THE "SMART QUOTE" TRAP

I've coined it the "Smart Quote".

In its simplest terms: "a quote that is designed to fool you". 

I've learned that some people call it "bid low, invoice high" which in their mind, they are "out-smarting" their competition at the cost of deceiving their customers intentionally or not.

Here's how it works and how you can tell if you might be getting smart quoted.

Let's say you are getting your bathroom renovated and you've gotten some quotes.  We'll say you have 3 quotes to select from.  (By the way, you shouldn't be getting quotes on bathrooms, I'll be writing another article on why)

Scenario "A" is the lowest quote.  "B" is the middle & "C" is the highest quote.  Most people toss away the "C" quote and decide between "A" & "B".  We won't get into how to choose the best quote.  For the sake of the argument, we'll say "A" & "B" are the two you're going to seriously consider.

Now we will use a job scope which is designed to make the point.

• Replace the bathtub & shower unit
• Replace a toilet.
• Replace a vanity.

Now in the world of residential construction, the paperwork is a big indicator on the vulnerability of homeowners.

If the job scope items aren't specified, you're at higher risk of getting "smart quoted".

Contractor "A" says $4,000 (and I'm just throwing numbers at this)

Contractor "B" says $5,000.

Contractor "C" says $6,000.

Contractor "A" says to make changes, then the hourly rate factors in at $150/hr (again throwing numbers at this)

Contractor "B" doesn't say anything about if you want to change your mind AND you think you know what you want.  They, however, throw something in called an allowance though. The allowance schedule shows a breakdown of each fixture and how much they will cost, but if you want to change the fixture and it's more or less then the actual amount you pay is adjusted accordingly.

- "Some people call that clever, 

some call it strategic bidding. 

I think it's deceiving."

You chose an option and here's what happens.

The job has started.  The vanity has been purchased and installed and the tub/shower is on order.  A toilet is brought in and then the plumber says the drain is too close to the vanity or won't fit.  Now what.  We need to replace the vanity(but the contractor doesn't want to pay for a custom vanity OR move the drain.  If you decided to project manage yourself, you're in big trouble.

If you chose contractor "B"... They knew the drain was going to need to be moved but didn't include it in their price.  Despite you not know their hourly rate, they say it's going to cost $1,000 to move the toilet at $100/hr for 10 hours.

If you chose contractor "A"... well they predicted the drain was going to need to be moved, inflated their hourly rate to compensate for their lower price and didn't include it in the scope of work.  They told you their umbrella hourly rate and unless you want things to go sour right now, you need to pay: 10 hours at $150 = 1500 extra.  Some people call that clever, some strategic bidding, I think it's

deceiving.

So updated new "out of pocket" amounts are:

"A" $5,500

"B" $6,000

"C" $6,000

Now that the floors have been jack-hammered, there's a small amount of flooring that needs to be replaced.

Both "A" and "B" didn't reflect that in the job scope and you end up paying $1,000 more for the new bathroom floor.

Updated "out of pocket" amounts:

"A" $6,500

"B" $7,500

"C" $6,000

Now you're going to love this, it's not over!  The biggest part and easiest to control is allowances. Windows are bad for this.

The tub/shower unit shows up and guess what, it's so shallow you can barely get water on you after you fill it or it's uncomfortable, hard to clean, etc etc etc... You want to return it.

Well, contractor "A" says again, to replace this is going to cost $150/hour (say 5hrs) to change the valve accordingly and you need to wait 3-6 mores weeks for the new one to arrive but nothing was said about the cost to upgrade it.  Your contractor refuses to pay for the upgrade. (+ $250)  But now there's tension and conflict and the job isn't even finished because trim, drywall and paint still needs to get done.

Contractor "B" says, ok, $100/hr to replace the valve and the upgrade is reflected in your allowance so you'll have to pay more in this case as that was the deal.  It's not messy, just it costs more.

New updated "out of pocket" amounts are:

"A" $7,500

"B" $8,000

"C" $6,000

The intention is not necessarily to deceive the homeowner, but instead, just to win the bid against cut-throat competition and tradespeople working out of their truck.

At this point you realize you've been "smart-quoted".  Options "A" & "B" ARE going to get out of hand and option "C" might have been the right choice (in this case).

Option "C" is the more attractive quote! 

HOWEVER, this is still terrible for bathrooms and you're going to be disappointed!

Learn why Contractor "D"(the option you never knew you had) is the right choice for bathrooms in another article.

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