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Construction Project Bids: Transparency and the Numbers Game

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Construction Practices

Construction Project Bids: Transparency and the Numbers Game

On home improvement estimates, feeling ripped off, and transparency

October 23, 2017
This article first appeared in the October 2017 issue of Pro Remodeler.

My husband and I need a fence on our rental property. Nothing fancy, it just has to contain the tenant’s dogs and not be an eyesore. A fence company comes out, looks at the job, and the rep texts me a bid. It’s a lot of money, considering. I text back questions: “What size is the top rail? How deep will you set the posts?” He answers. 

My husband isn’t happy. The man’s estimate has personally offended him. “That’s not a bid,” he says indignantly. “That’s highway robbery! And what, he can’t take the time to type it out like a normal human being?” 

“You sound like someone’s grandpa,” I say. He raises his eyebrows. “I am someone’s grandpa.”  

The second bid is also high but is more reasonable, and we hire the company. Yet it’s not the lower price that makes the difference, instead, it’s two problems with the way the first company handled the estimate. Neither issue is necessarily a deal breaker, but taken together they represent a mind-set that can negatively affect close rates, especially with lower-dollar, higher-volume remodelers. 

First, there’s the question of how to communicate information. Many companies text their clients, and we’ve published columns from successful replacement contractors that highly recommend texting as the best way to stay in touch. But not for a bid. 

I wasn’t put off by the rep’s text, but I do want an emailed bid for my records. My husband wanted that as well, but also felt, on a visceral level—a Baby Boomer-generation level—that if you’re going to submit a request for thousands of someone’s dollars, you should at least take a minimal level of care in the presentation. 

The second issue is more complicated, and it ties into this story. My husband wasn’t told the factors that went into the price, and that made him feel like he was getting ripped off. He’s well aware of overhead, materials, and labor costs, but not having any of that clearly broken out made him suspect that the first fencing company’s bid was overinflated. 

So, how much of that information should a remodeler share? How much transparency will make a homeowner feel secure, while still preserving the professional’s right to privacy and respect as a business owner? (I’m always shocked when I hear stories of potential clients who ask remodelers how much they will make on their project. No one would ever ask a doctor or an attorney that question.) 

Our story looks at the way four very different remodeling professionals handle transparency. Their insights are detailed and illuminating. Enjoy! 

written by

Erika Mosse

Director of Content

Erika Mosse is the director of content for Professional Remodeler. Contact her at emosse@sgcmail.com or 972.369.9212.

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