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My Opinion On Competitive Bidding:

A Case Against Competitive Home Bidding

There Are Three Main Reasons a Client Wants to Bid a Job:

  • The client does not trust the contractor, therefore, to keep him “honest”, the client must bid the job out. Comment: You cannot make a good deal with a bad guy – the bad guy will always get you.
  • The client is hoping the contractor will make a bidding error and the client will gain a lower price due to the error. So, the client bids the job to then contract with the builder who made the biggest mistake. Comment: Forcing a builder to make good on a bidding mistake is not always in a client’s best interest. Builders who do not know how to estimate properly, do know how to get mistakes back through charges on extras and options.
  • The client feels that bidding the house out will give┬áhim the same type of competition for his business that working two car dealers against each other will. Comment: Houses and cars are as different as night and day. To compare them on price, without considering all of the subjective factors such as reputation, attention to detail, and compat- ability is an invitation to disaster.

Bidding a home out to multiple builders raises the client’s stress level. A custom home takes an incredible amount of time and expertise to bid correctly. These “bidders” are people whom you will probably spend a great deal of time with and will develop friendships. Let’s face it, no one likes to be the bearer of bad news and the client will have to be the one to deliver it to all but the “winning” bidder. Telling a “friend” that they didn’t get the job is very unpleasant and stressful.
If your plans and specifications are poorly drawn and executed, and the bid instructions are vague and incomplete, the bids will be so far apart that it will be impossible to reconcile them and to determine which among them is really the lowest. If your plans and specifications are properly drawn and executed, and the bid instructions are complete, three competent and reputable builders will come up with pricing that is almost identical. If that is so, why submit yourself to the stress of bidding the home out. Choose your builder the same way which you would choose any professional to whom you are entrusting your life savings. That is on the basis of their Professionalism, Reputation, and Warranty.

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