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You’ve decided on the furnace size and the features and add-ons you want. You have your quotes — remember you need to get a minimum of three — but, wait, there’s a big price range among them.
That’s weird because you gave each company the same information. So why the big differences in pricing?
Here’s the thing, not all quotes are created equal. Before you choose one, you need to make sure you are comparing apples to apples.
To help you out, let’s take a deep dive into the quotes.
First, you need to make sure you are looking at quotes and not estimates.
There is a difference. An estimate is what the contractor thinks the job will cost based on their expertise and experience. The job could be more or less expensive.
A quote is based on 一 or should be — a detailed inspection of what is needed and should include a specific breakdown of everything that needs to be completed, including the new furnace, parts, and labour. Also, once a quote is signed in Alberta it becomes a legally binding contract. Please check to see if the same is true in your area.
A quote should be:
It should contain two types of information:
Here’s a contract checklist to help you make sure you sign a contract that gets you what you need, outlines all the processes (including work changes and payments), and protects you. You don’t want any nasty surprises.
If you don’t understand something in the quote, ask the contractor for clarification before you agree to or sign it.
Remember, in many jurisdictions, once you sign the quote, it becomes a legally binding contract.
This is why you want the contractor to include all the details.
The province of Alberta recommends entering N/A (non-applicable) in any blank spaces on the quote and crossing out and initialing anything in the quote you don’t agree to. Don’t forget to get the contractor to initial these changes as well.
Do this before you sign it!
This is the legal process in Alberta. Please check what constitutes a legally binding contract and if these methods of contract amendments are legal where you live.
Now, let’s look at the possible reasons for the differences between your quotes.
Reasons for Low Quotes:
Reasons for High Quotes:
Don’t be afraid to have the contractor walk you through their quote and explain why it is higher or lower than the others. If they aren’t willing to do this, are rude while explaining it, or can’t give you the reasoning behind their recommendations, find another heating company.
One of the best ways to make sure the quotes are similar is to do your research.
Ask the contractors a lot of questions before getting to the quoting stage and know what type of furnace, features, and add-ons you want and tell the contractors. This will help ensure all the contractors are quoting on the same thing.
It is finally time to evaluate your quotes and choose the one that gives you the best value. Everybody has different priorities, so only you can determine which one is best for you.
The overall price is just one consideration, your priorities will determine the others.
And don’t forget your peace of mind.
This is an often overlooked consideration when evaluating quotes. If the contractor with the cheapest quote was difficult to deal with, the hassle of working with them may not be worth the money you are saving. You need to trust and have confidence in your contractor.
It is now time to compare quotes.
Go through each quote line item by line item and see exactly what each quote covers and more importantly what they don’t cover. You will probably find the more expensive quotes contain more line items than the others.
Now you need to ask yourself why the difference in line items? Remember, you can always ask the contractor for an explanation.
One common reason for a price difference between quotes is each contractor has quoted a different sized furnace with different features, add-ons, and price points. For example, one quote might be for a single-stage furnace and another for a modulating furnace which is generally a more expensive furnace than a single-stage model.
Each quote should contain the same size, similar quality furnace with the same AFUE, features, and add-ons. However, contractors won’t quote the same brand.
There will be price differences between brands, but the price should be fairly similar if it’s the same type of system.
Warranties and Guarantees
Better warranties and guarantees could be the source of a higher quote. In this case, the higher cost comes with a higher value.
Look at how much fine print is in the warranty. A lot of fine print could mean the more the warranty doesn’t cover.
Sales and Rebates
A sale or rebate will impact the final quoted price.
Sometimes called the hourly rate. Not all companies have the same rates. Reasons for a higher labour rate include:
Often you get what you pay for. However, if none of the above reasons account for the higher rates, it could be a red flag.
Permit and Inspection Fees
Different regions have different requirements and fees and it’s your responsibility to know what they are.
Scope of the Job
Many companies do not take the time to thoroughly inspect your job requirements and will quote a basic install. As I have said several times, there is no such thing as a basic install.
If one quote includes new venting, ductwork, cement pad, or other work and the others don’t, you need to investigate. You need to ask:
If work is needed and not quoted, you will end up paying for it over and above the price in the original quote. You might even spend more than what was quoted by the more expensive contractors, who included the work in the first place.
Are there mistakes in the quote? We are only human, and so is your contractor. They may have switched some numbers around or missed something you wanted, let them know and give them a chance to fix it.
When comparing the quotes, keep in mind the information we went over in Section 5 – How to Choose a Heating Contractor.
If the company doesn’t have the proper license, adequate insurance, integrity, or lacks in any of the other factors discussed, it doesn’t matter how good their quote is, it’s too big a risk to work with them. Your peace of mind is too important.
This step is closely related to step 3.
Think about how long the contractor or their comfort advisor spent asking you questions and inspecting your current furnace setup. Also, did they do a proper heat load analysis of your home? This must be done to ensure you get the correct sized furnace.
The more thorough they are in identifying your specific needs, the more accurate the quote will be and you will know they care about providing you with the best system for your situation.
Finally, evaluate the quotes through the lens of your priorities.
If you need your new furnace installed within the next week and only the contractor with the most expensive quote can accommodate you, you might be willing to pay the extra money.
Also, if all things are equal and you really like a specific brand of furnace, this will figure into your decision. Or, if a priority is your carbon footprint, the furnace’s environmental impact will be included in your decision.