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Lowball Bidders: Low Price Or High Cost?

If you've ever priced out a renovation job for your home, you've likely contacted at least one home improvement professional (or somebody purporting to be one) in order to get a quote for the work to be done.

The biggest concern when searching for a quote for some people is the lowest price. For others, it will be value and quality. As a homeowner, you too might be allured by the former; what could be wrong with getting my renovation project completed at the lowest possible price, you might ask?

For one thing, you should know that it is almost a certainty that low price and high quality will have an inverse relationship in the home renovation industry. While getting a "low price" for your project is certainly possible, it is likely that the quality delivered by the company or individual offering this price is of a much lower level than what would be provided by a firm quoting a higher price on the same job. Say, for example, that you have three different contractors come to your home to take a look at a project. Two come back with roughly comparable written proposals, highlighting a scope of work, finishes, and materials, while one other one calls back and gives you a number that is 30% lower than what the other two had quoted, with no written presentation at all. In your mind, the person who quoted the lowest price is the cheapest, right?

Wrong. It is more than likely the case that the lowball quote is based on an unrealistically short timeframe for completing the work, missing and/or inferior materials, cheaper labour that is subcontracted to unqualified and/or uncaring individuals, and a host of other cost cutting measures that are designed to do nothing other than give you an unrealistic expectation about how much the work actually costs to do in a proper and professional manner.

In my own travels as a residential contractor, I have come across numerous other general contractors who are looking to have a variety of jobs completed. Often times, these contractors are looking for very cheap labour to complete time and detail intensive projects that they do not have the expertise to complete in-house. Now, how does this make sense you might ask? Generally speaking, as detail level increases, so does cost, as time and effort needed to complete the job adds up drastically and somebody has to be paid for it. However, these general contractors may themselves have underestimated the level of work and skill required to do the job to the homeowner's satisfaction, and are thus put in a position of having to find somebody to complete the work for the low price that they had quoted. This, unfortunately, benefits nobody. Think about it for a second: If you, as a homeowner, find a low initial price appealing, and want to pay as little as possible, how would you feel if the general contractor that you had selected to actually undertake the work was searching for subcontractors to do this very job at the lowest price to him? How would you feel knowing that, out of a number of subcontractors for the various components of the job, the general contractor had selected the cheapest bidders to work on your home? If you find yourself feeling concerned about the prospect of this, your instincts are guiding you correctly.

If a general contractor cannot do a good enough job of explaining the features and benefits of a quality home renovation project, and instead resorts to a litany of cost cutting tactics of cutting corners, utilizing low quality materials, hiring inferior subs, and skipping important steps like permitting, etc, then he or she is doing you no favours. In cases like this, homeowners are often left with low quality work that needs attention soon after completion due to flaws and defects, if the work even ended up being completed. Worse still, the contractor who originally did the work may be hiding under a rock because they already took your hard earned money and have no intention of completing follow up work or taking care of their customers. I have seen this time and time again, where the low bidder leaves the homeowner high and dry, after having taken a large sum of money for inferior work. And, unfortunately, this is where the "high cost" side of things comes into play.

At the beginning of the post I wrote about the third contractor: somebody who offers the lowest price over the phone, quick to assure you that they're the cheapest and the best and will have your job done quickly. Fast forward to the end of the job, after the contractor is gone: After the quality issues arise, and flaws in the job are exposed, you may find that significant portions of the job were done incorrectly and will need to be redone as a result. Because the third contractor isn't returning your calls and has no intention of rectifying shoddy workmanship, you are left with the prospects of finding another firm to redo portions of or worse, the entirety of the job itself. This new contractor will be left with the job of dismantling the poor quality work, often involving removing expensive finish materials like hardwood flooring and marble tile that cannot be reused, and then redoing the work properly, which involves paying the right trades and sourcing new material. Because this is being done the second time around, it will end up costing you much more: You will have ended up paying twice, when the right thing to do would have been to hire the right contractor to begin with, and pay only once.

This old adage holds up better than ever in the home improvement industry, and that is: You get what you pay for.

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