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The 3-Bid Rule: A Better Alternative

August 8th, 2023 | 4 min. read

By Phil Parsons

The 3-Bid Rule: A Better Alternative

If you’re looking into a home remodeling project, you’ve likely run across the rule that you should get three estimates. The Rule of Three (™ pending don’t @ me) is repeated so often, it’s basically a remodeling meme. And it’s not bad advice…but it’s not good, either. 

Well, one good meme deserves another: 

Why is this scene a meme? Because it reminds you that you can follow every rule in the book, and still get buyer’s remorse. Three quotes or three hundred, numbers can’t answer a simple question: what do you want?

At KP Contracting, we thrive on helping people get what they want out of their outdoor living spaces. Years of experience have taught us that an arbitrary number of quotes won’t answer the question of what will give you long-term value. Answering that question requires a different approach.

By the end of this post, you’ll have a better-than-bids alternative for picking a contractor. You’ll learn a new framework that will ensure both a good relationship, and a finished product that will meet your needs.

Breaking Out Of The 3-Bid Rule

If…the customer still insists on three estimates, I tell them to think of it this way: If someone asked me for the name of a good tile sub, I'd recommend one contractor, not three. You either recommend a company, or you don't.”

  • Phil Rea

Why does this quote make sense? Easy: it illustrates how an arbitrary number doesn’t guarantee quality. Getting three quotes may give you a slightly better idea of prices, but there’s one important question even 1,000 quotes won’t answer: will you be happy in the future? 

The 3-Bid Rule looks backwards, not forwards. It asks “did I check all the boxes,” and not, “will the finished product make me happy in five years?” To answer that question, you need to replace the 3-bid rule with a different set of questions. 


3-Bid Alternative #1: Does the bid have what I value?

While it is shrewd to keep price in mind, an over-focus on cost can make you miss out on fulfilling possibilities. That’s the implicit trouble with the 3-bid rule: it fixes your view on whether you could do something for $X, to the point where you don’t think what you should do. Call it the Ian Malcolm Rule of Value (™ pending again).

That “should” isn’t a hard sell, it’s the start of a conversation. Ask yourself why you’re thinking of renovating in the first place. Do you want a space for entertaining, or an escape from a busy job? Do you want a pool where your teenage kids can play volleyball, or a smaller space that suits two empty-nesters? If you do want a smaller pool, is it for water aerobics, or just for relaxing in a hot tub?

Asking “does the bid have what I value?” is less about price than perspective. Sometimes, you may come to realize that what you’re actually looking for is a different sort of project. For instance, a customer may think they want a deck, but come to realize that what they’re really looking for is a screened-in porch. That’s a realization that can happen only if you’re thinking first of what you want, and second of a bottom-line price. 

When you think first in terms of value, you realize another answer to “how many bids do I need”: as many as it takes to find a contractor who values the same things you do.

3-Bid Alternative #2: Does the bid show a communicative, trustworthy company?

Does the bid reflect a company who communicates well? If a company is responsive, that’s the first sign they communicate well. A willingness to use your preferred method of communication is another good sign. A major renovation is as much a relationship as a project. After all, these are people who will be coming in and out of your home for several months. When you consider that, you realize that communication and trust are more important than the initial price. 

Instead of looking for the lowest bid, look for a company who wants to educate you. Are they as interested in giving you the right information, as they are in closing the sale? A reputable contractor will be more interested in telling you what materials might cost, what the timetable looks like, and what options might work better. They’ll probably send you information to read, so your conversations are better informed.

A good example comes from Marty Morse of Morse Remodeling, who says finding new customers is “not really bidding.” Morse instead “make(s) [the process] structured so people understand where they're going and where they are in the process.” This educational approach is in service of “working to develop that relationship with the client.” 

Robert Kraft of Kraft Custom Construction finds success by thinking in terms of relationships first, and bids second: "When people call me, I'm also interviewing them to see if they are a good fit.” Kraft’s overall approach is to deemphasize numbers, and instead “educat[e] clients about value so they will understand that what they are buying from him is not a bid or item but a service.” A contractor who communicates for these purposes is one who wants a solid relationship with you.

Reviews provide a wealth of information about a contractor’s communication skills. Customers will often praise good communication, and complain about poor communication. The presence (or absence) of reviews is itself a source of information. A contractor with few to no reviews is either inexperienced, or hasn’t inspired customers to sing their praises. 

3-Bid Rule Alternative #3: Does the bid show the right experience?

Instead of the 3-bid rule, ask: Does the contractor have experience with my sort of project? An ounce of references is worth a pound of bids. Ask your contractor for the information of previous customers with similar projects. It’s a good sign if a contractor is comfortable giving you this information, and a better sign if previous customers are happy. 

It’s also advisable to make sure your contractor is licensed and insured. Since licensed contractors have to be insured in Maryland, it’s an easy check. In Maryland, you can check by last name or company name here.

The Last 3-Bid Rule Alternative: The 1 Thing You Should Know

These alternative questions are in service of a greater recognition: there has to be a “stop looking” point, because you could look forever if you let yourself. The 3-bid rule (or a rule with any number of bids) fails to acknowledge this fish-or-cut-bait reality. Alternatively, when you focus on finding a good fit with a solid contractor, starting on a journey with them will feel natural. 

Now that you know how to look for a good fit in a contractor, you might be interested in what makes for a bad fit. If you want to know whether we’re the right fit for you, give us a call at 240-266-5900, or contact us here

Phil Parsons

Phil Parsons is an owner at KP Contracting with 20-years’ experience in custom remodeling and the development of outdoor living spaces that bring friends and family together. He is a degreed engineer, and his work has been featured on HGTV.