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Featured Issue: Improve Your Home Improvement Savvy
How to Compare Bids
When considering which contractor to hire, be sure that each of the bids you've accepted for the project include the same features and quality of materials. That way you'll be comparing apples-to-apples and not apples-to-oranges. Decide exactly what quality level of paints and finishes and brand/model appliances you want, first, so each contractor can bid on the same specifications. That way you'll be making an informed decision and can negotiate with greater strength.
Avoid 'Low Ball' Bids
Be wary of bids that differ from other estimates by 25% or more. Unusually low bids are tempting but dangerous. 'Low-ball' bids can be a red flag that the contractor is in financial difficulty, and is desperate to get your deposit money in order to complete a previous job that may have been under-priced. It can lead to many additional problems, such as liens being filed by subcontractors or suppliers who may not get paid because the contractor underbid the job. Low ball bids can also set the stage for job abandonment, if you balk at paying more for the job than the original contract amount.
The logic of the standard recommendation that you solicit three bids is based, to some extent on the fact that it's easier to spot a low-ball bid among several estimates. Two of the three estimates might vary by between 10% and 20%, which is a normal range. The low-ball bid would stand out in stark contrast. While you might feel a frugal urge to accept the low bid, remind yourself that the odds of getting any financial satisfaction from a lawsuit resulting from job abandonment are slim-to-none. Accept a low bid at your own risk.