Got a quote that sounds too good to be true

[phantom]

My husband and I finally decided that if we want our basement to be finished we have to hire a contractor because we'll never get around to it if we keep saying we'll do it ourselves.

The area we're talking about is about 1000 sqft. and completely unfinished. Our plans include a full bath, a gas fireplace, and a small wet bar. We went into the project saying we'd like to spend about 30k, but we were expecting to need to spend closer to 40k to get what we wanted, and we agreed our max was somewhere in the low 40s.

We are in the process of getting quotes from 3 contractors. The first guy, who my husband really liked gave us a quote of 43k and is scheduled to come talk to us about what changes we could make to get that a bit lower. The second guy quoted us 16k for everything minus the fireplace. (He is working on a second quote for the fireplace.) We haven't heard from the third guy yet.

Now I'm really torn. The second guy's quote is so much lower than anything we expected that it's setting off all sorts of "too good to be true" alarms in my head. But, man, it would be really nice to keep an extra 20k in our pockets. We asked about seeing examples of his work, and he showed us pictures on his phone and online. When I pressed about seeing examples in person, he said that since they were in people's houses that wouldn't be an option. I feel like he should at least be able to give us a few references though, even if people don't want us in their houses. Even though I backed down in the moment, I think we're going to need to insist on a couple of references if we do want to go forward with this guy.

We are definitely going to see where the third quote comes in and to see if the first guy can come down at all before making a decision. But, I'm curious what others here think about the really low quote.

[StormRichards]

I agree it sounds too good to be true.

One thing we haven't done as often as we should (which is always) is check the BBB for the contractors we are considering. You should also check for online reviews. Sometimes just googling the contractors name will bring in a wealth of information.

[bjl584]

ask for some testimonials and pictures from some of their past clients.

[phantom]

The BBB doesn't have any records on him. The only review I can find is a 5 star review on BuildZoom, which is the site we used to find him. There are examples of his work on his web site and on BuildZoom. It's really hard to judge the quality of the work from the pictures. But, there are some things in the pictures that worry me a little, like details on tile work don't feel balanced. Between the pictures and the mockup he did of our space that wasn't at all to scale, I'm starting to think maybe I can just write him off as not having the level of attention to detail I'm looking for. But, part of me recognizes that I made a snap decision that I didn't want to go with this guy when his quote came in so low and that I'm now looking for reasons to justify that decision.

[Fishindude77]

Run away from that cheap guy as fast as you can. This will likely be a miserable, long drawn out mess.

If you haven't bought a lot of construction, your best bet is to go with someone a friend has worked with, and was satisfied with. No need to even get bids, just go on trust.

Better to pay more and get what you want, in a timely fashion than to have your house a shambles for months on end and wind up with a crummy job.

[Singuy]

I say keep getting quotes. We had wild quotes for our pool and for our foreclosure. Our pool quote ranged from 80-130k. Our foreclosure quote ranged from 40-100k. I wouldn't worry too much if a quote comes up to be 50% of another. Some contractors really like to take advantage of you not knowing anything and just throw wild numbers out there.

Of course we went with the cheapest quotes and all turned out to be fine. YMMV

[snafu]

Do these contractors have licenses? Who actually does the work? Who buys the materials/products and how is it paid? How much do they ask for [up front?' I worry that they'll make a start and then be unavailable for weeks. Return and ask for more money because ABC XYZ. Who inspects the work? What if the work doesn't meet code, use the wrong size plumbing stuff. Who does the wiring? Journeymen electrician? What if there is water seepage after heavy rains? Warranty, guaranty, holdbacks?

I presume you know tradesmen get discounts for materials from suppliers as part of their profit. So many products have A, B, C levels of product and few of us can tell by examining unless they are side by side by side

[rennigade]

I couldnt imagine hiring a contractor that wasnt through word of mouth. And word of mouth of someone I know.

I see ads all the time on tv or hear them on the radio...I guess people hire these individuals. Ad time isnt cheap.

[bigdaddybus]

I agree with most others on here and keep shopping around.

I used someone that was 10% higher than average and had great reviews for a deck/spa install.
I came to find out that he offers benefits (paid time off, helped subsidize medical cost, small retirement match) for his 5 employees and they were all professional, content, and just a pleasure to work with.

I like to shop around, I like to save a buck, but sometimes you exactly what you pay for.

[MonkeyMama]

I would only hire the lowball guy if they came VERY highly recommended from people I knew and trusted. Doesn't mean it's not right, but it is definitely a red flag.

I'd even ask the other contractors what they think about the lowball quote. They may be biased, but they would also be more "in the know". They are the ones that get hired to fix the messes made by other contractors.

& definitely dig around. We actually rarely hire anyone recommended because most people we know are financially clueless (& gullible?). So I've been REALLY unhappy with recommendations in the past. But checking BBB, looking up license, checking online reviews, etc., we've been really happy with everyone we hired without a recommendation. But... I haven't hired anyone to do more than maybe $2k worth of work. For this kind of job, I don't know.

[rennigade]

Generally its good to find someone who is licensed and insured...but thats not always a deal breaker.

My father has done contractor work for decades on the side. He's never been insured or licensed. Then again he doesnt touch electrical or plumbing jobs. Those are high risk. He basically only works with anything and everything to do with lumber (finishing basements, installing windows, roofs, building additions, tile/wood flooring.) His rate is $25/hr. Most if not all is under the table so maybe thats why his rate is so low. He's never advertised...its all word of mouth.

Sometimes he hears quotes on what people are charging for a job and he just cant believe it. Prices for materials do not vary much from location to location. Just what they charge for labor is ridiculous. You can argue equipment is expensive but thats not even true. Once you have the equipment it lasts a long long time. If anyone has ever built out a bathroom or spare room...you know there isnt too much in terms of equipment thats used. Nail gun, air compressor, screw gun for sheet rock, circular saw, hammer, utility knife, measuring tape and a pencil. That equipment can pretty much build out any room in a house...and all those things will run under a grand for quality items.

[~bs]

are they licensed and insured? check to see if any complaints were filed against his work. Sometimes contractors can be a lot cheaper than others, especially if they're small owner owned and operated. Big operations have more bloat and admin expenses. It could be just that the first contractor bid high.

A very rough rule of thumb, assuming non-luxury materials is that the labor rate cost = 1.00 - 1.25x the cost of material. So if the material is $10k, the labor should be 10k-12.5k. If you're buying basic materials at home depot for $10k and the labor cost to install 10k of material is $30k, there may be something wrong...

[97guns]

When I'm looking to have a project done I generally get several quotes and go with the cheapest guy, never had a problem with the cheapest bidder and don't really worry about shoddy workmanship because I hold the money until I deem the job satisfactory, if have to I will tell the guy to pound sand. If he is licensed then he can come after me, if unlicensed then most likely he will walk away with his tail between his legs.

My mom has a great contractor that we trust 100%, been working with him for over 20 years. he recently sub contracted an electrical job out and the work wasn't done to code, he paid the guy off and didn't pass inspection, he had to rip up a lot of Sheetrock to fix it, then he went to the license board and the guys license was bogus, no record

[TexasHusker]

“The bitterness of poor quality remains long after the sweetness of low price is forgotten”

– Benjamin Franklin

[phantom]

Thanks for all the input!

I would go with a personal recommendation if I could, but we haven't had any luck with that route. We called a couple contractors that never returned our calls, one guy just didn't give us a good impression, and we talked to one guy who was in the middle of a job for someone we knew only to have the person who recommended him un-recommend him after seeing his finished work. But, I looked it up just now, and the guy who didn't give a good impression was also right around 43k, which is probably a big part of why 16k seems so very low. Unfortunately, I can't find the quote from the guy whose finished work ended up being bad, but I think I'll keep looking for the sake of getting a useful data point.

All the contractors we're talking to right now are people we've found through BuildZoom, an experience we've been pretty happy with so far. It's certainly easier than Google or a phone book. We gave them some information about the job and had calls from enthusiastic contractors within hours. The site shows insurance and licensing information for everyone as well as the numbers to call to verify that information. We haven't verified anything yet, but we definitely will before making a move.

The guy with the low quote has been pretty clear about what materials and what grade of materials he is or isn't including in his quote, and most materials are included. He left out things like the pendant lighting for over the bar, but he'll install that. Other than the fireplace, there's nothing obviously missing from what he's covering that would up our costs significantly. Of course, I'm assuming that no matter who we go with and how thoroughly we plan, there's still a good chance we'll run into unplanned expenses.

While we've never dealt with a general contractor before, and thus don't have anyone we've used before and can trust, we used a custom home builder for our house and a company that specialized in decks for our deck. The house building experience taught us a lot about getting everything in writing and pushing back against shoddy workmanship. But, I'd happily pay more to avoid some of the fighting we had to do to get people to fix issues with our house, especially since we can afford it. (We had a wall that they rebuilt about once a week for about 2 months before they could get the noticeable bulge out of it.)

We have a meeting with the guy who gave us the 43k quote tomorrow to talk about whether or not there's a way to get that down a little. We're also still waiting for that third quote. We're supposed to have it by the end of the week.