It’s a smart idea to interview several residential contractors about repairs or remodeling when working on your house. That way, you can to only compare bids, but also get a feel for each contractor and decide if how they do business is a good fit for you. It is generally recommended that you seek out three estimates before deciding on which contractor to choose for the job.
This conversation is much easier if, while evaluating contractors for your project, you have asked them to provide separate and specific line item pricing for labor items (such as demolition, plumbing, framing, flooring installation, painting, etc.) and finish material quotes (for things like flooring, tile, plumbing fixtures, lighting, doors, etc.).
By breaking the quote down into labor and finish materials you will be able to compare like products and pricing from multiple contractors and you can give feedback to let them know where they were competitive and/or non-competitive. It also gives you the assurance that you can choose the finish materials you prefer at the best possible prices and without having to pay any contractor mark-up.
It is rare to actually get a job broken down exactly this way, however. Contractors don’t often like to provide an itemized cost breakdown if it may be used against them when it is shared with other builders who could cost their work to beat it.
When comparing bids, though, it’s best to recognize that you shouldn’t necessarily select the cheapest or the ‘nicest’ person. Large price differences should be explained, because a price-only decision almost always costs more in the long run. If most of the bids are in line, and one is way high or way low, it would behoove you to learn why before dismissing or selecting that bid. Just the cost of having the appropriate insurance / bond could drive up the price and be the legitimate difference between winning a job or losing it to a bid that appears lower.
In addition to a detailed cost bid, you may also want to request references and check online reviews. If you get references, you can not only talk through another customer’s experience, but may actually be able to see a contractor’s work at a home. If references do not pan out, or a contractor refuses to offer them, you may not want to work with this contractor.
Once you have chosen your preferred contractor, you should tell them — and also the contractors that you did not select — that the bidding process is completed. It is important to also tell those that are no longer in the running so they know they don’t need to hold open their schedule for your project.
A simple phone call to the person who provided the quote may be easiest, but if you have trouble rejecting someone this way, an e-mail or letter can also suffice.
Be direct, but polite, remembering that you may want to use this businesses for a different job in the future. You want to prepare a short statement explaining that they were not selected that leaves no opening for them to try to renegotiate or respond with alternatives or a new sales pitch. Thank them for their time and ideas, but be firm that at this time you have decided to go in a different direction for the project.
Here’s one example of a contractor rejection notice:
Thank you very much for providing a quote on our home remodel/repair. We appreciate your time and effort.
Unfortunately, I am writing to inform you that you were not selected for our project. The criteria we used to evaluate and choose a contractor included: [list the criteria: price, personality, experience, references, options presented, timeline commitment etc.].
Your company did not perform as well in our evaluation vs. another contractor due to the following reasons [offer honest feedback].
We won’t be able to work with you on this job, but will keep you in mind should you be a good fit for future work.