Reality check: Beware of the lowest bid…
For many people, the home is the biggest investment. When building one’s dream home or remodeling an existing house, one can easily get caught in the snare of the numbers game with multiple bids. Misleading contractors have been known to say or do whatever it takes to get the job, encumbering the homeowner with devastating financial consequences. To discuss this topic and offer guidance, I have invited a highly respected Dallas contractor with a strong moral compass and decades of experience to decode the bidding wars in this special guest post. Bob Hoebeke is all about communication with his clients; his honesty and transparency have built a solid base of repeat clients with stunning homes. Please welcome Bob:
Do you hear that angry, snarling, gnashing of teeth behind you in the Starbuck’s line while you’re ordering your “quad Venti, no whip, cinnamon dulce latte?” It could very well be the sound of an angry homeowner who has invested inordinate amounts of time, energy and money in building or remodeling their home only to have their dreams shattered through financial mismanagement, deceit, gross incompetence, cover-up or just plain stupidity on the part of their builder. Unfortunately, even for the wealthiest of homeowners, there are no do-overs.
More often than not the scenario described above happens because of the “Builder’s Beauty Contest.” Well-intentioned architects, seeking the best pricing for your home, submit plans to multiple builders. The age-old myth embraced by many is, more bidders means more competition, and more competition means a lower project price. But the reality is substantially different.
With stiff competition and the desire to secure the work, each builder will competitively price what they see as the parts and pieces of the project and begin to shape a budget story they believe the architect and owner will want to hear. But there are thousands of pieces to a building or remodeling project. As the builder bids, some pieces will be missed, others will be substituted, many will be camouflaged in other cost centers (site work, landscaping, interior furnishings and after market finishes etc.), and still others will be allowanced with expense caps so low they become meaningless (you can’t buy much of a potty for $50). Builders have to win so many will lie, cheat and even steal for a signed contract. Herein lies the problem.
Since final results of a competitive bid bear little resemblance to what actual costs will be when the project is completed, more often than not the awarding of the contract goes to who can tell the best story. Usually the prettiest story wins – it’s The Builder’s Beauty Contest!
Several ways to help you avoid The Builder’s Beauty Contest:
- Interviewing multiple builders and hiring integrity and chemistry:
- On a material to material, and labor to labor basis, there won’t be much difference between builders if they are bidding like quantity, so hire who you like and work together on price.
- Evaluate a builder’s project administration plan and review cost control mechanisms as well as the builder’s communication skills.
- Ask for, and check references:
- Who were the builder’s last five clients and what are they saying about your candidate?
- How long has the builder employed his trades or subcontractors? Frequent line-up changes often point to instability.
- Ask for supplier references (lumber, concrete, plumbing, flooring, cabinets, etc.) and find out if he’s paying his bills on time.
- See some of his work – both finished, and under construction:
- Are all the parts and pieces there? Do joints fit tightly? Are things well thought out?
- Do the finishes meet your expectations?
- Is the job under construction neat, organized, and clean?
- Smart builders will competitively bid only commodities (lumber,sheetrock, fixtures, etc.) :
- New, and unfamiliar labor means training and mistakes. A smart builder will not want someone they don’t know “practicing” on your home.
- Basic safety rules – why take a chance on putting unfamiliar labor in the same home with a client when unsure of the laborer’s past?
Don’t get sold a bill of goods. Let all the poising, primping, and posturing associated with the Builder’s Beauty Contest be saved for someone else’s project. Make a great decision and have yourself some fun as you build the home of your dreams-
Our guest contributor is a published author with a must-read book for anybody who is building or remodeling. The Builder’s Beauty Contest is included in this book but there is so much more. Unhinged is an organizational tool that places you in the center of the process along with your contractor and design team, rather than being managed by your contractor. See more about and order your copy of Unhinged here.
For the tech savvy- Bob Hoebeke has also created an APP: BuildCHX – check it out if: 1) you plan to build or remodel 2) you are a designer 3) you want to make sense of the giant jigsaw puzzle of the custom construction process 4) you want to keep your new-build or remodel on time and within budget. BuildCHX offers a linear chronological sequence that will prevent the common delays associated with selections. We all know how costly delays are – this app keeps you a step ahead at all times.
Want more? Bob has a blog… full of sage pointers, observations, advice, a link to project photos- great content.
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