What Happens When You Go "Low Bid"?

"Construction firms often make unrealistically low bids to get jobs… but they can count on finding plenty of reasons later to jack the price up enough to allow for a profit. When the building is underway, it becomes prohibitively expensive to fire the contractor and start anew. The owner has become a hostage."
- Wall Street Journal, 12/05/07

The 7 Top Reasons to be Very Wary of the Low Bidder

I understand that there is a strong motivation to choose the low bidder on a home remodeling or home renovation project especially if it is within your budget and everyone else is above your budget. Unfortunately, it rarely works out. Before you sign any proposal:

There have been countless news stories by leading national and local news magazines about unscrupulous contractors that disappear with homeowner deposits, operate without a license or never complete the work.
Some contractors will simply throw out a low bid as a negotiating strategy. Contractors with integrity give their best price the first time and include specific details of all materials.
Every contractor is in business to make money. If you receive a bid that is 15% or more below another bid - it simply isn't the same job. It can't be because there isn't that much room in a project. The contractor either isn't using the same materials or will cut corners on installation in order to make a profit. There are so many places to cut corners.
As noted in the quote from the Wall Street Journal above, it is easy to be fooled by the low quote and a "nice person". If a bid seems to be good to be true, it is. Call at least 10 references and ask about the end of the job cost versus the proposal.
Many times, the low bidder isn't licensed. An unlicensed contractor cheats the government and if they will do that they will just as likely cheat you. Avoiding them is a smart move. In Michigan, a contractor must be licensed through the Michigan Residential Builders and Maintenance & Alteration Contractors Board to legally perform construction.
Effective April 22, 2010 all remodeling contractors are required to be certified in Lead Safe Work Practices to perform work that disturbs paint in housing and child-occupied facilities built before 1978. This is another area where a contractor can endanger the health of you and your children if they are not properly trained.
Unfortunately for the homeowner, if they hire someone who is not licensed, they have no recourse through the Michigan Residential Builders and Maintenance & Alteration Contractors Board complaint process.

If your are seriously considering hiring any contractor with a very attractive bid to install a new kitchen, bathroom or finished basement please refer to How to Choose the Right Remodeling or Design Build Contractor. Ask all the questions and get the answers in writing to every question before you sign. You will be glad you did.

Specific Examples of What Can Go Wrong with Low Bidders

Cabinets - Cabinets of poor quality will fall apart, hinges come loose, tracks fall off, and drawers may fall apart. Improper ordering can cause huge install delays which will add several weeks to the project. If not properly configured they may not fit the space well or provide the functionality desired in the workspace.

Granite - Bad seams, sub decking shifts - causes seams to spread, if/when filled it looks unsightly... a big investment that looks mediocre.

Framing - Walls that aren't plumb create problems with drywall and finish work. The cabinets and trim work won't be flush with wall or ceiling. You will have gaps that are difficult to fill in and look unsightly.

Drywall - Seams show and uneven sanding - doesn't show up until later and then it's too late... using inferior sheetrock from China can create health issues.

Electrical - Wrong load count used will cause circuits to blow. GFCI not working or the reset button is hard to locate.

HVAC - Uneven airflow distribution means the home won't heat/cool well in all rooms - unbalanced airflow causes an increase in utility bills. It can appear to be cheaper up front but it is much more expensive in the long run because the energy efficiency (SEER) rating will have a direct impact on your monthly utility bill.

Plumbing - Leaks result in interior damage. Inferior (cheap) plumbing components may break quickly and be difficult or impossible to repair as parts may be hard to locate. Can create mold issues which is resulting in a huge increase in mold related litigation. Mold is very expensive to remediate... If noted on insurance CLU report; your home may be considered uninsurable in which case it can't be sold. If you go too cheap on toilets you end up having a plunge your toilets daily.

Windows - Improper installation (i.e. lack of or poorly installed flashing) will create leaks and the associated problems with leaks. The type of windows you install will have a direct impact on your utility bills each month. Is what's being recommended something that is cheap upfront but more expensive in the long run?

Roofing - Improper or inappropriate installations will create problems with storms and the associated winds and rain. This can create leaks that may result in damage to drywall, cabinets, carpet etc... Flat roofs can be really expensive to repair/replace if the roofer uses low quality material. It will be very expensive when you go to sell and the inspection report comes back with the news that the roof needs to be replaced. It will likely cost thousands of dollars and may even cause a buyer to walk away.

Paint - Painting is only as good as the prep work... uneven seams and lines from the rolling brush. If cheap paint is used you have no wash-ability - paint comes off and you're looking at drywall mud... trim work that is sloppy looks even worse when painted.

At Lincorp, we want our customers to know what they are getting for their hard earned dollars. Our step-by-step installation processes for kitchens, baths and finished basements will allow you to compare on an apples-to-apples basis what we are providing versus our competitors so you won't get fooled by someone with a low price.

Many Home Remodeling Companies FAIL in the FIRST 5 Years….

Lincorp has been in Business for

21 Consecutive Years Serving:

Oak Park, West Bloomfield, Southfield, Farmington, Farmington Hills and Surrounding Communities