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How to compare contractors' bids

Home renovation projects are significant undertakings. It is common for homeowners who may not have the time nor the expertise to do the work themselves to call in professionals to tackle these jobs.

According to the home improvement resource HomeGuide.com, for a bathroom remodel, which is one of the more popular improvement projects, installation and labor accounts for 10 to 25% of the total project cost. In general, many contractors pay themselves $300 to $500 for an hourly rate, while helpers may make $150 per hour.

Materials used account for the other components of an overall project cost. Homeowners negotiate the best rates possible by obtaining a number of bids from contractors, spelling out both labor and material costs and determining their best option. Here's how to compare bids.

Check as many reviews as possible

Go online, ask friends for recommendations, or rely on the Better Business Bureau to find reliable contractors. A contractor who seems too good to be true will not necessarily be so, but it's still best to vet each professional thoroughly prior to signing a contract.

Cost basis vs bid basis

Certain contractors will produce an estimate based on the best guess of the cost of supplies then add on a flat fee or percentage for their services. This is called a cost basis bid. Others will create a bid that includes all their anticipated supply and labor costs, known as a bid basis bid. Know what you're getting to make the most accurate comparison.

Create a master itemized checklist

It's easy to explain the project differently from one contractor to another when doing so verbally. That may result in a different plan and price. Rather, make a checklist of what you want done and have several copies to give to the contractors with whom you meet. This makes it easier to compare costs line by line.

Have specific materials in mind

Make sure bids are based on the same materials and tasks. For example, if you're comparing window replacement quotes, be sure that each quote is based on the same window material and coating. Vinyl replacement windows may not cost the same as fiberglass or wood. It is much easier to compare pricing when contractors provide estimates reflecting the same materials.

Small versus big contracting companies

Some bids may differ based on the manpower of the company. One contractor may view a project as an easy one that can be slipped right into the schedule. Another may have to devote more time and effort if it is being undertaken by one or two people. This can affect cost in the quote. Furthermore, a contractor who does a lot of advertising in print, television or online, or has an office or warehouse space, may have extra overhead costs that are passed on to the customer.

Doing your own demo

Figure out if the contractor will allow you to perform a portion of the tear-out, clean-up or other tasks to save on labor costs. Make sure this is included in the bid.

Comparing contractor work bids can be tricky, but it helps homeowners know they're getting the best value for their money.

 

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