Process Guides / By Carol Wang / July 17, 2018
How to Compare Bids for Your Remodel
Sweeten can help bid-level your contractors’ estimates
One key part of choosing a contractor for your renovation project is comparing estimates. At this point, you have already prepared for a bid and hosted site visits with at least two contractors, and they have emailed you with their proposals. There is no industry standard for what a bid ought to look like—so you are likely to have received estimates that look drastically different from each other. How do you compare them when one is five pages long while the other is just one—or when one is grouped by room, and the other is grouped by task? A note on terminology: “bid,” “estimate,” and “proposal” refer to the same thing.
Sweeten, a free service that matches renovators with vetted general contractors, has an in-house team that can provide personal support in breaking down and comparing bids. Post your project and you’ll have access to a member of Sweeten’s Client Services to help make sense of the various construction bids in front of you. More on that below.
Identifying Similarities and Differences
Even though bids come in a variety of formats, you will probably see that major work categories (like demolition, cabinetry, installation of significant elements like countertops and tile, etc.) are called out specifically in each bid. To begin, find the biggest categories of work in each bid and see how those compare, so you can get a feel for how your candidates are thinking about the work and the time/skill needed to complete it.
There may be spots where bids diverge significantly or you may see categories that are represented in some estimates but not others. For example, the inclusion of skim coating increases the budget dramatically. One contractor may have included it, while another has not. You may also find that your site visits with individual contractors led to ideas or suggestions that didn’t come up with other candidates, making a line-by-line comparison even more challenging.
You should feel free to follow up with your candidates to clarify any particular costs, to give them an opportunity to provide a price for an idea that may not have come up in your site visit, and to ask for their input on areas where taking another approach might help you achieve what you want at a lower cost.
Thinking About Materials and Labor
Assumptions are built into bids in different ways. Site visits gave you a chance to meet with candidates and explain a broad overview of what you want to do. But if you hadn’t yet identified the exact materials you plan to use at that point, each general contractor would provide an educated estimate based on the finishing level you discussed.
Sweeten’s Client Services can pinpoint how or if the cost of permits and materials are included. For example, some bids may include materials as “allowances”—meaning there is a range of finishes/materials that you are allowed within the budget, but anything in excess of that you’ll have to pay for out-of-pocket. Some leave it out altogether.
Look for places where major material purchases (and permits, if applicable) are or are not itemized in the pricing, and see if that varies across bids. The goal here is not to negotiate a particular price down, but to clearly compare your options. Don’t walk away from a great contractor because a price that looks high specifies materials that aren’t included in another bid. Get clarity on assumptions about materials before you make your decision so you aren’t surprised when it comes time to buy items that weren’t in the bid.
The Bid-Leveling Call: How Sweeten Can Help
Delivering an analysis to you
At this point in the pre-renovation process, you’ve met all of your contractors, have received two or more estimates, and have decided to enlist Sweeten’s help in figuring out the bids and learning more about the contractors.
This call, which typically lasts from 30 to 45 minutes, can be extremely helpful in helping homeowners decide which bid is best suited for their project.
The prep: Prior to your scheduled call, you’ll share the bids you’ve received and are considering, including from contractors who are not affiliated with Sweeten. Our expert team will review all of the bids and create a quick analysis, which you’ll then go through on the call, along with talking about anything you’re not clear on—often, this is related to confusion over significant disparities in the cost in one bid versus another, or about the omission of certain line items on one bid that appear on others.
Why an estimate comes in high
Homeowners often want clarification on why the total cost of the project is higher than they initially anticipated, or which items are eating up the budget. Sweeten reviews the estimates line by line to identify the big drivers of cost, as well as the major differences between the bids.
Goals for the phone call
Finally, the goal of this bid-leveling call is to come away with 1) some guidance on how to reconcile the disparities between different bids; and 2) a way to speak with your prospective contractors about how they view the work and distribute their time and effort. At the same time, you can also ask Client Services any questions you might have about specific Sweeten contractors’ communication and work styles, since the company works closely with them.
Questions you’re afraid to ask
Perhaps most importantly, Sweeten renovators have reported that the call was a great opportunity to ask all the questions they were afraid to ask and that being able to do that led them to feel a lot more comfortable with their decision. Email email@example.com to schedule a bid-leveling call and be one step closer to being clear on which general contractor is right for you.
This blog post has been revised and updated since its original publication on March 15, 2016.
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