How To Bid Out A Remodel

As a general contractor, you likely have many areas of expertise. But even the most skilled contractors don’t consider themselves an expert of every trade. There may come a time on a remodel where you’ll need to call on other pros to bid out all or part of the project.

When bidding out a remodel, it’s important that you be transparent with both the homeowner and subcontractor you enlist to help. You’ll want to give them as much information as possible to ensure that the work goes smoothly. We’ve compiled a list of the best tips on how to bid out a remodeling job.

Hiring A Subcontractor

Before you present an estimate to your customer, you must know what subcontractors you’ll be hiring for and how much they will cost. To make a profit, you’ll need to add additional costs, usually around 10% to 20% more than the subcontractor charge. Evaluate the project and write down what areas of the remodel you’ll have to hire a subcontractor for. When looking for a subcontractor, remember that they should be extremely specialized in their specific trade. These areas can include:

  • Electrical
  • Plumbing
  • Carpentry
  • Masonry
  • HVAC
  • Flooring
  • Drywall & Insulation
  • Painting

If you’re ready to hire a subcontractor, be sure to do plenty of research instead of just going with the lowest bid. Although the price may seem great, what’s most important is that they provide the quality of work to maintain your reputation— because, after all, their work reflects upon you. Research their work and ask plenty of questions about their expertise. Be as detailed as you can, so they thoroughly understand the scope of the remodeling project and can properly evaluate it. If there is any hesitation about their work or work ethic, it’s best to continue your search and find someone else.

The Importance of Contractor Insurance

Another important factor when hiring a subcontractor is to make sure they are insured and licensed. Even if it is not required by the state or local government, it’s in your best interest that each subcontractor you hire hold their own license and insurance policy. Subcontractors are not covered under your general liability insurance, and there are many risks associated with hiring a subcontractor that doesn’t have insurance. You could be held liable for damages that happen under your watch, which is not good for your business and reputation. In some cases, you can even be penalized by your insurance company if an accident happens with an uninsured contractor.

Subcontractor Agreement

After you’ve found the right person for the job, you’ll want to ensure you have everything in writing. Some things to include in your written agreement include:

  • Outline of the project
  • Expectations
  • Deliverables 
  • Payment information
  • How communication between client and subcontractor should take place
  • Who is responsible for any problems with the project 

This is a step that should not be skipped. By getting everything in writing beforehand, you’ll lessen the risk of issues and miscommunication.

As you bid out for a remodel, you want to make sure you’ve covered any areas you can think of in your agreement to not only protect yourself but the homeowner as well. This subcontractor’s work will impact the entire scope of the project. A subcontractor agreement will act as a way to hold them accountable and create clear communication on project expectations, for both sides.

Preparing an Estimate

Once the agreement has been signed by both parties, you’ll need to give your customer an estimate for the job. Both large and small remodeling jobs have many parts that need to fit together, like materials, permits and of course, the subcontractors you’re bidding out. Make sure to do a walkthrough with the client and clearly understand their expectations.

Ensuring Quality & Management

The general contractor for a remodel has a big job. The successful alignment of your team of subcontractors before the project begins has a lot to do with the success of the finished product. Hopefully you’ve already presented them with an agreement that has the details in writing. However, you’ll also want to be sure to verbally review everything before the job begins. Go over any safety requirements and procedures you have on the job site.

You’ll need to take charge of ensuring the quality of work from the subcontractors that they agreed to deliver. Regularly check in and clearly communicate project deadlines to be sure the project is staying on schedule. If there are any issues, handle them as soon as possible.

If you’re working on a remodel, you’re likely bidding out many parts. These needs to be scheduled so that no one interferes with the other’s work. For example, having a painting pro come before the wall installation is finished is going to cause problems. Plan for any prep work that needs to be done for subcontractors to do their job correctly.

Remember that managing a subcontractor can be the start of a great working relationship. If you have a subcontractor that is familiar with your policies and performs reliable work, you now have someone you can reach out to for your next remodeling job. Additionally, if you build a relationship with your subcontractors, they will be more likely to refer you to others needing remodels. Putting in the extra time to manage goes a long way.

The Final Product & Payment

When a subcontractor has finished their part of the remodeling project, always do a walk-through inspection of their work. This helps catch any issues before their obligation to the job is complete. Be sure to address anything that is not done to the quality they agreed to.

Once they are through with their part of the remodeling project, it’s now time for you to hold up your end of the agreement. Pay your subcontractor on the day specified in the written agreement. By doing so, you’ll prove to them that you’re reliable and they will be more likely to work with you again in the future.

Conclusion

Bidding out a remodeling job is similar to putting together a jigsaw puzzle. There’re many pieces to account for and they all must go in the right order, at the right time. To do so, clear communication and written documentation is needed. By following these guidelines, you will likely have a great experience working with other pros on your remodeling job and build connections that can help you in the future.