How homeowners can accurately compare quotes for custom home construction and remodeling

How homeowners can accurately compare quotes for custom home construction and remodeling

Homeowners are used to hearing “get at least 3 bids” before committing to a construction project. This is good advice, as is getting referrals from friends and family. However, offers are only useful if they come from comparable companies and if they are structured so that they can be accurately compared. Many homeowners and even some architects are not good at project detailing.

The most important requirement is a complete set of plans and specifications. If everything about the project is not clearly spelled out, each bidder will make different assumptions – about fixtures, appliances, finishes, etc. – resulting in many different offers. And since each bidder’s assumptions are likely to differ from the buyer’s, the stage is set for conflict during the project. The way to make bidding more productive for everyone is to eliminate the guesswork and give each bidder a legitimate chance to succeed.

1) Buyers should interview three to five builders to see who they would like to work with. If the buyer is working with an architect, the architect will likely have a list of builders who seem suitable for the project. Buyers may also want to call each builder’s previous clients for references.

2) Buyers should invite two or three builders to submit budgets. Note that bidders may want to know who they are bidding against. For example, an established professional company may choose not to compete against a small, less professional company with a reputation as a low player.

3) Provide as detailed plans and specifications as possible to each builder – in addition to being necessary for an accurate quote, this also allows builders to look for discrepancies, incomplete items and other issues. Plans are rarely perfect, so a good architect should welcome such feedback and be willing to make any necessary revisions. This will result in a more accurate budget for the project.

4) Buyers and the architect should also work to remove as much guesswork as possible. Permits are a good example: if buyers have researched kitchen cabinets and decided their level of quality will cost $40,000, they should tell bidders to use that number.

5) Your new construction or remodeling project is a huge investment, make sure the surface protection is specified so that your interior finish stays looking new during construction.

6) Set a deadline acceptable to all parties: three or four weeks is typical for a custom home project.

The quote should include the budget and estimated completion date. It should also include each builder’s policies and costs, including any administrative fees, for making changes once the project is underway. Before making a final choice, the buyer and architect should meet with each builder to review the bid, ask clarifying questions and confirm the numbers. After all, it wouldn’t be good for anyone to rule out a qualified candidate or be in trouble later because there was a math error in the offer.

Custom home builders say at least 20 percent of the plans they see are overdesigned for the client’s budget. This is another reason to work with a reputable builder who can be involved in designing the home from the start, even though they may not have the lowest bid.

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