Comparing Contractor Quotes

In a previous blog, Michael shared a checklist of what to look for when reviewing a contractor’s quote or contract.

• Experience (credibility, past work and referrals)
• Price (is the middle just right?)
• Project Timeline
• Communication and clear scope of work
• Quality and knowledge of products
• Materials included and NOT included
• Size of team
• Don’t like them? Don’t hire them

Check out a transcript of this video below:

So let’s talk about the rule of getting three quotes, okay? So we often hear about this, that, let’s first of all open this with saying that if you have a trusted general contractor who you’ve got an existing relationship with, and you enjoy working with this person. Keep working with that person, okay?

I’m not gonna suggest for you to start shopping around for the sake of, spending your time or getting quotes. Okay? So let’s imagine you do not already have an existing relationship with a really great general contractor. Typically the rule here is to acquire three quotes. Now, if you are a brand new investor and you’re like, okay, I’m going to go get three quotes for my job.

What now? What is it that you’re actually comparing? And if actually I pause for a second and back up, even before then. We were talking about this yesterday that if you’re going to get three quotes, this isn’t a matter of, I’m going to get the highest end quote that I can possibly find, and then I’m going to find like a Goldilocks quote of somebody who I think maybe looks good and then get like a crummy quote just because I want to get like high end mid end, low end.

Yeah. Amanda’s talking about before you even bring somebody out to your property to get a quote.

You don’t want to be getting somebody that has obvious signs that they’re cheap and don’t really know what they’re doing. Just for the sake of getting a low end quote. What I would suggest is qualify three people, three different companies, qualify them first before getting a quote.

Be, don’t even waste anyone’s time. Don’t waste your own. So get three qualified contractors, bring them all out, and then after you’re, after you get the quote, then you’re gonna be looking at the different costs and what are the different things and options that the contractors providing you.

You don’t want to be getting quotes from people that don’t know what they’re doing.

For the sake of getting three quotes.

Just because it’s going to save you some money.

Eliminate the people that you don’t want to get quotes from right off the bat.

And get three quotes from three quality experienced contractors.

And then evaluate those three quotes.

So let’s talk about what it is that we’re actually looking for. Okay. So we’ve been super clear about your rule of three quality quotes and what you’re going to compare.

So the first one is, you’re looking for somebody with experience. Can they demonstrate that they are a credible person?

Can they show you some of their past work, and how about some references or referrals here as well? So if you’re just going to be shopping online to get a quote and somebody just has an ad on, say, like a Kijiji or a free posting website, if that’s the only information you can find about this person. No, they’re not a quality quote.

However, if they’re just advertising here as a traffic source and they provide a link to say their website where you can go and find out more about this company or this individual, then that’s when you’re going to start your qualification process. So I think a website is something that’s very reasonable in the year 2020 (and beyond) that they should be able to show some of their or a lot of their credibility and their past work as well. Okay, so extremely important. Word of mouth is also extremely important as well. You can usually trust what somebody is saying if they’re really happy with somebody’s work versus they had a terrible experience with a general contractor. So ask around.

Ask around within your own Keyspire community, talk to your neighbors, talk to people that you know, and you should kind of know the who’s who of your investing market.

I would say the number one tool you’re going to have for identifying whether or not somebody is even somebody want to even get a quote from is definitely their portfolio.

And it like Amanda said, it can’t just be like four little blurry pictures on Kijiji. If somebody is reputable. You should. You should be, you should have dozens and dozens of photos. Getting your eyes on things. If you have that option, that’s really important.

Yeah. But the portfolio is number one.

Yeah. And then let’s talk price. Okay. So again, if you’re getting three quotes, this isn’t an automatic that, oh, you go with the cheapest price and you’re making your decision on price only. That’s a big mistake. And it isn’t as if… Oh, I want a premium renovation, so I’m gonna go for the highest price.

That’s a big mistake. Or selecting, as I mentioned, the Goldilocks price in the middle. Again, that’s a big mistake. You are not only selecting which of these quotes or these contractors to go with based on price alone. Okay?

So now the Goldilocks price might be the price you want to go with.

Maybe.

But it’s really important that you guys learn to evaluate a quote, learn to evaluate the project what is it that’s actually being offered for this quote? And I don’t just mean are they throwing in a free toilet? Understand the products that are being used. And I’ll give you, I’ll go back to the bathroom renovation again. There are guys out there that are still renovating bathrooms with 40 year old technology.

Like for example, not products that aren’t mold proof products that absorb water like cement board or mesh steel mesh laugh on the floor with a scratch coat. These products are completely outdated, but they’re a lot cheaper. Okay? So you may hire a tile guy. He’s planning on doing your bathroom with these older products, and it comes in cheaper, and he may know how to install the tile and he might have a lot of experience and he might know what he’s doing, but when you start looking at the materials he’s using, Is he using Kerdi board?

Is he using Kerdi membrane to completely waterproof your shower? Are these products even something that this guy’s ever worked with before?

Or is he using the stuff from the eighties that really just is going to get wet and probably create a mold problem behind your tile after one year.

And this is just an example. There’s countless products that have come out, especially over the past 5 to 10 years. Just healthier air quality products, vinyl products that don’t absorb water, mold proof, waterproof, environmentally friendly product. So learn to evaluate what it is that your contractor is going to be using and working with, not just the final finished product. Not just what the tile is and what it looks like that’s going on the wall, what’s going behind those products.

But they should include that in their quote as well. It should be outlined when they’re giving you a full job description. And so it should show the quality of the products to be expected, and also they should be able to articulate a general level of knowledge about these products as well.

And that’s in your quote, that needs to be included.

Right, it should be in your quote.