC, etc, etc. 
2. You can get quotes from a general contractor who will take care of everything. 

Hopefully, our last post, The Tragedy of Johnny Builder, opened your eyes to the pitfalls of being your own general contractor. For the sake of this article, I’m going to assume you’ll choose to go the general contractor route (AKA the correct route). If you’re fully informed and still feel confident you can tackle the project on your own, then you’ll apply the steps laid out on getting bids from a general contractor to each of the subcontractors you’ll need. All four thousand of them. 

Seriously, hire a general contractor. 

The Search 

To start, make yourself a cup of coffee. Take the extra time to make it especially delicious. Find your favorite mug, get the special creamer, whatever you need to make this the pinnacle of coffee-making. Now carry it to your computer, sit yourself down and open a web browser to Google. 

Type in “general contractors near me” and hit enter. Make sure you spell it all correctly, because if you don’t, Google will ask if you meant something else and there’s no small amount of shame in that. 

My results gave me a whole slew of contractors, some general, some specialized, with a nice map showing where they were in relation to me. Some had ratings, some didn’t. Scrolling down, there were links to the Better Business Bureau, if that’s something you’re interested in using. I went with Google’s list, and picked a handful that had good ratings. You can click on the ratings to read exactly what each person has written. I’ve found that only the very happy or the very upset bother to leave reviews, so they should give a good range of opinions. Obviously, you should ignore those with a large amount of low ratings. 

Another route you can go, or one you can use in addition to doing your own search is to call up the professional who designed your house plans. They likely know general contractors they’d be more than happy to recommend, and those recommendations will come from an experienced source. 

Making the Calls

Before you start calling everyone on your list, be sure you have a spare copy of blueprints for each person. Some will only need a page or two, some will need a full set of blueprints. They’ll need to know exactly what’s going into the project. If you just give them rough numbers or general concepts, the estimate will be rough and could vary greatly from the final balance. 

Things to ask for:

• Are they registered  and insured? This is important. You don’t want just any wacko with a clipboard overseeing the building of your home. 
• Can they supply referrals or a list of past customers? Give those people a call, ask if there were hidden costs, if the general contractor was easy to communicate with and responded quickly, if the project was completed on schedule, etc. If they can’t or are unwilling to produce referrals, probably best to look elsewhere. 
• A detailed scope of the work, with a timeline. 
• The estimate, obviously. Make sure this is signed and dated. 

Remember, you’re the important party here, not the other way around. If the general contractor seems unwilling to answer these questions, or makes you feel like you’re wasting their time, go somewhere else. These are all standard questions and most, if not all, general contractors will have ready answers to all of them. 

The Decision

Give yourself a week or two for these to all come in, to make those calls on referrals and to look over the actual estimates. 

Conventional wisdom says to throw out the lowest and highest bids, but don’t be in a rush to discredit any of them, especially the higher bids. In a Consumer Reports survey of over 400 general contractors, only 4% said they were unwilling to negotiate their price, with a solid 80% somewhere between somewhat and very willing to negotiate. If that high bid comes from a company that really knows what they’re doing and it isn’t astronomically out of your budget, see if there’s some wiggle room. 

Let your prior conversations with these general contractors help sway your opinion, but only just a bit. If you started your relationship with them in a negative tone, chances are, that’ll color the rest of your time together and you’ll see every blip or wrinkle as larger than it is. But on the flip side, just because you had a great first talk with them and bonded over your mutual love of ballroom dancing, that doesn’t mean you can let a weak estimate slide. 

Make your initial eliminations and then another round of calls. Ask any final questions like what happens if problems arise, what happens with extra costs, do they have other projects going that might affect the timeline of your house, etc. Hold no information back. If you absolutely need your home by a certain date, this would be the time to tell them. 

The Signing

When you do make your decision, make sure the contract is clear. It should include a detailed estimate, the materials being used, a timeline, the payment schedule, drawings and the like. DO NOT pay the total cost of the project in advance, and if the general contractor is insisting on that, I’d proceed with extreme caution, maybe to the point of looking elsewhere. 

Once you feel like all questions have been answered and all those letters like Is, Ts and lower case js have been dotted, crossed or otherwise, sign that contract and celebrate the start of your new home. 

There are, however, bound to be changes as the building moves along. That’s just the nature of projects this large. Make sure all changes are submitted in writing so you have a detailed trail of information to refer back to, should the need arise. Regularly contact the general contractor to stay up-to-date. 

And, above all, allow yourself to be excited. You’re one giant step closer to living in your very own, custom designed home.