How Do You Know the Pricing Range of a Contractor Before Meeting With Them For a Bid?

Question

How do you know a rough ball park of how much a contractor is going to charge before asking them to come out & bid the work? What signs do you look for so that you don't waste their time or yours when their pricing & expectations don't line up with yours? For example I have met with HVAC contractors that for the same job charge $2500-5000 to replace an ac unit.

Matthew Paul · Answer

I was building decks in a new community , guy called for estimate , he thought he was the Mayor of the street .  Tells me if I give him a great price he will get me EVERY deck on the street .  I said I will do 1 better , you get me every deck on the street I will build yours for FREE .............last after I get every deck .

Bruce Woodruff · Answer

Well, this is what most clients/investors/newbies do not understand. Generally speaking, General Contractors do not have 'more expensive pricing' than others. What they have is a more expensive cost of doing business. I.e., it can cost a Contractor more to provide the exact service than his competitor.

Here's an example - I was a higher-end 'more expensive' Contractor. Why? Because I was Licensed, Bonded and Insured (at a high level, double what the State required). All of my employees were legal citizens, with all of the payroll burden that comes with that (it cost ~$40 an hour to hire a $20 hr employee), and of course, Workers Comp Insurance. I also only hired Subcontractors that were also similar in their approach.

I was asked to bid a project for a lady who knew me through her neighbor, to do a master bedroom/master bath remodel. My bid was about $65k as I recall. She showed me the competitors bid because she really wanted me to do the job. He was at $26k. For the same job.....about 1/3 of my bid.

I did not tell her, but I knew this guy. Although he was licensed himself, none of his employees were legally hired, and most were actually illegal aliens. All of his sub-contractors were the same....no insurance at all, especially the most important, Worker's Comp.

So I just got up and walked away, very politely.

She ended up using me anyway......

Moral of the story is that almost no customers understand this very basic concept of how a business is properly run. We hear from them all the time on this forum...."my Contr is horrible, he took the money and ran, his work is awful, blah, blah, blah..." They seldom realize that it is all their fault.

Matthew Paul · Answer

You wont know , no 2 projects are the same , and no 2 customers are the same . and no 2 contractors are the same .  I NEVER give a "ball park " estimate without seeing the plans or a site visit . All the customer hears is the low range .   Prices for some  materials have come down , but the cost of labor , insurance , fuel , etc have gone up .

Bob Stevens · Answer

Simple one-word answer, experience, Do a few and you too will know

All the best

Bruce Woodruff · Answer

There is really no way to tell. You can try and ask over the phone what their range is. Most good guys will want to have a look at the project before they throw out numbers.

And note that you will turn off a lot of the best ones by asking this, it implies that you're only looking for cheap bids...that's a huge red flag.

Ryan Normand · Answer

I'm with the other contractors here. A quick Google search should give you a rough idea of market rate for most common remodel tasks. If you're willing to pay somewhere around market rate and you're serious about getting the work done, then call out a few contractors and get estimates. May the best contractor win. Competing for jobs is part of being in the contracting business so any good contractor should be understanding of that as long as you're up front and reasonable about your expectations.

Just don't expect to automatically get 30+% off market rate just because you "can provide a lot of work" or because you "have another guy who can do it cheaper"... I see and hear that stuff a lot from flippers/investors and that attitude will actually make contractors mad at you :)

Rick Pozos · Answer

I like to take recommendations from friends or other investors. Has the contractor showed up on time or on a saturday to fix something. Reliability is pretty important to some people.

Some people only want to know the price. I want to know the person also. Do they sound kinda shady or do they sound honest and trustworthy. And then, do they do what they said they were going to do?

Personally, I have to like being around the person. THEN they have to have a decent price. It does not have to be the cheapest price, but can not get too crazy either.

Adam Oldham · Answer

This is usually what I try to do & I always make it clear that I know this is not guaranteed to be the price & that things can change.

How Do You Know the Pricing Range of a Contractor Before Meeting With Them For a Bid?

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