Compare contractor bids line by line, not just by total price. Get at least three written quotes and use a scope-by-scope table to spot the outlier.
Key takeaways
- Get at least three written bids built from the same scope of work, per FTC and BBB guidance—fewer and you can't tell what's normal for your project.
- Compare bids line by line (materials, labor, permits, timeline, payment schedule, warranty), not just the bottom-line total.
- The FTC says don't automatically choose the lowest bidder—ask for an explanation if there's a big spread between quotes.
- A bid that's noticeably below the other two is a question to ask, not a discount to grab: it often means a narrower scope, lower-grade materials, or corners cut on labor.
- Never pay the full project cost up front—the FTC says some states cap deposit amounts by law, so a large upfront ask before any material is ordered is worth checking against your state's rule.
- Reject any bid that isn't itemized in writing—a verbal number or a single lump sum with no breakdown can't be compared to anything.
Compare contractor bids by lining up each one’s scope, materials, labor, permits, timeline, payment schedule, and warranty side by side—not just the bottom-line total. The FTC’s guidance on avoiding home improvement scams is explicit on this: get multiple written estimates, don’t automatically choose the lowest bidder, and ask for an explanation if there’s a big difference among the numbers. A bid is only comparable to another bid when both describe the same job. Two quotes for “$8,000” and “$11,000” tell you nothing on their own—one of them might be missing a permit fee, a materials upgrade, or an entire phase of the work.
Get at least three bids, built from the same scope
Both the FTC and the Better Business Bureau point to the same number: at least three written estimates. Fewer than that and you have no way to tell whether a price is typical for the job or an outlier in either direction. The BBB is specific about why the count matters less than the setup: bids only mean something when you “ensure your bids consider the same set of criteria to get a fair side-by-side snapshot of the variances.”
In practice, that means giving every contractor the identical starting point before they price anything:
- The same written scope of work (not a verbal description that changes slightly each time you repeat it)
- The same materials list, or explicit permission for each contractor to spec their own and note it
- The same site access and site conditions (square footage, existing damage, what’s being removed vs. reused)
- The same timeline expectations, so no one’s quote is artificially fast because they’re skipping a step
If a contractor asks fewer questions than the others before pricing the job, that is often a sign their estimate is a rough guess rather than a firm bid.
What every itemized bid should include
A number with no breakdown is not a bid you can compare to anything. The FTC says a written estimate should include “a description of the work to be done, materials, completion date, and the price.” For contractor comparison specifically, push each quote to break out these pieces separately:
| Line item | What to look for |
|---|---|
| Materials, by brand and model | Specific products, not “standard grade” — a generic allowance can hide a big cost gap |
| Labor | Priced separately from materials so you can see where the money actually goes |
| Permit costs | Named as a line item, and clear on who pulls the permit — the contractor or you |
| Timeline | Start date, estimated completion date, and what could push it (weather, backorders) |
| Payment schedule | Deposit amount, milestone payments, and the final payment amount and trigger |
| Warranty on workmanship | Length of coverage on labor, separate from the manufacturer’s warranty on materials |
If a contractor won’t put all six of these in writing, that alone is reason to weight their bid down relative to one that does.
A simple comparison table you can use
Copy this structure into a spreadsheet or notebook and fill in each contractor’s numbers in its own column. Seeing the same six rows across three bids makes the outlier obvious in a way that three separate PDFs never do.
| Line item | Contractor A | Contractor B | Contractor C |
|---|---|---|---|
| Total price | |||
| Materials (brand/model) | |||
| Labor cost | |||
| Permit cost, and who pulls it | |||
| Start date / completion date | |||
| Payment schedule (deposit %, milestones, final) | |||
| Workmanship warranty (length) | |||
| Anything explicitly excluded |
That last row matters as much as the price rows. A bid that’s silent on what’s excluded can turn into a change order later — ask directly what each contractor assumed you’d handle yourself (disposal, permit filing, fixture purchase) before you sign anything.
Why the lowest bid isn’t automatically the best one
The FTC’s advice is direct: don’t automatically choose the lowest bidder, and ask for an explanation if there’s a big spread between estimates. The BBB adds the mechanism — “if one offer is significantly lower than the others, the contractor may be cutting corners or may not understand your work requirements,” and notes that a business has to make a profit to stay in business, so an unusually low number has to come from somewhere: cheaper materials, less experienced labor, a shortcut on prep work, or a scope that quietly excludes something the other two bids included.
That doesn’t mean the lowest bid is always wrong. It means it’s the one bid that needs the most questions before you sign:
- What specific materials are priced in this number, by brand and model?
- Is site prep, cleanup, and debris disposal included, or billed separately?
- Does this include the same permit and inspection scope as the other bids?
- Why is your number lower than the other two bids for the same written scope?
A contractor who can answer all four clearly may simply run a leaner shop. One who gets vague or defensive is telling you something too.
Red flags in the bid itself
Some warning signs show up in the document before you ever meet the crew:
| Red flag | Why it matters |
|---|---|
| Vague scope (“remodel bathroom” with no line items) | Nothing to hold the contractor to later, and nothing to compare to other bids |
| No written itemization, verbal number only | Can’t be compared, can’t be enforced if the final bill is higher |
| A bid dramatically below the other two for the same scope | Per BBB, often means cut corners or a misunderstood scope — ask before you accept |
| Requests full or majority payment up front | FTC guidance: don’t pay the full amount up front—some states cap the legal down payment by law |
| No mention of permits on a job that clearly needs one | Either the permit cost is hidden in the total or it’s being skipped — both are problems |
| Blank spaces left in the written estimate or contract | The FTC specifically warns to make sure all blank spaces are filled in before you sign |
When to call in more than a comparison
| Situation | Why it’s not a DIY spreadsheet decision |
|---|---|
| Structural work (load-bearing walls, foundation, additions) | Get an engineer’s or architect’s review of the scope before bids come in, so every contractor is pricing the same plan |
| A bid that requires financing through the contractor | Shop and compare loan terms independently first — the FTC flags contractor-arranged financing as a common scam vector |
| Large gaps in licensing or insurance between bidders | Verify license and insurance status with your state or county directly, not from what the bid claims |
| A dispute after work starts over what a bid included | Put it in writing to the contractor first, then escalate to your state attorney general or local consumer protection office if unresolved |
Keep every bid, not just the winner
Hold onto the losing bids along with the signed contract. If a dispute comes up mid-project about what was agreed to, the rejected bids show what “the same scope of work” looked like when priced by other contractors — useful context even though they’re not the contract you signed.
Related guides
Frequently asked questions
How many contractor bids should I get before choosing one?
At least three, according to both the Better Business Bureau and FTC consumer guidance. Three written estimates built from the same project description give you enough data to see which price is typical and which is an outlier, without dragging the process out by chasing five or six quotes.
Is the lowest bid usually the best deal?
Not automatically. The FTC’s home improvement scam guidance specifically warns against automatically choosing the lowest bidder and recommends asking for an explanation if there’s a big difference among estimates. A bid well below the others usually means a narrower scope, cheaper materials, or labor being cut somewhere, not simply a better price for the same job.
What should be itemized in a contractor’s written estimate?
A description of the work to be done, the specific materials and brands, labor cost, an estimated start and completion date, and the total price, per the FTC. For it to be truly comparable to other bids, also ask for the payment schedule, who’s pulling any required permits, and what workmanship warranty is included.
How much of a deposit is normal for a contractor to ask for?
Never pay the full project cost up front, and treat one-third of the total as a practical ceiling for a deposit. Some states cap contractor down payments by law, so check with your state or local consumer protection office for the specific limit where you live, and never make the final payment until the work is finished and you’re satisfied with it.
What if two contractor bids describe the project completely differently?
That’s a sign to go back to both contractors before comparing price at all. Give every contractor the identical scope, materials list, and site conditions up front, and if their bids still don’t line up item for item, ask each one directly what they included and excluded so you’re pricing the same job, not two different ones.