How to Read a Contractor's Estimate
Three quotes for the same job, thousands apart, and no way to tell why. The difference is almost always in what is not written down.
A number is not a price
A single figure with a project name above it tells you nothing you can act on. An estimate should let you see labor, materials, allowances, and exclusions separately. If you cannot see those four things, you cannot compare it with anything else, and you cannot tell what happens when something changes.
Understand allowances
An allowance is a placeholder for something you have not chosen — tile, fixtures, appliances. It is the contractor saying 'I have assumed this much'. Two quotes can differ by thousands purely because one assumed a higher tile allowance. If the allowance is low, the price looks better and the shortfall arrives later as a change order.
Always ask what each allowance assumes in real terms. 'Tile allowance: $12 per square foot' is a fact you can check. 'Tile allowance included' is not.
Read the exclusions first
This is where the low bid usually explains itself. Common exclusions worth hunting for: permits and filing fees, disposal, appliance installation, painting, electrical upgrades required to meet code, and anything found behind a wall. A quote that excludes permits and disposal is not cheaper, it is less complete.
Compare exclusions before you compare totals. The cheapest quote is often the one that promises the least.
Payment schedules tell you something
A reasonable schedule ties payments to completed stages, not to dates. A deposit to book the calendar and order long-lead materials is normal. A request for a very large sum up front, or for payments on a fixed calendar regardless of progress, is worth questioning.
Change orders should exist
A contractor who says there will never be a change order is either padding the price heavily or planning to have the conversation later. What you want is a clear process: any change is priced and approved in writing before it happens. That protects both sides.
Common questions
Should the lowest quote worry me?
Not automatically — but find out why it is lower. If it is scope or allowances rather than efficiency, the gap will reappear during the project.
What deposit is reasonable?
Enough to secure scheduling and order long-lead materials. Payments after that should follow completed stages.
