Greedy General Contractors

Remember when you built or renovated a home? If you do, you got 3 bids from your architect and your contractor and had someone to pick from each category. Today, it seems, at least as far as the contractor is concerned, that you must pay for the bid, which seriously limits your need for a second and third opinion. So, what’s a homeowner to do? It’s true that the shift toward paid contractor bids has made the home renovation process more expensive and less flexible. 

This trend stems from labor shortages, rising material costs, and contractors protecting themselves from "tire-kickers." But I believe there still are ways to get multiple opinions without breaking the bank. I would begin by pre-qualifying contractors on the phone and asking these questions: "When would you be ready to start on my project? If the answer is ‘I’m booking jobs 4-6+ months out’ they’re too busy to bid for free.” "Do you charge for estimates? If so, is it credited toward the job?" “Can you provide a rough ballpark range for the project in lieu of detailed bid?" 

We can also leverage technology by using platforms like HomeAdvisor or Angi to explore the contractors available. As most contractors pay to join, their bids may be "free" to you (but vet carefully as quality varies vastly). 

Then we can make it easier for contractors to come up with a free estimate by using 2D/3D consumer tools, like RoomSketcher which can be subscribed to for less than $25 per month. Intuitive and easy-to-use, it can help us create floor plans by importing our architect blueprints to trace over. From there we can choose colors and materials, add furniture, labels, and symbols, and even save your favorite styles for future projects. 

Having these elements available can convince a contractor to develop a bid at no cost to us. If we absolutely have to pay, we should narrow the field to 2–3 serious candidates before requesting a detailed bid. Again, we ought to begin by requesting a "Ballpark Estimates" and ask for tiered ranges, like "Basic at $50K, Mid at $75K and Premium: at $100K") instead of line-item bids. This would be less work for the contractors and perhaps no cost, or at least less cost for us. We won’t let "Ballpark" steal from us. If the contractor can't give us even a range without payment, we’ll walk away. 

We’ll also make sure to demand verifiable references/photos: A paid bid should come with a portfolio and make it super EASY to contact reference. Resist time pressure to sign fast, time is on YOUR side. We should keep in mind that contractors charge a percentage of the overall cost of the job. These can vary a lot (10% to 12% for new construction, 12 to 20% for remodeling), so another good reason to talk to a good cross-section of contractors. 

Finally we should never forget to add a “Time Clause” (a penalty for not delivering the final product on or before a specific date as we’ll probably be renting a place or staying with friends or family) The bottom line is that you can still get multiple bids—it just takes smarter prep work. Focus on: Pre-qualifying contractors to avoid wasted fees. Standardizing specs (via an architect) to compare apples to apples. Paying only for serious contenders, with fees credited toward the job. 

As this tight market is now showing signs of slow down, be ready to way a bit more as I bet more and more contractors will soon be willing to bid for free.