Hiring a Contractor
You have three bids and they are $80,000 apart. Now what?
Comparing the totals is the one thing you should do last. Until the three documents describe the same project, the totals are not comparable numbers.
Do not start with the totals. Three bids on the same project are almost never bids on the same scope — and a cheaper bid is usually a smaller bid rather than a better price for identical work. Normalise first: list every line that appears in any of the three, mark which bids carry it, and price the gaps. Most of the spread lives in eight recurring items, and once they are matched up the remaining difference is the real price difference — which is usually far smaller than the headline gap.
Why the totals are the last thing to look at
A bid is two things at once: a price, and a description of what is being priced. When the descriptions differ, the prices are not comparable, and comparing them anyway is how homeowners choose the bid with the most missing from it.
This is not usually anybody being dishonest. Three builders walked your house, formed three different mental pictures of the job, and wrote down the picture each of them had. The gaps between those pictures are where your money is.
Stop asking “why is this one more expensive?” and start asking “what does this one include that the others do not?” The second question has a checkable answer. The first one only ever produces a sales pitch.
The eight items that account for most of the gap
| Item | What to ask each bidder |
|---|---|
| Allowances | Which finishes are real selections and which are placeholder numbers? An allowance set low makes a total look good and becomes a change order later. Ask what each allowance actually buys. |
| Electrical service and panel | Has anyone done a load calculation? A panel upgrade runs $7,000–$10,000 and is triggered by new load on an unverified panel. Found before demo it is a line item; found after demo it is a stopped job. |
| Structural engineering and plans | Who is producing the stamped set including Title 24, and is that cost inside the bid or waiting outside it? |
| Permits and fees | Carried as a pass-through line, or excluded entirely? These do not scale with job size, so they are easy to leave out and expensive to discover. |
| Fire sprinklers (on an ADU) | Did they apply Gov. Code §66314(d)(12)? If one bid carries a system and another does not, the two builders answered a legal question differently. |
| Demolition, haul-off and disposal | Including construction and demolition recycling where the city requires it. This is a real line and it is frequently invisible. |
| Subcontracted trades | Fixed sub quotes, or estimates? A sub who has not walked the job has not priced it, and that number will move. |
| Exclusions | Read this section first, before the scope. It is the most informative page in any proposal and the one most people skip. |
How to normalise three bids in an afternoon
Build one column per bid and one row per line item
Take every line that appears in any of the three and give it a row. Tick which bids carry it. The empty cells are the entire exercise.
Price the empty cells
Go back to the bidder who is missing an item and ask what it would add. Not as a negotiation — you are completing their document so it can be compared.
Line up the allowances against each other
Two bids can both say “tile allowance” and mean numbers that are far apart. Convert them to what they actually buy before you compare them.
Read all three exclusions sections side by side
This is where the differences in how carefully each builder looked at your house become visible.
Only now, compare the adjusted totals
If the spread has collapsed, the cheap bid was a smaller bid. If a real gap survives normalisation, that is a genuine price difference and it is worth asking each of them to explain it.
Two things that are not price differences
The deposit. California caps the down payment on a home improvement contract at $1,000. A bid asking for 30% or half up front is not offering better terms; it is asking for something the law does not allow, and it usually says more about that builder's cash position than about your job.
The proposal itself. A detailed proposal costs the builder real hours before any work is sold. A one-page number costs almost nothing. That difference is not overhead you are being charged for — it is the first visible evidence of how the job will be run, and it is available to you for free, right now, in the documents you are already holding.
What a bid that survives this looks like
Scope written by trade rather than as a paragraph. Allowances named with what they buy. Exclusions stated plainly rather than implied by omission. Permits and engineering shown as their own lines. A payment schedule tied to completed, verifiable stages. And the known risk items — the panel, the sprinklers, the soils — raised before you sign rather than discovered after demolition.
We price this way because the alternative is a conversation about a change order at the worst possible moment for trust. It is also why our number is sometimes not the lowest one on your table. We would rather be the bid that still says the same thing in month three.
Common questions
Why are contractor bids so different for the same project?
Should I take the lowest contractor bid?
What should I read first in a construction proposal?
Is a large deposit ever a sign of a better deal?
What if one bid includes something the others do not?
Where to go next
Written by the team at Elusive Construction, a licensed California general contractor (B #1112902) building in Santa Clara and San Mateo counties. General information about how residential construction works — not legal advice. For your specific contract, talk to an attorney.
Also Worth Reading
The rest of what we publish
Cost guides
What an ADU, an addition, a kitchen or a whole house actually costs here, and what moves each number.
Our own projects
Two jobs written up start to finish, including what we found once the walls were open.
Paying for it
Renovation lenders we work with. We take no referral fee, and we never quote you a rate.
Where we build
Sixteen cities across two counties, and what genuinely changes at each city line.
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