I agree with Joseph on this.

You should already have an idea of what a real budget for what you want costs. 100K or 200K will be determined by your choices. 2015 Cost vs Value

The competitive bid game is just that. You've asked remodelers to compete on price, so, absent any particular specification, they'll use the least expensive materials and trades available in order to "win" the business. In reality, nobody wins.

Why don't contractors just submit their best price for good workmanship, quality materials, and decent allowances for nice finishes? Why is "absent any particular specification" an assumption that the customer wants "cheap"? How about contractors setting their own specifications for quality goods and labor and adhering to that standard? If a contractor is comfortable submitting a proposal using "the least expensive materials and trades available" then he is not someone I want choosing anything for my project.

Jellytoast: because your adjectives "good, quality, decent" are open to any amount of interpretation. They define nothing whatsoever.
Casey

It is up to the person writing the proposal to define clearly what he/she is giving to the customer for the price given. Of course "good, quality, and decent" are just descriptive adjectives in my post on GW ... they are not words that I would write in or pay attention to in a professional proposal. Obviously the OP was able to determine in the proposals she received that they did not allow for the kind of finishes she wants or expects.

jelly toast yes it is up to the person to define clearly what they want. the contractor can only guess and he/she would be wrong also.

sparkleblue75 just do some more research get specs. like the other post suggested and have everyone redo the bid. remember scope of work is key so everyone will be on the same page

"Obviously the OP was able to determine in the proposals she received that they did not allow for the kind of finishes she wants or expects."

jellytoast:

I explained this previously. The contractors failed to qualify this potential customer. Had they asked the right questions and gotten answers to them before ever putting pen to paper, much time and aggravation would have been saved by all.

The customer failed to set the specs on the front end in order to properly evaluate the bids. So of course, the results of that are almost completely useless. That's what happens without adequate design work being done.

I agree with a lot of what has been said here. Additionally, a good contractor will often match the finish level that is standard through the rest of the home, or the neighborhood. Good contractors would not default to putting upgraded materials into an addition for a builder grade home, or builder grade materials into a high-end custom home. So take a look at the finishes throughout your home currently and see how the quoted materials compare. If they are comparable, then you have some other questions you need to answer for yourself.

I would never allow a contractor to specify or select finishes, cabinets, flooring or fixtures for my home. For a bid, they might include an allowance for something not chosen yet, but you'd better know the price of the quality of materials you will ultimately choose before signing if your budget is tight - and make sure he is not going to charge you large sums of money for Change Orders, when you do find what you want.

I would not work with a contractor who (1) opened no meaningful discussion to spec the job or (2) who specified cheap materials for it. Number one is completely unprofessional and disorganized; two, he will be using the same kinds of cheap products and techniques for the building materials. That does not sound like what you have in mind for your home - just getting something done as inexpensively as possible - and he had no business assuming so.

So now you have your feet wet and a bit of info on cost. Do some research and find the products you want installed. Get apple to apple bids. Make sure the contract states work will be done to code and to manufacturer specs and industry standards. Determine whether a permit is needed yourself by calling the township. And, unfortunately, you will have to learn something about construction, too, to ensure they are going to install things properly.

Develop your design specifications. If you cannot, that is where hiring a professional comes into the picture. Having a well specified scope of work on the front end saves you money and misunderstandings in the long haul. People who think they don't need design help often find out that they do when they are at sea trying to get bids that don't really list materials that they would use in their home.

Who has designed the addition, kitchen and main floor changes?

If you don't provide the same information to all contractors you seek bids from then you should expect to have a difficult time sorting out things when your receive your bids. You'll be well served if you find a design professional to help you develop plans and specifications for your project.

If you have to "learn something about construction, too, to ensure they are going to install things properly" you've selected the wrong contractor. Find a real, experienced professional you can trust so you won't have to look over their shoulder. That way you can focus on what you do well and they can focus on what they do well.

"If you have to "learn something about construction, too, to ensure they are going to install things properly" you've selected the wrong contractor. Find a real, experienced professional you can trust so you won't have to look over their shoulder. That way you can focus on what you do well and they can focus on what they do well."

Unfortunately, people do not learn their contractors are not true and educated professionals until after the fact, when they are up to their eyeballs. One learns with experience - with supposedly reputable companies - that they must educate themselves to protect their own interests. Sad but true.

Do you study accounting so you can look over the shoulder of your tax preparer? How about dentistry to ensure your teeth are cleaned properly? Or medicine. Or law? Or plumbing? Or lawncare? Do your homework up front when selecting a contractor and don't feel compelled to try to learn what they've learned in a career. Let them do what they do well and what you are paying them for and focus your energies on your own career/family.

"Let them do what they do well and what you are paying them for"

BTDT

Do you study accounting so you can look over the shoulder of your tax preparer? How about dentistry to ensure your teeth are cleaned properly? Or medicine. Or law? Or plumbing? Or lawncare?

Accountants are degreed and certified. Medical people have been through rigorous education, supervised training and credentialing. Anyone can put on a construction hat and go to work. Totally incomparable.

"Focus your energies on your own career/family" rings a bit like, "Don't worry your head about all this construction stuff, little lady." It's smart for consumers to be involved. I don't advocate looking over the shoulder of anyone while they are doing their jobs, but I certainly keep tabs on anything that personally concerns me, and that would include any construction going on in my home.

You can hire licensed, experienced professionals, with the proper credentials, but they aren't gods. They are human beings who make mistakes and sometimes screw up royally. Homeowners frequent these forums because they want to learn about the things that are going on in their own homes. Sometimes they've been burned really badly by those they trusted and believed were qualified professionals. If they can educate themselves a little on the processes and learn what to expect or what to look for, that certainly can't hurt.

" Anyone can put on a construction hat and go to work."

Sorry, snookums2, but you're not getting away with perpetuating this myth.

The state of Florida put me through 3 separate tests which took a specialized class to pass and I had a 3.67 GPA in college. My Florida Building Contractor's License, CBC1259693, took about 100 hours and about $4,000.00 to obtain, in addition to the fingerprinting and background checks.

I can recommend some herbal tea for your aching tooth, but that doesn't make me a dentist.

@ Joseph Corlett,

Half of the states essentially require nothing (I think it is 24), 5 or 6 require something only if you bid above a certain amount (I think there is one at 10k, a few at 20k and another one or two at 50k), another 10 or so require registration but not certification, a few others require you to take a low fee OSHA course. When it is all said and done very few states really require a license that includes some proof of competency.

And just in case you are wondering there seems to be no predictable pattern to which states are licensed. Florida requires registration or certification, Georgia doesn't, Texas doesn't, Mississippi does, New Mexico does, Colorado does not, West Virginia does, Virginia doesn't.

So, unfortunately, for much of the country even a construction hat is not really required.

Thank you, bry. That explains a lot of people's real life experiences and the sagas we read online, which can be pretty incomprehensible. (I'm not talking about being human and making mistakes here). .

@bry911 I'm not sure where you got your information, but Virginia does, in fact, require contractors to be licensed and regulates them under the Board for Contractors. There are three license classes: A, B, and C. The license class limits the size of projects which the contractor is allowed to undertake. The class A license is required if the size of any individual project exceeds $120K or the total annual volume of the company exceeds $750K Obtaining a Class A license requires successful completion of a course in management and three exams which cover the general and Virginia sections of the building code and business knowledge. A class C license involves a lot less, but limits the license holder to projects of $1K or less.

Like other professions, a contractor's license is no guarantee that a company is the right fit for every client or that they will produce the outcome desired by any particular client. That's what due diligence is about. Lots of consumers consider contractors to be a commodity--one is as good as any other. They shop projects based on price. Then they complain when the process or the end product doesn't meet their expectation. Would you want the low-bid lawyer to prepare your will? How about the low-bid hair stylist cutting your hair? And why should the chef at The French Laundry get paid more than the chefs at Golden Corral?

Back to the OP's question...... as long as you are aware that the allowances are low, you are miles ahead of homeowners who think they'll get Carrera even though the allowance barely covers laminate. Just plan your budget accordingly and know that the actual cost of your finish choices will increase the total bill you pay for the remodel. Beyond that, place weight on your research into the contractor's work: is it a quality end result? Does he watch the on-the-job details? Does he tend to finish his projects on time? Is he easy to contact and does he return phone calls promptly? Etc.

My bad on Virginia. I was just trying to show that there is little common denominator between states that require licensing and ones that don't.

I was not really trying to give specific information just clear up the idea that all contractors are licensed.

Even when licensed some states require proof of competence while many others just require protections against fraud.

Do you study accounting so you can look over the shoulder of your tax preparer? How about dentistry to ensure your teeth are cleaned properly? Or medicine. Or law? Or plumbing? Or lawn care?

Ah, yes, yes, yes, yes, and no. Anything I care about or spend a significant amount of money on I spend enough time and effort learning to be able to understand the tradeoffs and ask at least semi-intelligent questions. And, I have this problem that I'm interested and insatiably curious about most things (not lawn care, though). The one time I used a tax accountant they made a complete botch of it and would have cost me something like $10K if I hadn't looked over their shoulder. My wife is a former hygienist, so I delegate that, and she's very picky. If you are involved with medical issues and don't do your own homework you are, I'm afraid, a fool. In the current fragmented system you are the only one in the entire process who will integrate and coordinate all of the things the various specialists you're seeing prescribe. If you don't do it, you will be very, very sorry, they do incompatible or dumb things all the time.

So too with contractors, especially if you want something done right rather than quick and dirty.

Several times on these forums I have seen contractors compared to things like tax accountants. They are not very good comparisons, (aside from the fact that most people will never have an accountant do their taxes, but will instead use a supervised preparer,) it is just not an apples to apples comparison, the goals are not similar at all. You and the tax accountant want the exact same thing, for you to pay the minimum legal taxes. How well he gets you there is a reflection of his ability.

But contractors are different, and maybe more difficult, because you never really have goal alignment. EVERY contractor has their opinions and biases. EVERY homeowner has their opinions and biases. I believe that most times when you hire a contractor you have a fairly clear picture of what you want and understand exactly what you mean, while the contractor is trying to interpret that. I would think that most renovations are a compromise between the two. Very few homeowners end up with the product they envisioned in their mind. To give you an example of bias what would you think if I said the most important thing to me is efficiency? Or to name a few building practices that help increase efficiency. Odds are we are not on the same page.

Having said all that I am not sure that there is a solution other than due diligence. Certainly, there is something to be said for being an informed consumer, but it is not always as good as people would believe. Information without education and sometimes experience is very often not a good thing. If you don't believe me, go to WebMD and look up the symptoms of the last illness you fully recovered from. You will most likely find a list of diseases a mile long that presented with similar symptoms, a good many of them fatal and incurable, and you can have any one of them. Knowledge is amazing but information isn't the same thing as knowledge.

I was being concise above but I totally agree with riewand that you are best off paying attention to what anyone is doing to you, your finances, your house or anything else you value. People vary in their knowledge base and abilities, as well as their personal ethics. Following blindly is foolish, especially "when someone has their hands deep in your pockets". But as bry says, general information is not education and experience. So you can only protect yourself so much, to make informed decisions. As a layperson, I do not want to make technical calls. That's why we hire pros. But experience teaches people that they better know enough to gauge who to hire.

No doubt diligent, responsible, knowledgeable professionals are valuable and worthwhile, but that is not what we are talking about.

If a customer doesn't end up with what they envisioned, it's because they had poor documentation as to what they were expecting. Poor communication and bidding apples and oranges doesn't originate with the contractor. It starts with the homeowner who doesn't understand the correct process. It's starts with the specs on the front end. People think they don't need design help, but good specifications is one of the value added services that hiring a designer provides.

"Lots of consumers consider contractors to be a commodity--one is as good as any other. They shop projects based on price. Then they complain when the process or the end product doesn't meet their expectation."

Where does the OP say that she is shopping based on price only? As I read it, she is questioning why she is receiving bids that are based on low allowances for finishes. It would appear that the contractors are competing on price, without regard to the finishes that the client wants or expects. Asking for proposals on a project is not saying, "Give me your cheapest price." Sure, some people shop that way, but not everyone and I wouldn't guess that most people shop that way. Price is certainly a consideration, but there are many other things consumers are looking for besides price. Contractors, too, should not view their clients as one is the same as any other. Poor communication works both ways. Contractors are in their element in this process. Homeowners are not.

Sophie, I agree with you most of the time however, i don't think acustomer ever truly gets what they originally envisioned. Even the design process is a give and take. The end product may end up being better, or more affordable than their original vision. If you knew exactly what you wanted then a designer would be redundant. Just tell the contractor what you want and that you are willing to spend millions.

One intangible in selecting a builder is the relationship you'll be having. You're not going into a car dealership where your relationship with the guy lasts a few hours. Most build projects last a few months minimum and some for a year or longer. You'll be joined at the hip to your builder for that period so you better feel comfortable with him/her. And that comfort level can't be defined by a number. That's one reason, among a few others, I don't recommend competitive bidding for a personal residence project.

Also beware of the lowest number. That thinking is probably best summed up by a fella by the name of John Ruskin, an economist and a bunch or other stuff 100 years ago. He calls it "The Common Law of Business Balance":

"There is hardly anything in the world that someone
cannot make a little worse and sell a little cheaper, and the people who
consider price alone are that persons lawful prey. It's unwise to pay too much,
but it's worse to pay too little. When you pay too much, you lose a little
money, that is all. When you pay too little, you sometimes lose everything,
because the thing you bought was incapable of doing the thing it was bought to
do. The common law of business balance prohibits paying a little and getting a
lot, it can't be done. If you deal with the lowest bidder, it is well to add
something for the risk you run, and if you do that you will have enough to pay
for something better.

Good luck with your project. Exciting times!

a contractor's license is no guarantee that a company is the right fit for every client or that they will produce the outcome desired by any particular client. That's what due diligence is about.

I don't see that not following manufacturer specs, industry standards and using the correct tools and techniques of the trades are the right fit for anyone. Nor is sloppy workmanship. These are basic skills of the job which are reasonable expectations of any customer, that I don't see have anything to do with being the "right fit" or not for a customer.

You can run into this with the highest bidder. I have had it happen with the high bidder that was recommended by a K&B designer in a high end show room.

I actually wrote an article about this process that may be of some value to you.

The article is an 8 step process that should help direct you to the right contractor.

working with contractors

One thing that is super clear to me now that I never would have considered initially is that you can't just take an estimate and swap out materials to get different pricing ideas (how much would my project cost if I went with hardwoods vs. laminate, for instance), as surrounding structural materials change, installation time/costs change, and so on with every material change.

They can give you a quote, but it's never going to be realistic. It's never what they quote you unless you go to a box store (IE Lowes etc). I have three major contractors come out for an addition. Quotes were low to high and nobody had the full stuff on there. The last one told me it's IMPOSSIBLE to give you and estimate because there are so many variables. So you should take the middle quote, add a 10% contingency on that and an addition 10% for "stuff" you want to put in like furniture or knick knacks... I found every time I do a room, I spend at least 10% on 'extras' not related to the actual work (Ie curtains, rugs, pillows, and in a kitchen maybe some bowls, towels etc). Then you'll have a realistic budget.

As for picking the contractor, I used to be fixed on price till I got shoddy work twice! NO MORE. Now, I pick based on research. I make sure they have brick and mortar shops and I make sure they're licensed, insured, current on that, and I ask about work schedules etc. I am paying a lot more for my addition but the clincher for me personally was they said they'd work with me if I went over budget, that I could paint or seal the floors myself or something. Whereas another contractor told me NO I can't do that (it's his reputation on the line) and the other contractor was drawing his ideas on scrap paper and planned to submit it to the city like that without blueprints! So I knew I didn't want that guy and I knew I didn't want the snooty one (who also gave me the impression his firm was too big and maybe he felt I wasn't gonna have the money to do it). I liked the middle guy because he had a 3D model expert and designer and told me he's work with me on what to cut/not and also told me that the crew would be strictly mine till the project was done and not be off days doing OTHER work etc. That was the clincher. Was totally worth paying more for that.

So pick out who's going to do quality work and work with you. Not just the lowest bid or the best known. All things count.

Nothing beats a direct question, ''What had you budgeted for this job?''.

If you get the classic, ''Well, you tell me what you'd charge!'' then you tell them that there can be all manner of hidden costs to doing a shower pan, and you have done them anywhere from 4K down to $800 and their project will fit in that range somewhere. Then ask the questions about the site conditions that establish you as the expert that they want to hire.

If they're still interested after the basement to penthouse ranges are verbalized, then you can set up a service consult, for which you charge a nominal fee that will be credited towards the project should they choose to go with you. If a $60 ''service assessment'' keeps someone from having you out for a looksee for a project, they either aren't serious about doing it, or were really looking to pick your ideas so they or someone else can do it. People tend to value the things they pay for a lot more than things that are given to them for free.

We never give a price without knowing every screw, nut and bolt that is going into a project. The only thing we leave in the air is paint color as that doesn't affect the price. I don't see how a bid can be accurate without knowing specifically what materials you are working with. Classic subway tile is far easier and cheaper to install than glass tiles in the same size and shape. Without specified materials, your contractors can't give apples to apples bidding.

I never bid, I bill. Bidding is a race to the bottom. Since there's nothing for me at the bottom, I won't participate.

"Nothing beats a direct question, ''What had you budgeted for this job?''.

If you get the classic, ''Well, you tell me what you'd charge!''

I get this on occasion, but have to explain that what I charge has nothing to do with your budget and therein lies the problem. I must know what your budget is because I won't waste time guesstimating. No budget, no estimate. Next.

I Agree with Joseph, my prices are my prices regardless of the customer. Everyone gets charged the same. What I think the job is worth may, or may not, be anywhere close to what the customer expects. Oftentimes when I explain the numerous steps, products, and procedures the customer reaches an understanding of why we charge what we do. Add to this conversation; it always costs less to do it right the first time. About 75% of our income is from fixing other contractors horrible work.

Cabot & Rowe:

I make a decent part of my living fixing the work of others too.

To me, asking "what's your budget" is like a car dealer asking "what do you want your monthly payment to be?" I don't have a fixed dollar amount that I can spend on anything, or a hard cash limit in most cases. Every purchase is an individualized value calculation, and I don't happen to know what everything in the universe costs.

If I'm looking for a contractor to build me a new kitchen, I have in mind the level of function and finishes that I want. I have no idea what that will cost. So if I say "$5000" then I'll end up with Habitat Restore cast-offs and sheet vinyl floors. No good. But if I say "$100K" then I'll end up with exotic counters and stuff I really don't value. No good either. So starting with a budget doesn't work for me.

What does work is "here's the look I'm after. I want wood cabinets, granite counters, drawers in all the bases, and heated tile floors." They say "that will run between $40-50K." Then I say "hmm, that sounds reasonable" or "Hmm, that seems like more than I want to spend, can you break that down between the components so I can see the cost drivers and decide what's worth keeping and what I want to cut out?" And yes, for me it comes down to things like "it's an extra $1500 to put double stacked crown molding on the cabinets? Nah, never mind on that." But I might bump my budget up by $1500 for heated floors.

Do most people really know what they want to spend on a bathroom or kitchen or room addition? I have to shop first, and have a collaborative process to figure out what budget I'm most comfortable with.

"Do most people really know what they want to spend on a bathroom or kitchen or room addition?"

Yes.

Why would a car dealer run with you all over the lot only to find out the cars you love are beyond your means? He would have wasted his time and yours. A contractor is no different. By disclosing a budget range, you signal that you're a serious customer, not a tire-kicker, and show an appreciation for the time of a professional.

Again, the cost of things has nothing to do with your budget. Your budget comes first, then we talk about the cost of the things that use it up.

To be sure, folks need some calibration regarding what they can expect at various price points. The Remodeling Magazine Cost v. Value report is a good place to start, as Sophie suggested. You can drill down to see project costs for your particular region of the U.S. If you missed the link she provided, here it is again http://www.remodeling.hw.net/cost-vs-value/2015/

Joseph, I totally understand that you don't want to bid/compete on price, but how and when do you communicate with the customer how much something is going to cost? The homeowner likely only has so much money available or has to qualify for a construction loan (or whatever) and can't go into a project without being confident they'll be able to pay for it.

Having spent the last two years on an extensive remodel, I can completely see that you can't know everything that's going to come up and can't provide a binding price in advance, particularly for a large project. And I can also see that it's best to find out the general budget and then provide guidance on how that budget might work (it helps scope material options, whether you can move fixtures, etc.).

But homeowners often have absolutely no idea and no frame of reference for how much projects might cost and so even coming up with a budget initially is entirely beyond them.

What is the best way to approach costs initially (for both the homeowner and contractor)?

Vanessafox:

At our first telephone conversation, I will be asking what the nature of your project is. Don't start with "I need someone who is going to blah blah, and then blah blah to finish it up." Just tell me what's wrong, or what you would like to accomplish. I've got the "how".

Next, I may give you three examples of similar jobs I've done previously and ask which one seems somewhat close to your project. You'll pick one, I'll tell you how much it cost and ask if you are comfortable in that budget range. Then I will shut up until you speak. I don't care if there is an uncomfortable silence for 20 minutes. You will reveal a budget or the conversation will be ended politely.

If you gasped at the price of your selection, I'll explain why a licensed and insured professional cannot be compared to the guesstimate your brother-in-law made, the one that used to do a little carpentry, after a few beers the other night. Now I'm feeling around to see if you're a tire-kicking time wasting cheapskate, or a good prospect with an honest case of sticker shock. It does happen.

I will ask how you got my name and if you've read any of my reviews. If you picked me out of the phone book and are disinterested in any of my previous work, I'm not coming out to take a look. I've worked incredibly hard to get those people to say those nice things about me and if that has no value to you we aren't right for each other.

You'll get no "free estimate", but you will get a fair trade of information. You show me yours and I'll show you mine.

There's no way to get an accurate bid from anyone. You can't account for going in for permits or to dump materials and it may have gone up since the last time... or a door or window might have a mistake in calculation means a custom door instead of stock... or maybe that tile the customer wanted and you quoted on as the contractor is no longer in stock. There are too many variables, down to gas prices and changes in taxes and then there's time delays for unseen issues ... anything could happen! Heck you have seen HGTV when they think the load bearing beam is good and find out later it's notched out or something and a new beam must be put in. Granite costs vary soooo much. So do appliances (there are like 500 Fridges to choose from). No client is going to tell you a specific make, model, color etc. It just doesn't happen.

And that's why nobody can come in and give you an accurate quote.

Before you can get useful competitive bids for work you need to design and document it. If using allowances or unit prices for materials you don't want to select at this time, you might as well include your own estimate of the allowance or unit price amounts in the documents and avoid receiving confusing bids. The allowances are really just little Cost of the Work contracts within a Fixed Price contract so they only represent your preliminary budget.

Just reading all of these helpful responses to my post. We started looking into this a year ago and definitely had sticker-shock by what we found this would truly cost. We live in a HCOL area but most of the houses in our neighborhood were built in the '40's and have modest remodels/additions. No McMansions here. We initially were just talking to contractors but then decided to use an architect to come up with plans which was a huge help in scaling back the project. We now have plans from the architect and have found a contractor that we want to use. Even though we've cut back on the amount of work we were originally planning to do it's still a big job and still expensive. The contractor that we're planning to use is actually one of the ones who gave me pretty small allowances. Some of them I'm finding to be doable, others aren't but at this point I'm definitely going into this with both eyes open. We have friends who used him and I've also spoken to several references and he has a reputation for keeping up his end of the quote (vs the allowances which are my problem) and doing quality work. The upshot is we're still going to spend more than we'd hoped but pricing everything out in advance is a huge help as we know what we're generally in for. We did end up getting some quote from higher end companies that had more generous allowances but everything was higher - 30 to 50% more than were planning on spending with this guy.

Be careful the allowances can be the devil in disguise. Also don't forget about the contingency 15-20% for the oops that ALWAYS happen!!