How to Compare Contractor Bids associated with
Home Construction
By: Mark J. Donovan
Obtaining accurate construction bids
can be difficult enough, but comparing contractor bids can be even more of a
challenge. Home construction contractor bids can vary for many reasons including
the simple fact that you are getting construction estimates from multiple
contractors. Comparing contractor bids can also be a challenge if the
construction bids vary in material and construction methods. This said,
comparing contractor bids can be simplified via a good set of house, or home
addition plans, and by following my basic contractor bid checklist.
Use a Complete
set of Home Construction Plans
Whether you are building a new
custom home, finishing a basement, or simply putting on a deck, provide a
complete set of home construction plans and specifications to each
contractor bidding on the project. Also, include in the specifications
specific features and material you want to see integrated into your home
construction project. For example, include specific brand names or styles of
doors and windows, house siding type, particular kitchen cabinets, flooring
products, appliances, etc.
If you don’t know exactly what you
want, then spend some time at the local home improvement center picking out
items and making note of their prices.
By providing contractors with
accurate and complete home construction plans, including a list of key building
materials, you’ll find the task of comparing contractor bids much easier. In
addition, there is less likelihood of missing or forgetting anything in the
bidding process.
Check for Licenses
and Home Building Organizational Affiliations
Another litmus test in comparing
contractor bids is to look for statements in each contractor bid for contractor
licenses and home building organization affiliations. Though not all states
require home construction contractor licenses, some of the trades such as
Electrical and Plumbing typically do. If the contractor is not licensed or lacks
affiliations with regional and national home building organizations you may want
to pass on him.
How Long has the
Contractor, and his Company, Been In Business
When comparing contractor bids check
to see how long each home construction contractor has been in business, and how
long he has been operating under his current company name. The longer a
contractor has been in business, and working under the same company name, the
more likely of an accurate and honest contractor bid. If he claims he has been
in business for a long time, but he has only been operating under his company
name for a short period of time, this is a clear warning sign that he may have
had legal problems associated with his previous work.
Check for
Insurances and Workman Compensation
When comparing contractor bids check
for insurances and workman compensation. If a home building contractor’s bid
lacks information on his personal liability and property damage coverage, as
well as workman compensation, ask for copies of these policies/papers. If he
cannot present them to you, move on to other contractor bids.
Contact
Subcontractors Referenced in the Contractor Bid
If the home construction project is
large, and/or involves a general contractor employing subcontractors, obtain
their names and licenses. You may want to call them or at least check into their
reputations. That last thing you want on your site is a group of subcontractors
that do not directly report to you and have nefarious backgrounds.
Compare Contractor
Payment Schedules
Finally, when evaluating bids, make
sure you compare contractor payment schedules. A deposit of 10-15% is common.
Anything over this is questionable. By paying too much money up front you lose
your leverage in getting your home construction project completed to your
satisfaction and timeline. Incremental payments throughout the life of the
project are also common, but again, make sure the final payment is not made
until all of the work is completed. The final payment should be a sizeable
payment to keep the contractor hungry to complete the work. Typically the final
payment should be around 10% of the total cost of the project.
To help in obtaining accurate and
consistent home construction contractor bids, see my New Home Construction and
Home Addition Bid Sheets. Each bid sheet includes a separate request for quote
section that you can provide to prospective home building contractors. They also
include a comprehensive cost breakdown table, in Microsoft Excel format, that
allows the home construction contractor to include his projected home
construction costs for every phase of the project.
With these simple tips, you should be
able to easily compare contractor bids and hire the right contractor for your
home construction project.
How to Finance your Home Remodeling Project -
can help provide funds for your new home improvement project if financing is
required.
Additional Home Floor Plans and Home Addition Resources from Amazon.com
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