How do I analyze competitive bids on custom home construction phases?
Let’s say you have three bids for $90,000, $100,000, and $110,000. The first thing you want to do is make sure the bids are as close to apples to apples as possible. The problem is that every home builder has his own way of estimating and may use different categories than his competitors. When the plans are given out to bid, an outline should be given to each builder, breaking down the job the same way. Each builder is then required to fill out the outline with his bid. Now you can compare the electrical price and the plumbing, etc. It is also helpful if you can get information from each builder as to how much overhead and profit or any other markups there might be in the bid. Choosing a home builder should never be based on price alone, but the more clear information you can obtain about how the bid prices were reached, the better chance you have of making the right decision.
