When should you consider a low bid from a contractor?

By: Shannon Lee , Contributing Writer
In: Old House Musings, Home Improvement Tips

If you live in an old house, chances are you have a great deal of experience with contractors. Though do-it-yourself is a great way to live (and can save a great deal of money), there are going to be times when the only viable option is to call in the professionals. But after they have inspected the problem and turned in their bids, you find yourself in the situation of evaluating a few good contractors to choose which one gets your business.

Sometimes the high bidder is really ridiculously high, but the low bidder is rock-bottom low. In a case like that, we often just throw out the upper and lower bids and evaluate those in the middle. But is that really a good strategy?

Low bidders might surprise you

I have almost always avoided low bidders. This came about after a few serious financial burns, one of which included a bid that kept rising as the work went on. It turned out that the low bid didn't include some of the most important elements -- and as a newbie home owner, I didn't know enough to look for all of those little details. Lesson learned!

But a few months ago, we needed to hire someone to help with our lawn cleanup. It wasn't an average job -- we had a few massive trees down after a harsh winter storm and some serious damage to landscaped areas. Even part of the underground drainage system was damaged.

We carefully reviewed the bids from five companies. The low bidder stood out. He had carefully listed everything he intended to do, which matched exactly with what we believed should be done. His time frame was very reasonable. After going back and forth for days, we went with what actually made sense: the low bidder.

I am so glad we did!

They arrived on time and got immediately to work, each one of the four-man crew tackling something different. They worked fast, but the work was thorough. They ran into a snag -- it would take a bit longer than they thought. The job expanded by two days. We expected the worst, but we were pleasantly surprised when the owner said, "We honor our bids. If it takes longer, that's on us."

In the end, they did a gorgeous job, and came in right on the bid. They might have lost money on the work, but guess what? In the end they made more, because we will hire them for our next job. They have earned a loyal customer.

But then again…

On the other hand, a low bidder might not turn out to be a pleasant surprise. Just the opposite, in fact. How can you protect yourself, no matter which bid you choose? Always start by comparing the bids to ensure they all include the same elements.

Then ask some personal questions: Which company makes you feel more comfortable? Which one gives you confidence? Which ones respond to all of your questions, emails, or phone calls in a timely manner? Narrow it down based on that, then do more homework. Look for reviews online. Ask neighbors about their experience. Talk to anyone who has had any dealings with the companies you are considering.

Then make your choice based on those elements, not necessarily on price.

When the contract is ready to be signed, compare it to the bid. Make sure all elements are the same before you sign anything. Remember that this applies to any bid, whether it's the lowest or not.

Then keep careful tabs on the work as it happens, to be certain you are getting what you paid for. Hopefully you have landed a winner that you will hire again and again!