The 3 Little Bids

Once upon a time, there were three contractors and the time came for them to go out and give their bids to the world.

Just before they left, their mother told them “Whatever you do, do it the best, because that’s the way to get along in the world.”

The first contractor gave a bid to build a house made out of sticks and it was really cheap. It was the easiest thing to do. The homeowner was really happy and signed the contract.

The second contractor gave a bid to build a house made out of straw. It was a little bit better quality than sticks. The second homeowner was pleased and signed the contract.

The third contractor gave a bid to build a house made out of bricks. The third homeowner was concerned about spending more money, but decided to sign the contract anyway.

After the projects were complete, a rain storm came along one night. It washed away the house of sticks. The first contractor went out of business. The homeowners were left out in the rain.

Then the storm came to the house of straw and blew it away. The second contractor was no where to be found. The homeowners were devastated.

The house of bricks stood solid during the rain storm and the homeowners relaxed by the fireplace. The next day, the third contractor came over to check on the homeowners and the house to make sure everything was ok. The homeowners were very happy.

That evening, the third contractor invited his mother over for dinner. She said, “You see, it is just as I told you. The way to get along in this world is to do things as well as you can.” Fortunately for the third contractor and his clients, he learned that lesson. And they lived happily ever after!

Is This a Good Time to Remodel?

When housing prices started to drop, many homeowners began to think that remodeling prices would also drop proportionately. In reality, this has not happened. Why? Because remodeling prices were never artificially inflated to begin with. What we are seeing is something else. And buyer beware.

Many remodeling companies have gone out of business, leaving the pasture wide open for laid off workers, inexperienced in business to create start-ups, as well as custom home builders without the requisite remodeling experience to permeate the market with low ball pricing. This is a recipe for disaster for homeowners, as these inexperienced companies may not be around long enough to finish the job, yet alone handle any future service or warranty issues. While this phenomenon has always been around, in good times and bad, it seems more prevalent in an economic downturn. These companies are often “one man shows” who operate out of a pick up truck and have limited resources. Because of their inexperience, they typically spread themselves thin, under price the job, and bite off more than they can chew. The homeowner is then left to pick up the pieces.

The economic downturn of the past few years has been a challenge for many established remodeling companies, with bricks and mortar places of business. There is the old adage that says “What doesn’t kill you, makes you stronger”. This has certainly been true of many of the remodeling companies that have weathered the economy and held their ground, continuing to provide quality service. Many of these experienced companies have made adjustments in their companies such as taking on smaller projects and finding ways to reduce their costs so that they can stay in business and pass the savings along to their clients. This is different than “low-balling” for the sake of getting a job. The experienced companies, in any economy, understand how to offer a fair price and still make a profit. Their goal is stay in business so that they can be there for today’s clients, in the future. Their success is your success.

With that said, is this a good time to remodel? It depends. If you’ve just lost your job, you’re maxed out on credit and your mortgage is upside down, now is not a good time to remodel. But if you have good credit, equity in your home or a nest egg set aside, it’s a great time to remodel—with an experienced remodeling company. Here’s why.

1. Experienced remodeling companies are getting very busy right now, but still not up to the pre-recession boom. If you’re planning to remodel and want to start soon without waiting a long time, now is the time to do it.
2. Product manufacturers are very competitive right now and many are offering rebate packages and incentives to purchase their lines. This is a great time to take advantage of these savings.
3. Interest rates are at an all time low. If you have equity in your home and can get a loan to make home improvements, now is the time to do so.
4. Because this is not a good time to sell, it’s a great opportunity to make the house the way you want it and be in a better position to sell when things turn around.

Happy remodeling!