A good estimate is a document you can read, not a number you have to accept. Once you know the parts, you can compare bids fairly and spot the gaps before they become arguments. Here's what to look for.
Line items
The body of the estimate is a list of work items, each with a quantity and a price. This is where the real information lives. Scan it for scope you expected to see — and scope you didn't. A missing line is a missing cost that will reappear later.
Allowances
An allowance is a placeholder dollar amount for something you haven't picked yet — tile, fixtures, appliances. It keeps the estimate moving, but it's a guess by design. If the allowances are low, the bottom line looks better than the project really is. Ask what each allowance assumes.
Contingency
Contingency is money set aside for the unknowns that every project has. It is not padding and it is not profit — it's an honest acknowledgment that you can't see inside the walls yet. An estimate with zero contingency on a remodel is optimistic, not cheap.
Markup and exclusions
- Markup — the overhead and profit added on top of cost. Every legitimate estimate has it; the question is whether it's stated.
- Exclusions — what the estimate deliberately leaves out. Read these as carefully as the inclusions.
- Assumptions — the conditions the price depends on. If they change, the price changes.
When you compare two bids, you're really comparing scope and assumptions, not just totals. Two numbers that look far apart often converge once you line up what each one actually includes.
Don't compare the bottom lines. Compare the line items. The cheapest total is meaningless if it's missing half the job.