How Many Bids Should I Get for My New Home?

The Pitfalls of Too Many Bids

The dilemma of obtaining bids from multiple builders when planning to build a new home may arise.

An Encounter with a Client

Recently I met with Ross at a lot where he was considering building a new home. About 25 minutes into the meeting, I noticed he was distracted by a car that had pulled up to the property.

I asked Ross, “Are you expecting someone?” He told me he was meeting with six builders that day and requesting bids from all of them. As I wrapped up the final few minutes of our meeting, Ross asked if I could give him a bid on his new home. The plans weren’t complete; there were a lot of items that needed to be corrected (the specifications, including the finishes, tile, cabinetry, countertops, etc., weren’t even defined), but he still wanted a bid from me.

I followed up with a letter to Ross affirming that I thought it was a good idea for him to interview six builders, but from my experience getting six bids was counterproductive. When all the bids came back, there would be no common basis for him to compare what was or was not included in the bids. In other words, he would be comparing apples to oranges to potatoes to carrots to tomatoes, and this would only add to the confusion of an already involved process. I suggested that Ross narrow his scope down to one or two builders that he connected with and felt he could trust, like, and respect, and put focused energy in working through the details of his new home.

A few days later at a local builders’ meeting, I ran into Steve, the builder who had arrived after me at Ross’s lot that day. I asked Steve about his meeting with Ross, and he said the project was too crowded for him. Ross had also asked Steve for a bid, and Steve was going to pass.

Search for Value

I’m not advocating you only interview one or two builders, but I am suggesting you narrow your search down to one or two builders. When I know there are many builders competing for the same job (especially if the job doesn’t have a clear, defined focus), I decide to put my limited time and energy where I can be most effective. That’s with people who have narrowed their scope, have a reasonably good idea of what they want, and who value what I value. Then we can put more concentrated effort in to addressing their needs and concerns.

Quality, custom-home builders often don’t have to bid their jobs against other builders because from the onset they have made a connection with the homeowner, discussed their fee structure, and demonstrated their competency. As a result, they can give their homeowners-focused service. This is important because it takes a tremendous amount of time, energy, and focus to execute the process of homebuilding with excellence.

Conclusion

Interview builders first and select your builder based on trust and respect, not necessarily on the lowest bid.

-Sean Sullivan