The Hidden Costs Of Low Bids

The Hidden Perils Of Low Bids

I Mean, Do You Really Want The Lowest Cost Brain Surgeon Operating On You?

Bidding Crowd

Everyone likes to think they got themselves a heck of a deal. But is it true? I mean, come on, how would you know? How many times have you remodeled your kitchen or replaced all the windows in your house with energy-efficient ones? Do you really know the difference between a 15-year shingle and a 30-year shingle if both were in front of you? OF COURSE NOT…. nobody who isn’t a remodeler knows that kind of stuff. That’s where we come in – we concentrate on providing an amazing remodel using materials and methods that will stand up to years of use, and then we present you with a fair bid.

Sadly, there are many ways that a contractor can save enough money on their costs to allow them to offer a crazy low bid on every job, but none of these methods is a win for the homeowner. More often than not, you’ll end up spending the money you ‘saved’ years down the road.

The Scenario

 

You want to update your bathroom out of the last century and invite some remodeling companies to offer bids. Most bids come in around $10,000, but one contractor offers a $7,000 bid that you feel you simply can’t refuse.

If you are like most people, you don’t wonder about the $3,000 difference; you’re just excited that you’ll be saving three grand. But… you DO need to wonder. More so, you need to worry.

Cost Cutting Tricks

 

Contractors can save a ton of money on each job if they don’t care too much about how long their work lasts. So long as you remain happy with their work long enough for their tail lights to disappear from your sight, they’re golden. So, how do they achieve this miraculous price while still seeming to do the job?

(IL)Legalities

Often, that low bid contractor isn’t licensed or insured, and the last thing they want is the local authorities checking on their work. Consequently, they won’t pull permits when they should. Or they just don’t want to deal with the delays that come with permits and inspections. Why? Because they make their money off volume, not quality, and delays eat into their profits big time!

No permitting means no inspections, and no inspections mean dangerous errors can go unchecked. In fact, the lack of a permit could haunt you decades down the line and even prevent the sale of your home if the work was extensive or involved vented appliances, electrical work, or water or gas lines.

But to a fly-by-night contractor, no permits means no delays and saved money. And by the time problems crop up, they’ve moved on to a new business or new town and are nowhere to be found.

Unlicensed Labor

 

If the company you hired is larger than Chuck And A Truck and gave you what appeared to be a 30% discount, it is almost guaranteed that they hire workers by the job. They could be temp agency workers, a buddy from down the street, a friend’s kid, someone off Craig’s List, or any other scenario other than a trained and experienced professional.

Another cost-cutting measure is to allow unlicensed personnel to handle plumbing and electrical tasks. The excuse is often that it is a simple task that any homeowner could do on their own. But that simple task may have serious ramifications on your overall system that only a licensed practitioner would understand and solve.

Mediocre Material

 

While you may pick the design and the finishing material, you must trust that they will be using quality support material, underlayments, framing, fasteners, and supplies. On a low bid job, that trust would be misplaced.

Anything that isn’t visible at the end of the job will be of the cheapest material available. It will initially look exactly like the $10,000 bid would have, but things will begin to fall apart a few years down the line, if not sooner.

Support structures might fail, or leaks may start popping up, or finish materials might lose adhesion and start pulling away from your floors or walls. Worse yet, the issues may remain hidden until they have done structural damage to other parts of your home.

Tail Light Warranties

It’s no secret that the cost of covering warranty work is spread out over 100’s of builds. But when a contractor doesn’t offer any promises that last longer than it takes for their tail lights to disappear as they turn the corner, they can delete that expense from their bid.

Another option is to place the burden on the homeowner to fight with the manufacturer. The inspections, images, and expert opinions are all up to you and your wallet. And what if it’s proven that it’s a workmanship problem? That process can take a long time, and by then, the contractor is probably long gone. They will have likely either gone out of business, moved, or changed their legal name.

It is a well-known fact of the industry that most home improvement contractors only last three to five years before their business folds. Either way, it’s win-win for the contractor and a solid loss for the homeowner if anything goes wrong once the project has been completed.

What You Should Expect With Every Bid

When asking for bids, you will get responses from all types of companies. Some will be a guy and a truck, which can be OK if they are credentialled and experienced with a proven track record. Some will be huge companies with all that and more, and others will be medium-sized operations. Regardless of status, they need to fulfill certain criteria before you consider hiring them to work on your project.

Minimum Expectations

 

There are certain minimums you should expect from any home improvement contractor before you consider their bid. They must be able to say YES to the following:

  • Are you fully licensed?
  • Are you fully insured?
  • Will you pull appropriate permits?
  • Will you use licensed plumbers and electricians when called for?
  • Do you have full-time employees?
  • Do you offer a workmanship warranty?

If your contractor can’t say YES to each of these, move on. Warranties can differ in length and coverage but to have none at all is a huge red flag.

Deal Breakers

 

Deal breakers can be a bit tricky; after all, you have a budget to stick to, so sacrifices do happen. However, some things can’t be done on the cheap if you want your project to last years. The following items MUST be part of your contractor’s procedures:

  • Using good quality materials, fasteners, and glues instead of the cheapest available
  • Always following manufacturer guidelines – if it calls for six nails, five is unacceptable
  • Using full-time employees plus trusted, insured, and licensed subcontractors only
  • Shows you the full text of their warranty – not directing you to a web page
  • Willing to help you deal with manufacturer warranty issues

If you are interested in adding an amazing project to your Chicagoland area home at a fair price, contact us at Krunwiede Home Prostoday to set up a consultation.

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