First, let’s be clear. We’re not talking about “bid shopping” here. That is a term that occurs when a contractor uses a lower bid from one subcontractor to pressure other subcontractors to reduce their prices and thus win the job himself. It’s considered unethical because it undermines fair competition and can lead to compromised quality, as subcontractors may cut corners to meet lower costs.
Instead, we’re going to talk about bid comparison and evaluation which is the process a homeowner uses when soliciting multiple bids from general contractors in the Silicon Valley to evaluate and choose the best one for their home remodeling project based on cost, quality, and other factors.
Usually a good thing and beneficial for the homeowner, comparing multiple bids can sometimes backfire.
5 Ways Getting Multiple Remodeling Bids Can Backfire
Imagine this: you’ve just hired a contractor to remodel your kitchen after comparing several bids. The contractor’s estimate was significantly lower than the others, so you felt like you scored a great deal. But halfway through the project, the contractor disappears for weeks, or corners are being cut, cheap materials are being used, and the result is far from what you dreamed.
Sound terrifying? It happens more often than you think. So what went wrong?
Here are 5 critical reasons how shopping for the lowest remodeling bid can derail your entire project if you’re not careful. We’ll also provide tips on how to evaluate bids and protect yourself.
1. Some Contractors Leave Things Out
The most common reason for wildly different bids is that some contractors may exclude vital components like project management, design services, building permits, or appliances from the bid, while others might.
Example Scenario
Homeowner Sarah receives two bids for her kitchen remodel project. Both contractors offer different pricing and services:
Bid 1: Contractor A
Budgeted Price: $50,000
Included Services:
- Demolition and debris removal
- Installation of new cabinets, countertops, and appliances
- Basic electrical and plumbing adjustments
- Painting of walls
Bid 2: Contractor B
Budgeted Price: $65,000
Included Services:
- Demolition and debris removal
- Installation of new cabinets, countertops, and appliances
- Advanced electrical and plumbing upgrades (to meet modern code requirements and convenience requirements)
- Installation of new lighting fixtures and under-cabinet lighting
- Painting of walls and ceiling
- Floor refinishing to match new cabinetry and/or new aesthetic
- 1-year warranty on all work
Key Differences
- Electrical and Plumbing: Contractor A provides basic adjustments, which might not bring your home up to code or support future upgrades. Contractor B ensures your system meets modern standards.
- Additional Features: Contractor B’s inclusion of under-cabinet lighting and floor refinishing enhances the overall aesthetic and functionality of the space.
- Warranty: Contractor B provides a 1-year warranty, giving peace of mind for any post-construction issues.
Outcome for the Homeowner
While Contractor A’s bid is lower, it may result in additional costs for necessary upgrades later. Contractor B’s bid, though higher, offers a comprehensive package that could save money and stress in the long run.
2. Scope Interpretation Varies Widely
Similar to above, even with a clear project description, contractors can interpret the scope differently.Example Scenario
Homeowner Lisa requests bids from contractors in San Jose for her bathroom remodel. The project description clearly states: “Install new cabinetry, tile flooring, and a walk-in shower with glass doors.”Bid 1: Contractor A
Budgeted Price: $25,000 Scope Interpretation:- Cabinetry: Stock cabinets with particleboard construction and standard hinges.
- Tile Flooring: Ceramic tile in a standard size and pattern.
- Shower: Prefabricated glass doors and a fiberglass shower pan.
- Additional Details: Basic hardware and finishes with limited style options.
Bid 2: Contractor B
Budgeted Price: $35,000 Scope Interpretation:- Cabinetry: Custom, solid wood cabinets with soft-close hinges and premium hardware.
- Tile Flooring: Porcelain tile, installed in a herringbone pattern for added design appeal.
- Shower: Frameless glass doors and a custom-tiled shower pan.
- Additional Details: A variety of finishes to choose from, with designer consultation included.
Key Differences
- Cabinetry Quality: Contractor A assumes stock cabinetry, while Contractor B interprets the scope to mean custom cabinetry with upgraded features.
- Tile Selection: Contractor A opts for standard ceramic tile, whereas Contractor B includes premium porcelain tile and custom patterns.
- Shower Features: Contractor B’s frameless glass and custom shower pan elevate the design and durability.
- Finishes: Contractor B includes more upscale options and consultation, adding value.
Outcome for the Homeowner
While the project description was clear, the scope was interpreted differently. Without reviewing detailed estimates, Lisa might not realize these differences until work begins—or worse, until it’s completed.3. Low Cost Often Can Mean Low-Quality Labor
The old saying, “You get what you pay for,” rings especially true in remodeling. General contractors (GCs) may try to keep costs low by hiring unskilled or underpaid labor. For example, a licensed plumber might be replaced with a handyman, or an experienced painting crew swapped for someone with minimal experience.Example Scenario
A homeowner in San Jose is building a custom home and receives two bids from general contractors for the project. Both include painting as just one part of the scope, but the quality of the final result depends heavily on the subcontractor team hired by each GC. In this example, we’ll consider just the painting portion.
Bid 1: General Contractor A
Budgeted Price: $35,000 for PaintingTeam: Jennifer Davis Painting
- Experienced Professionals: GC A hires Jennifer Davis, a professional painting contractor in San Jose and her a team of highly skilled painters with over 20 years of experience.
- Impeccable Prep Work: Jennifer’s team meticulously preps every surface, ensuring flawless finishes that last.
- Premium Materials: They use top-tier paints and materials, resistant to wear and tear.
- Proven Track Record: Jennifer Davis Painting is trusted in San Jose for consistently high-quality work.
Bid 2: General Contractor B
Budgeted Price: $25,000 for PaintingTeam: Low-Bid Painters
- Unskilled Labor: GC B hires a low-cost painting crew, often made up of workers with minimal training or experience.
- Cut Corners on Prep: Surfaces are rushed, leaving cracks, uneven textures, and paint that may peel prematurely.
- Low-Quality Materials: Basic, inexpensive paints are used, resulting in finishes that fade quickly and lack durability.
- Inconsistent Results: The outcome depends on who is hired for the day, leading to unpredictable quality.
Key Difference
GC A prioritizes quality by hiring subcontractors like Jennifer Davis Painting, ensuring exceptional craftsmanship and lasting value. In contrast, GC B’s low-cost approach compromises quality, leading to issues that could require costly fixes later.Outcome for the Homeowner
Choosing GC A means the homeowner gets a superior result, thanks to a subcontractor team known for precision and professionalism. While GC B’s bid may look appealing initially, it could result in dissatisfaction and additional expenses down the line, including the need to repaint much sooner. This example showcases how the quality of subcontractors impacts a general contractor’s bid and highlights the value of working with a GC who partners with experienced, reputable teams. It reinforces the message that investing in a higher-quality GC can ensure a better final product.4. Low Bids Rarely Mean High Quality
Cutting costs often means cutting corners. Contractors with unrealistically low bids may use substandard materials, rush through tasks, or skip important steps in the process to stay within their budget.
Example Scenario
A homeowner is adding custom crown molding and trim throughout their living and dining rooms as part of their home remodel.
Bid 1: Contractor A
Budgeted Price: $12,000
Process and Quality:
- Material Selection: Uses solid hardwood molding with precise cuts and smooth finishes.
- Installation: Ensures tight, seamless joints with careful alignment, and fills gaps for a flawless appearance.
- Finishing Touches: Sands, primes, and applies multiple coats of durable, high-quality paint or stain.
- Attention to Detail: Ensures corners, edges, and transitions blend perfectly with the room’s design.
Bid 2: Contractor B
Budgeted Price: $7,000
Process and Quality:
- Material Selection: Uses cheaper composite molding prone to warping and chipping.
- Installation: Rough cuts and poorly aligned joints, leaving visible gaps.
- Finishing Touches: Minimal sanding with a single coat of low-quality paint or stain that wears quickly.
- Attention to Detail: Skips finer details, leaving uneven transitions and rough edges.
Key Differences
- Durability: Contractor A’s solid hardwood and quality finish last for decades, while Contractor B’s materials may deteriorate quickly.
- Aesthetics: Contractor A delivers elegant, custom woodwork that elevates the space; Contractor B’s work may look cheap and unfinished.
- Value: Contractor A’s craftsmanship enhances the home’s beauty and value, whereas Contractor B’s shortcuts may require costly rework.
Outcome for the Homeowner
Choosing Contractor B may seem like a cost-saving move, but their subpar materials and rushed execution could lead to disappointment and additional expenses later. Contractor A’s meticulous process ensures a stunning, lasting result worth the investment.
5. Low Bids Can Be a Bait & Switch Tactic
Some contractors intentionally lowball their initial bids to win your business, only to hit you with unexpected “change orders” once the project begins. This practice, known as “bait and raise,” can leave homeowners paying far more than expected. This is not to say there will never be changes, however. Sometimes, the builder will uncover unforeseen problems like wood rot, or the owner may change their mind on flooring, countertops or cabinet choices, for example. Bait & switch is different. It’s intentional.
Example Scenario
A homeowner is planning a kitchen remodel and receives two bids. One contractor’s bid is surprisingly low compared to the others.
Bid 1: Contractor A
Initial Price: $80,000
Final Price: $80,000 (No unexpected costs)
Process:
- Transparent Estimate: Contractor A provides a detailed, itemized bid that includes all necessary materials, labor, and contingencies.
- Thorough Planning: They review the scope of work with the homeowner, addressing potential challenges before the project begins. They have a clear idea of the scope and quality of materials and it’s all included in the bid.
- Open Communication: Any changes are discussed and approved before implementation, ensuring no surprises.
Bid 2: Contractor B
Initial Price: $65,000
Final Price: $80,000 (After multiple change orders)
Process:
- Low Initial Bid: Contractor B submits an incomplete estimate that excludes essential elements, such as permits, structural reinforcements, or high-quality finishes.
- Frequent Change Orders: As the project progresses, Contractor B issues change orders for items they claim weren’t in the original scope.
- Minimal Transparency: Homeowners are caught off guard by unexpected costs and feel pressured to proceed to avoid project delays.
Key Differences
- Accuracy: Contractor A’s bid reflects the true cost of the project upfront, while Contractor B’s lowball tactic leads to significant overages.
- Trust: Contractor A earns the homeowner’s trust by providing a clear and honest proposal, while Contractor B damages trust with hidden costs.
- Stress: Contractor A’s transparency ensures a smoother, stress-free process, whereas Contractor B’s approach creates frustration and financial strain.
Outcome for the Homeowner
While Contractor B’s initial bid appears cheaper, their “bait and raise” tactics result in a final cost far exceeding expectations. Contractor A’s honest, upfront estimate protects the homeowner from surprises and ensures a positive experience.
This example highlights the risks of “bait and raise” bids, helping homeowners recognize the importance of choosing a contractor who values transparency and integrity over deceptive tactics.
Summary and How to Get a Bid You Can Trust to Deliver the Results You Seek
Request Detailed Bids: Make sure every contractor provides a detailed scope of work, including materials, labor, and additional services.
Compare Apples to Apples: Ensure all bids cover the same items and use similar quality standards.
Ask Questions: Clarify any vague language or assumptions in the bid. Understand what’s included and excluded.
Research Contractors: Look for licensed, experienced professionals with excellent reviews and a strong portfolio of past work.
Avoid Unrealistically Low Bids: If one bid seems too good to be true, it probably is. Verify the contractor’s reputation before committing.
Choose Quality Over Cost: Investing in a reputable contractor may cost more upfront but will save you time, money, and headaches in the long run.
By taking the time to evaluate bids thoroughly and choosing a contractor who values quality, you’ll ensure a successful remodeling project that exceeds your expectations. Don’t let the allure of a low bid ruin your dream home.
You Can Trust Bay Builders for a Fair and Transparent Bid
At Bay Builders & Remodeling, unlike contractors who cut corners, interpret scopes loosely, or use lowball tactics to win your business, we pride ourselves on providing transparent, fair bids that reflect the highest quality of work. Our commitment to craftsmanship, attention to detail, and honest communication ensures that you’ll get a result you’ll love for years to come.
Ready to bring your vision to life? Contact us today to schedule your design build consultation and receive a detailed bid that you can trust. Then let’s create something extraordinary together!
