A contractor's quote is a contract in disguise. The headline total tells you what someone hopes to charge; the line items tell you what they have actually agreed to do. Read the second part or the first part will surprise you.
We collected estimates from several trades and compared them with the final invoices. The overruns were rarely random. They came from gaps that were visible in the quote from the beginning, if anyone had read closely.
Start with scope, not price
Before comparing totals, check that each quote covers the same work. One may include removing the old units and disposal; another may leave it as a separate charge. One may include painting after plastering; another may not. A cheaper quote that omits half the scope is not cheaper.
Write a one-page scope of work yourself and ask every contractor to price against it. That single step removes most of the ambiguity and makes the comparison honest.
Allowances are placeholders
An allowance is a budget figure for something not yet chosen, such as tiles or a vanity. It looks like a firm number but it is an estimate. If you choose a more expensive tile, the difference is added to the bill. Ask what the allowance assumes, and what happens if you exceed it.
A low allowance is a common way to make a quote look competitive. The real cost only appears when you pick the material. Compare allowances as well as totals, and ask for the unit price per square metre or per item.
Exclusions and "subject to" clauses
Every quote has work it does not include. Common exclusions are permits, asbestos removal, structural repairs, and making good after other trades. These are legitimate, but they need a price attached or a clear statement that they are unknown.
The phrase "subject to site conditions" is reasonable on a renovation and dangerous when it is the only description. Ask for a definition: what conditions, at what cost, and who decides. A contractor who cannot answer is telling you something.
Labour, materials and markup
A good quote separates labour from materials, or at least states the material specification. "Fit new boiler" is not a specification. The model, output rating and flue type should be named, or you cannot compare it with another quote or check the warranty.
Markup on materials is normal and not a scandal. What matters is whether it is disclosed and whether the total is fair for the work. Use a second quote as a sanity check, not as a weapon.
The cheapest quote is the one with the fewest surprises, not the smallest number on page one.
Payment schedule and retention
Never pay the full amount up front. A deposit for materials is normal; staged payments tied to completed milestones are standard on larger jobs. Hold back a retention until the snag list is finished, and put it in writing.
Ask what happens if the work stops, and who owns materials already paid for. On a long project, a written schedule protects both sides. Our change order guide explains how to handle the variations that inevitably appear.
Insurance, licence and warranty
Ask for the licence number and proof of insurance before work starts, and verify them with the issuing body rather than taking a photocopy at face value. Confirm the warranty length for labour and for materials, and whether it transfers if you sell the house.
For any structural or envelope work, a written method statement is worth requesting. Our engineered wood guide shows the kind of specification detail a quote should include when beams or framing are involved.
A five-minute checklist
Does the quote name the materials and models? Does it list what is excluded? Are allowances realistic? Is the payment schedule tied to milestones? Are licence and insurance attached? Does it state who handles permits and waste removal?
If any answer is missing, ask before you sign. A contractor who is organised enough to answer will also be organised enough to build. That is the real signal in a quote, and it is worth more than a small discount.
Key facts
- Compare scope before comparing totals.
- Allowances are placeholders, not fixed prices.
- Exclusions and site-condition clauses hide real cost.
- Tie payments to milestones and hold a retention.
- Verify licence and insurance independently.
The bottom line
Read the whole document, ask about every gap, and get the specification in writing. A clear quote is the cheapest insurance you can buy on a building project.
