How to Read a Contractor’s Bid (and Spot What the Cheap One Left Out)

By Jimmy Hall · Texas homeowner, not a contractor · Last reviewed September 2026 · How we research

Three bids come back for the same job. One is $9,400, one is $12,800, one is $18,000. Everyone tells you to get three quotes and nobody tells you what to do when they arrive looking nothing like each other.

Here is the thing most homeowners never get told: the spread usually is not markup. It is scope. The three contractors are not pricing the same job, because nobody told them exactly what the job was. The cheap one worked out what it could leave out.

This is how to read the page in front of you.

The rule that makes everything else work

You cannot compare bids on price until you have made them price the same thing.

That sounds obvious and almost nobody does it. The normal process is: call three companies, each one walks the house, each one decides independently what the job includes, each one writes a number. You then compare three different jobs and pick the smallest number, which means you have systematically selected for whoever left out the most.

The fix is to write the specification yourself, before anyone quotes. It does not need to be technical. It needs to be specific:

• AC: “Price a 3-ton, 16 SEER2 system. Include a Manual J load calculation. Price duct sealing separately as a line item.”
• Windows: “U-factor 0.28 or better, SHGC 0.23 or better, on every window. Give me the NFRC label numbers.”
• Roof: “Architectural shingle, full tear-off to deck, new underlayment, all flashing replaced not reused, decking replacement priced per sheet.”
• Fence: “Six-foot cedar, steel posts, post depth stated, concrete footing stated.”
• Driveway: “Five inches minimum, rebar not mesh, base prep described.”

Send the same paragraph to all three. Now the numbers mean something.

What a real bid has on it

A bid you can actually evaluate contains, at minimum:

• Scope in sentences, not nouns. “Roof” is not a scope. “Tear off existing shingles to deck, inspect and replace damaged decking at $X per sheet, install synthetic underlayment, replace all pipe boots and step flashing” is a scope.
• Materials named by brand, line and specification. Not “quality shingles.”
• What is excluded. Good contractors write this down. It is a sign of confidence, not weasel wording.
• Permit and inspection as their own line, with who pulls it stated.
• Unit prices for the unknowns. Rotten decking, a cracked drain line under the slab, unexpected electrical. You want a per-unit number agreed in advance, not a phone call mid-job.
• Payment schedule tied to milestones, not dates.
• Warranty, split into two: the manufacturer’s on the material and the contractor’s on the labour. These are different lengths and the second one is only as good as the company.
• Licence number where the trade is licensed — plumbing, electrical, HVAC, irrigation. You can verify it online in about a minute.

Where the cheap bid actually saved its money

Across the jobs we cost out on this site, the same handful of omissions account for most of the gap between a low bid and a real one.

The permit

A bid with no permit line is often a bid with no permit. That is not a saving, it is a deferred problem — failed inspection, tear-out, and an awkward line on your seller’s disclosure later. Worth reading our piece on what Texas actually requires a licence and a permit for, because a state licensing exemption is not a permit exemption.

Code items on electrical work

Texas moved to the 2026 National Electrical Code on September 1, 2026. Replacing service equipment on a house now forces a readily accessible outdoor disconnect with compliant labelling, and the utility has to disconnect and reconnect around the inspection. A bid that omits the disconnect, the surge protection or the utility coordination will always look cheaper than one that includes them. See the panel upgrade guide. Whether your city is enforcing the 2023 or the 2026 edition, and exactly when the disconnect is triggered: do you need an outdoor emergency disconnect in Texas?

The thing under the thing

Decking under shingles. Fascia under gutters. Subfloor under tile. Ductwork under a new air conditioner. The cheap bid prices the visible layer and treats everything beneath it as a change order. Ask directly: what happens if you open it up and the deck is soft? The answer should already be a number on the page.

Measured quantities

On siding especially, a bid built from your house’s square footage rather than a measured takeoff is a guess. Guesses drift by thousands. Ask for the takeoff.

Disposal, protection and clean-up

Dumpster, landscape protection, magnet sweep for nails. Small money individually, and a common gap.

Five questions that expose the difference fast

• “What is not included in this price?” The most useful question in the whole process. A contractor who has thought about the job answers immediately.
• “Who pulls the permit, and is it in this number?”
• “What happens if you find rot or damage once you open it up, and what does that cost per unit?”
• “Is the crew yours or subcontracted, and who carries the workers’ comp?” Texas does not require most private employers to carry workers’ compensation. Ask whether they do, and ask for the certificate.
• “Can I have two addresses from jobs like this one you finished more than two years ago?” Recent references are easy. Two-year-old ones tell you whether the work held.

If it is an insurance job, three more things

Storm work has its own rules in Texas, and they are not optional.

• Nobody may cover your deductible. Business and Commerce Code §27.02 makes it an offence for a contractor to pay, waive, absorb or rebate it, and any contract of $1,000 or more expected to be paid from insurance proceeds must carry a specific notice in 12-point bold. If someone offers, the quote was inflated by at least that amount.
• Your roofer may not adjust your claim. Insurance Code §4102.163 bars a contractor from acting as a public adjuster on a property they are also working on. “We’ll handle the insurance company for you” describes something they are not allowed to do.
• Know your number before the adjuster arrives. Your wind and hail deductible is a percentage of your dwelling limit, and if your roof has aged into actual cash value, depreciation comes off before the deductible does. The deductible calculator will tell you what the claim really pays — sometimes nothing — before you commit to anything.

Do not automatically take the middle one

The received wisdom is to throw out the high and the low and take the middle. That is a way of avoiding the work rather than doing it.

Once all three are pricing the same written scope, the spread collapses, and what is left is real: crew quality, schedule, warranty, whether they answered your questions straight. Sometimes the highest bid is the only complete one. Sometimes the cheapest is genuinely a smaller outfit with lower overhead doing identical work.

You cannot tell which until they are quoting the same job. That is the whole of it.

Our cost guides have Texas-specific ranges for fourteen common jobs, each with a calculator, so you can sanity-check a number before the conversation rather than after it.