The Three-Bid Rule for Home Building

Published by Leave your thoughts

The housing industry may be constantly evolving, but certain traditional practices haven’t always kept up with the times. What used to be a reliable rule of thumb may have become antiquated in the current landscape. Read on to learn more about one such example, with regards to the three-bid rule for home building in central Pennsylvania.

What is the three-bid rule?

There has been a long-held belief that collecting three separate bids from three separate contractors should be pursued in the process of choosing a home builder. At first glance, this method may seem to be beneficial for the prospective homeowner. After all, it generally makes sense to shop around and seek out the best available option, especially when contemplating a major investment like a custom home. However, the three-bid rule isn’t necessarily a useful and effective strategy in practice.

Problems with the three-bid rule

A major flaw of the three-bid rule is the assumption that all competing builders are equal. This method assumes that each submitted bid has been similarly prepared and can therefore be compared. However, in reality, each builder will assess a new construction project in their own distinct way, so there will be subtle differences among the bids that aren’t necessarily reflected in the overall cost estimate alone. Each builder also brings their own unique skill set and breadth of experience to the table, which could further complicate a direct comparison.

Additionally, the three-bid rule reduces the comparison between potential home builders to budget alone, rather than assessing each on their merits and compatibility for the project. In fact, an increasing number of home builders refuse to bid competitively to avoid these inaccurate and incomplete evaluations. Builders may also want to know who they’re bidding against to ensure that they’re entering a level playing field.

A more useful alternative to the three-bid rule

Nowadays, many home buyers are choosing a different approach to help them select a home builder. With a negotiated contract, the home builder is chosen based on their abilities and experience relevant to the proposed project. Each potential builder must work within the constraints of the budget that the client can afford, which may require adjusting or scaling back the scope of the project.

By looking beyond the cost estimate alone and focusing on skills and experience instead, home buyers can better base their decision on which builder is most likely to produce their beautifully finished home on budget and on time. To find the right builder for you, be sure to read reviews, look at examples of their work and inquire about their process.

Now that you know all about the pitfalls of the three-bid rule for home building in central Pennsylvania, you can redirect your attention towards finding a quality contractor that understands your vision. With over 35 years of experience in residential and commercial construction, WSL Incorporated has the skills and expertise to deliver impeccable finished results. Contact us today to learn more about our services and get started on your project!

Leave a Reply

Your email address will not be published. Required fields are marked *