Why the lowest number on the page may not be the lowest final cost
A homeowner receives three quotes for a new roof.
The first is $18,500. The second is $23,400. The third is $25,100.
The $18,500 quote appears to be the obvious choice. It is almost $5,000 below the next contractor and more than $6,000 below the highest bid.
But what, exactly, does the $18,500 include?
Consider this hypothetical example.
The quote covers removal of the existing shingles and installation of a new roof. It says damaged decking will be replaced “as needed.” It says “standard materials” will be used. Additional work will be handled through change orders.
The homeowner assumes permits, disposal, flashing, ventilation, damaged decking, cleanup, and all required labor are included.
They are not.
After work begins, the following costs are added:
Damaged roof decking: $3,600
Permits and inspections: $700
Debris removal and disposal: $1,200
Flashing and ventilation upgrades: $2,100
Additional labor and change orders: $4,900
The original $18,500 quote becomes a $31,000 project.
The contractor may not have changed the original agreement. The homeowner may simply have assumed the quote included work and materials it never specifically promised.
The numbers in this example are hypothetical. The questions they raise are not.
The Federal Trade Commission advises homeowners to obtain written estimates that describe the work, materials, completion date, and price. It also warns consumers not to automatically choose the lowest bidder.
Before signing a five-figure contractor quote, homeowners should examine these seven areas.
1. The exact scope of work
A total price is not a complete scope. The quote should identify what the contractor will remove, repair, replace, install, finish, clean, and inspect.
Phrases such as “complete renovation,” “roof replacement,” or “labor and materials included” may sound comprehensive, but they do not define the work in enough detail to compare one proposal with another.
Ask: What work is specifically included? What work is specifically excluded? What responsibilities belong to the homeowner? What conditions could require additional work?
Two contractors may be pricing entirely different projects while using similar descriptions.
2. The materials being quoted
“Standard materials” can mean almost anything. A quote should identify important materials by manufacturer, product line, model, grade, size, finish, quantity, or other relevant specification.
For a roofing project, that may include shingles, underlayment, flashing, ventilation, fasteners, decking, and protective membranes. For a kitchen, it may include cabinet construction, countertop material, hardware, flooring, appliances, fixtures, and finishes.
When the materials are not defined, the homeowner cannot determine whether two contractors are quoting comparable quality.
3. Allowances and selections
An allowance is a budgeted amount for an item that has not been finally selected. Suppose a bathroom quote includes a $1,500 tile allowance. If the homeowner later chooses tile costing $3,200, the project price may increase by more than the $1,700 difference once additional labor, delivery, waste, or installation requirements are added.
Every allowance should state: the dollar amount, what it covers, whether labor is included, how overages are calculated, and what happens if the selected item costs less.
A low allowance can make the original quote look more attractive while pushing significant costs into the future.
4. Hidden conditions and unit pricing
Contractors cannot always see what is behind a wall, beneath a floor, or under an existing roof. That does not mean the pricing for hidden conditions must remain completely undefined.
Ask the contractor to identify potential additional work and provide unit prices where possible: cost per sheet of damaged decking, hourly rate for additional labor, cost per square foot of subfloor replacement, cost per linear foot of damaged framing, markup applied to additional materials, and charges for mold, water, electrical, plumbing, or structural discoveries.
“As needed” tells the homeowner when work may be added. It does not tell the homeowner what that work may cost.
5. Permits, inspections, demolition, and disposal
These responsibilities should not be assumed. The quote should clarify who obtains permits, who pays permit and inspection fees, whether demolition and disposal are included, who removes old materials, how the property will be protected, whether daily and final cleanup are included, and whether landscaping, driveways, floors, and furnishings will be protected.
A contractor may consider these separate charges. A homeowner may assume they are part of the project price. The written quote should settle the issue before work begins.
6. The change-order process
A change order modifies the original project scope or price. The quote or contract should explain who may authorize a change, whether approval must be in writing, how labor and materials are priced, whether the contractor adds a markup, how the change affects the completion date, and when additional payment becomes due.
A homeowner should not discover after the work is completed that a conversation at the job site was treated as approval for thousands of dollars in additional work. No change should proceed without a clear description, price, and written authorization.
7. Payments, schedule, warranty, and project closeout
The payment schedule should be connected to clearly defined milestones. Before signing, verify the required deposit, when progress payments become due, what must be completed before each payment, the expected start and completion dates, what could extend the schedule, the labor and manufacturer warranties, who registers warranties, and whether final inspections and lien releases are required.
The National Association of Home Builders recommends using a complete and clearly written contract when hiring a builder or remodeler.
Compare promises, not just prices
The lowest quote may ultimately be the best choice. It may also be lower because it includes fewer materials, fewer responsibilities, smaller allowances, more exclusions, or greater exposure to additional charges.
Homeowners do not need to become contractors, attorneys, or construction experts. They do need to understand what they are being asked to approve.
Before choosing a contractor, compare: scope against scope, material against material, allowance against allowance, exclusion against exclusion, warranty against warranty, and potential additional cost against potential additional cost.
A five-figure home project deserves more than a glance at the number on the final page. It deserves a complete understanding of what that number actually buys.