The Design-Bid Approach Can Lead to Problems

Hiring a builder based on bids is incomplete at best

One of the ways to go about designing and building a custom home is the design-bid method. The design-bid approach is when homeowners first find an architect/designer and then find their builder after the plans are done. Or, a homeowner could purchase an online pre-made plan, then search for a builder. Usually, the homeowner sends the plans out for competitive bid by two, or three, or even more builders.

On the surface, design-bid, or competitive bid, may seem like the logical way to get the best price for your new custom home. But the competitive bid is not the best way to get the best value or even the true cost for your custom home. And, it can lead to many unintended problems.

Why the Design-Bid Process Fails in General

No two builders are the same, and each will bid the house using different assumptions. Successful cost estimating only comes after the builder spends time with the homeowner to understand what they want in their home. The builder often has to discover the homeowner’s wants and needs by asking questions and this can take hours of time working together. Only then can a reasonably accurate estimate be given. If this process is skipped, as is often the case with competitively bidding, then the cost is based on each builder’s guess of what the homeowner would like. Some builders will use inexpensive products and finishes in their bid, thus making their bid appear low, some builders will use quality products and finishes and their bid will appear high, while others may be in the middle somewhere. Which price is right for you, and how do you pick the best builder for your house?

No two homes built by different builders are ever the same even if the same plans are used. And often, even if the same builder is using the same plans to build two houses, those houses will still be different because the location and customers are different. Adding to these differences is that house plans and specifications for custom homes generally don’t have all the needed details and finishes and they require the builder to make many decisions and judgment calls. These decisions will widely vary from builder to builder and will widely affect the bid amount as well. The homeowner must go through each bid in great detail to know what is included and not included in the bid, and sometimes, competitive bidders intentionally make their bids vague or overly complicated. Not to mention that homeowners will have a different home building experience and level of service from each builder. Trying to choose the right builder from a collection of competitive bids is almost impossible because you don’t have all the information you need.

Builders know that despite what homeowners say, a lower bid will be more likely to get the project, so sometimes a competitive bidder will artificially lower the estimated final cost with the assumption that change orders will be used to increase the contract amount. Competitive bidding discourages the best builders from bidding since the best builders understand that they will be competing against builders who may submit a low bid to get the job and then use change orders to increase the contract. A good builder will not use this deceitful tactic. Competitive bidding encourages shortcuts, lower-quality materials, less-skilled managers, lower quality craftsmen, and other things that are not good for the home or homeowner. In these instances, the bid price is usually not the entire cost of the project and the low bidder can then use creative ways to increase the final costs. Another important consideration is that projects that are bid too low, often have problems, delays, or quality disputes that always seem to increase the final cost of the project.

The Choice Builders Design-Build Difference

Choice Builders is involved right from the beginning. We provide input, guidance, detailed plan reviews, pre-purchase lot walks, and a host of other design services that can’t be realized if Choice Builders is brought into a project after the plans are finished. Typically, we design the homes we build, but sometimes we work with our customer’s designer. In many instances, our services extend beyond what a typical builder provides. There have been times where we’ve helped coordinate water right transfers or septic design, or sometimes the homeowner doesn’t have power onsite and we work with the power company to facilitate those details. We provide constructability reviews, site assessments, budget reviews, and help to select products and finishes. Competitive bids simply do not reflect these levels of service, guidance, and communication you will receive with the Choice Builders process.

A Choice Builders home is built to reduce the total cost of homeownership. The cost in a competitive bid only represents the home’s cost to be built, with no regard to the total building cost. The final cost to build a home, plus the cost of owning and maintaining the home, is the total cost of the home. Competitive bids focus only on the building process and provide an incomplete view of the total cost of ownership and may even sacrifice long-term costs for a short-term gain.

Choice Builders designs and builds to keep the total cost of homeownership low. Our first step is by lowering energy use. Our homes are designed and independently certified to be better built and to save you money every month on your utility bills. We go beyond just using more insulation and energy-efficient appliances. Our approach is a whole-house approach where each component is considered in a way that makes your whole home more comfortable and saves you money on utilities. Choice Builders has an excellent track record of exceeding our client’s expectations. This means better than expected efficiency, savings, and comfort.

The second way Choice Builders reduces total home cost is to reduce ongoing maintenance costs and increase the lifespan of systems in the home by using more durable, lower maintenance materials. Our homes are built with products that are proven to perform over time. This means you’ll spend less money (and time) each year maintaining one of our homes. The annual savings gained by owning a Choice Builders home can be significant.

A third way we consider the total cost of your home is harder to quantify. Our homes are built with your health in mind. Many building products contain high amounts of VOCs, or Volatile Organic Compounds. These compounds are what you smell in a typical new home, or a new car and it is actually glue, sealants, paint, carpet, and a whole slew of materials curing, off-gassing, and releasing chemicals into the air. VOCs can also be found in the glues that make plywood, OSB, MDF, and other engineered wood products. VOCs are known to irritate nasal airways and may even contribute to asthma in children. Indoor air quality is very important to healthy living so Choice Builders uses only products with low or zero VOCs. Whether it's paint, or insulation, or flooring, the products we use do not emit chemicals that affect your health. And the products we use are chosen to provide a lifetime of performance. When you walk into a Choice Builders home, you may not even notice that the air inside doesn’t have a smell- it won’t smell like paint, or glue, or anything- just fresh, clean air.

While there are other builders in the area that claim to build energy efficiency, no other area builder has earned the professional certifications that Choice Builders has. What do these certifications mean to you? They mean that you have chosen a builder that understands the science of building and stays current with modern home building methods. We even have a third-party verifier inspect and certify that each home is better built and meets our rigorous energy efficiency goals. With a Choice Builders home, you know exactly how your home will perform instead of hoping for the best.

A decision to hire a builder based on competitive bids is incomplete at best, and inaccurate at worst. And the inaccuracy is even greater when you add in the benefits of a Choice Builders home. If you use competitive bidding and choose the midrange or even the highest bid, will you not be assured of a successful, high-performance home that is delivered on time and on budget.

When you decide to work with a builder, you should consider their track record of building great homes in the size and budget that you want. You should check with their satisfied customers and references. And, you should assess your ability to communicate with them and to trust them to do a good job. Last, but not least, you should feel as though you are getting a fair price and a good building experience. We’re not saying that using Choice Builders will be more expensive or less expensive than using another builder. But we are saying that you will find that the services provided by Choice Builders are proven to deliver a home that is comfortable, healthy, and high performance, with amazing service at the best value and total cost of ownership that we can deliver.

As Benjamin Franklin said, “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”


Booklet: What you need to know before hiring a home builder. A guide for home buyers.

You should feel confident and excited during your home-building process. After all, the builder you choose could mean the difference between a project that's done right, on time, and on budget and one that costs too much, takes too long, and is fraught with quality problems.

But with every builder claiming to be qualified, how can you be sure you’re picking the right one?

Download What You Need to Know Before Hiring a Home Builder, written by Choice Builders’ owner, Roger Thomas. This guide will help you choose a builder who is right for you.

In it, you'll find answers to questions like:

  • How do I make sure a contractor can build to my budget?
  • Why do some contractors appear to cost more than others do?
  • Should I ask for a “free” estimate?
  • How do I choose a good contractor, let alone the best one?
  • How should I compare prospective contractors?
please enter your first name
please enter your last name
Please enter your email address.
Please let us know you're human.

With this download request, you are giving Choice Builders permission to email you information about building a home.

Our Affiliations and Professional Credentials:

Energy Star logo
LEED certification
Passive House Institute U.S. Certified Builder
Certified Green Professional National Association of Home Builders credential
U.S. Green Building Council LEED certified
Houzz Best in Service
Cedar City Rotary Club
Better Business Bureau A+ Rating
Cedar City Chamber of Commerce
Certified Aging-In-Place Specialist. Houses for Living. Homes for Life.
RESNET Energy Smart Contractor
Iron County Home Builders Association

Let’s Get Started!
Your Dream Home Awaits.

Choice Builders logo
U.S. flag ribbon for Veteran Owned Business

The Choice Builders logo and is a Registered Trademark of Choice Builders, LLC.

About Choice Builders
Where We Build
The Choice Builders Difference