How to Get the Best Price and Value Out of Your Multifamily Renovation Bid

BY BETSY ELAINE TYURINBusiness Development Coordinator

World Builders Inc.

Expressions like “caveat emptor” and “you get what you pay for,” have only become more poignant with the fluctuations in economic stability our country has been facing since the latter part of 2009. As companies downsize, mechanize and restructure, it becomes harder and harder to tell the difference between the professional organization that is running slimmer and smarter versus the so-called “general contractor” that is merely a little guy with no overhead running his company out of the back of his truck. However, one thing that has not changed in the last decade, is the fact that choosing the wrong general contractor to work with can be disasterous. Sometimes the guy who gives you the lowest bid in order to get the job only does so because he plans to cut corners or blind side you with change orders once the job is already in progress and he can hold your property hostage in order to exact payment. And the last thing anyone wants are surprises. Here are some tips to help you sort through the chaos and find the right person or business, as well as get the best price for your renovation project:

Develop a Solid Scope of Work for Your Contractor to Bid.

Different people have different visions for the best way to handle a project, and therefore, different contractors will have different ideas about the approach they would take to working on your property. Therefore, if you don’t give the contractors bidding your contract a clear baseline standard of information you want them to provide, you cannot be sure that you are comparing apples to apples. By setting certain fixed variables such as paint technique or gutter size, you can get a better view into how the bids you are viewing compare.

Don’t Be Afraid to Share. A lot of business people feel that showing your cards up front can be a poor negotiation tactic because if you say what you are willing to pay for, you will get just that and nothing more. However, one point to consider, is that if you don’t give your contractor a ballpark figure to aim for, you could be disqualifying a higher bid from someone that might have tried to meet your budget requirements had they known what to shoot for. You may also be able to negotiate a better deal by letting your contractor know different work items and trades you want to address over time as budget allows, and your contractor can help you plan the mose effective way to meet your overall objectives. The best contractors can even help you meet with your banker to explain why and how the investment will pay off. The price may very de-pending on whether you intend to contract one item at a time, or can make a commitment to a full scale project.

Help Get it Right the First Time. A lot of the unpleasant surprises that happen in any construction project come from inaccurate measurements or oversight of the full amount of materials and labor a certain work item requires. If you can provide your contractor with site plans or blue prints that include such information as square footage and number of units, your estimator can compare these against his own measurements to decrease the margin of error.

Think Outside the Project. Chances are, if you are a property manager or developer collecting bids for a single project, it might not be the only project or bid your company is working on. By looking at the bigger picture there are lots of ways you can save. Perhaps you want to bid a job for exterior paint, and your company’s maintenance team has a great pur-chasing relationship with a major paint supplier like Sher-win Williams because they routinely purchase paint for interior make-readys across fifteen properties. Consider using this supplier relationship to determine if you may get a better price on your exterior paint job by having your company order the exterior paint through this channel and asking your contractor to simply price out the labor for applying the materials you provide.

Harness the Power of Relationships. In any business arrangement, people are motivated in large part by their perception of the ability of the business relationship to grow and be profitable to both parties. Even if you can’t confidently tell your contractor about the next up and coming project you have to work on, you can network your contractor into your circle of colleagues in the business. Helping each other build relationships in the industry leads to better production because your contrac-tor aspires to live up to your recommendation, and better prices because they know that your relationship is solid and they have reason to be loyal because future work will come down the road.

Keep the Communication Flowing. One of the biggest things that separates the men from the boys in the construction industry is customer service. A good contractor will be able to respond and adapt to your changing needs in a timely manner. This doesn’t mean that they can read minds. If you perceive something in a project isn’t meeting your ex-pectations, contact the construction manager immediately. Often, the impulse is to just deal with the on-site superintendent on a project, but this person doesn’t always have the means or incentive to pass the information higher up, so calling the main office can help ensure your prob-lems are heard by someone who has their eyes on the big picture and can better solve your problems.☐