CSLB Contractor's Law & Business Practice Exam

When a homeowner feels a contractor's bid is too high, what is the advised course of action for the contractor?

1. Lower the bid without negotiation.

2. Negotiate to reduce the scope by eliminating some extra items.

3. Refuse to change the bid.

4. Offer additional services for the same price.

The correct answer is: Negotiate to reduce the scope by eliminating some extra items.

Negotiating to reduce the scope by eliminating some extra items is a strategic approach for a contractor faced with a homeowner who believes their bid is too high. This method allows for a compromise that can satisfy both parties. By discussing and identifying non-essential components of the project, the contractor can potentially lower the overall cost while still providing value to the homeowner. It demonstrates flexibility and a willingness to work with the client, which can help maintain a positive relationship and possibly secure the job. Adjusting the bid without negotiation could undermine the perceived value of the contractor's work, potentially leading to a habit of undervaluing services. Refusing to change the bid outright may alienate the client, as it shows a lack of willingness to engage in dialogue and find solutions. Additionally, offering extra services for the same price may further justify the original bid rather than address the homeowner's concern about cost, which might not lead to a resolution satisfactory for the homeowner. Thus, negotiating the scope allows for meeting the homeowner’s budgetary constraints while still aiming to complete the project.