Which is Best, to Negotiate Price with an AZ Custom Home Builder You Like or Bid Out the Project to Multiple Contractors?
As AZ custom home builders we work with potential customers for months, if not longer before breaking ground on their custom home. In the process of getting to know some of our customers and they getting to know us, we are often asked about the selection process for choosing an Arizona general contractor. We are often asked if it is better to choose a builder that you like and trust and negotiate the price, or to bid out the process among several general contractors?
At Woodridge Custom Builders LLC, we will work with you either way. If you competitively bid the project or work with us from the beginning of your project, we send all of our jobs out for bid. Our subcontractors know this and do not rest assured that because they have worked with us before, they will automatically work with us on every one of our jobs. Many of our customers perform thorough research, become acquainted with our work, and acquainted with us enough to feel comfortable negotiating price. We often get to know potential customers and have them get to know us by inviting them to various events, such as ‘wine tasting’ events, ‘Chef Yan’ cooking demonstrations, and Open Houses of newly completed homes. These events build our relationships and allow potential custom home buyers to get to know us, meet with our suppliers, and to meet other customers.
Bidding out a job to various contractors is another strategy for selecting AZ custom home builders. To some, this is the NASA strategy, where a customer is looking for the lowest bidder. It has been our experience that the lowest bidder doesn’t really give the customer the best price in the long run. It makes sense on paper, but in actuality the bid is based on a set of plans that are sometimes incomplete and fraught with errors. Not only does each builder calculate the bid on a different level of service and quality, some builders under-bid to get the job knowing full well they will make up the difference later in change-orders and upgrades. Competitive bids are not usually apples to apples. One builder may include a granite allowance for Grade 3 granite while another will bid for a lower Grade 1 granite, knowing full well the customer is not likely to choose Grade 1 granite; so he’ll mark up the upgrade and make money on the change order later in the project. The same type of builder will bid the project for a lower grade of drywall texture, knowing full well a customer will not want the standard tract home finish in their custom home, so he’ll mark it up when the customer upgrades the texture to 90/10 finish often incorporated in Arizona luxury homes.
Knowing what a customer wants and bidding the job for the features, amenities, and selections the customer has actually made is the best way to bid the project. Building a custom home is one of the largest purchases one may ever make, it is not recommended to shop it around like a car unless each bid is apples to apples. As AZ custom home builders, we send potential customers to our suppliers during the bidding process so the bid is based on actual selections and minimizes allowance items that can increase the cost of construction later when a home owner makes upgrades that may have been included in another contractor’s bid to begin with.
