Three bids land in your inbox and the prices are wildly different. Here is how a licensed GC reads them - and what those gaps are actually telling you.
Why Are My Contractor Bids So Different From Each Other?
Three bids. Three wildly different numbers. This is the most common thing homeowners ask me about, and the answer is almost never what they expect.
Bids vary because contractors are not quoting the same job. One contractor priced premium materials. Another assumed builder-grade finishes. A third bid low to get in the door and plans to make it up on change orders. You are not comparing apples to apples - you are comparing apples to a salad.
As a licensed GC who has completed hundreds of remodels, I can tell you that legitimate bids from qualified contractors on the same scope of work should land within 10-15% of each other. If you have three bids and one is 30% below the other two, that is not a deal. That is either an incomplete scope or a contractor who will make up the difference after you sign.
Based on 2026 construction cost data in the Bay Area, a mid-range kitchen remodel runs between $95,000 and $175,000. If someone bids your kitchen at $52,000 and everyone else is at $130,000, something is missing from their quote. Find out what before you get excited. For a full breakdown of what drives those numbers, read my kitchen remodel cost guide.
What Should Every Contractor Bid Actually Include?
A real bid is not a number on a napkin. It is a document. If it does not have these things, you do not have a bid - you have a guess.
Every bid should include:
- A detailed scope of work - line by line, room by room
- Material specifications (brand, model, grade) or stated allowances
- Labor costs broken out by trade
- Permit and inspection fees (or a note that you are responsible)
- Payment schedule tied to project milestones (a draw schedule)
- Exclusions - what is specifically NOT included
- Warranty terms on labor and materials
- Timeline with start date and substantial completion date
In my experience building homes across Silicon Valley since 2017, the exclusions section is where most homeowners get blindsided. A contractor who excludes electrical upgrades, haul-away, or structural work from their kitchen bid is setting up a $15,000-$40,000 change order conversation the moment demo begins.
Ask every contractor to give you their bid in writing with itemized line items. If they resist or say they work from a lump sum only, that is a red flag.
How Do I Know If the Lowest Bid Is a Trap?
The lowest bid is a trap about 70% of the time. Here is how to know which 30% is actually a deal.
From working with homeowners on projects ranging from $50K to $2M+, I have seen the lowball pattern play out hundreds of times. The contractor comes in 25-35% below market, wins the job, and then hits the homeowner with change orders every two weeks. By the end, the project costs more than the highest original bid - and the relationship is usually a disaster by then.
Ask the low bidder these three questions directly:
- What specific materials are you including for this price?
- What is excluded from this bid?
- Can you show me a completed project at a similar scope and budget?
If they cannot give you clear answers to all three, walk away. Saving $20,000 on paper is not worth a 6-month nightmare and a mechanic's lien on your property.
As a contractor, I can tell you the real reason some bids come in low: the contractor is hungry, under-capitalized, or planning to use unlicensed labor on your job. None of those are outcomes you want.
One more number to know: California law caps upfront deposits at 10% of the total contract or $1,000, whichever is less. If a contractor asks for a 30-50% deposit before work starts, that is illegal under California Business and Professions Code Section 7159 - and a major warning sign.
Fixed-Price vs. Cost-Plus Contract: Which Should My Bid Be?
The type of contract behind the bid matters as much as the number itself. These two structures expose you to completely different levels of risk.
| Contract Type | How It Works | Best For | Your Risk |
|---|---|---|---|
| Fixed-Price (Lump Sum) | One agreed price for a defined scope. Changes require a signed change order. | Well-defined remodels with clear plans and specs | Low - contractor absorbs cost overruns (if scope does not change) |
| Cost-Plus | You pay actual costs (labor + materials) plus a contractor markup, typically 15-25% | Complex custom builds, historic remodels, gut renovations with unknown conditions | High - you pay whatever it costs |
| Time and Materials (T&M) | Hourly labor rate plus material receipts. No fixed price. | Small repairs, undefined work, emergency projects | Very High - no ceiling on final cost |
For most homeowners doing a kitchen remodel, bathroom renovation, or home addition, a fixed-price contract is the safest structure. It puts the cost risk on the contractor, not you.
Based on typical project data from Bay Area contractors, cost-plus projects run 18-22% over initial estimates on average. That is not because contractors are dishonest - it is because unknowns are expensive. If someone is bidding cost-plus, make sure you set a not-to-exceed cap in writing before you sign anything.
If your GC is using a platform like Opsite, you can track every change order and draw in real time through a client portal - so cost-plus does not have to feel like a black box.
How Do I Actually Compare Three Bids Side by Side?
Do not compare total numbers. Compare line items. This is the only way to catch what is missing.
Build a simple comparison sheet with every scope item down the left side and a column for each contractor across the top. Fill in what each contractor included - and more importantly, what they left blank.
Here is what to look for in each category:
- Demolition and haul-away: This is often excluded. Demo on a kitchen averages $3,500-$8,000 in the Bay Area. If it is not in the bid, add it mentally.
- Allowances vs. specified materials: An allowance is a placeholder. A $5,000 tile allowance sounds reasonable until you go shopping and realize the tile you want is $12,000 installed. Demand specs, not allowances, wherever possible.
- Permit fees: Building permits for a kitchen remodel in most Bay Area cities run $2,500-$6,000. If the bid does not include them, ask who pays.
- Subcontractor vs. in-house: Ask which trades the GC self-performs and which they subcontract. A GC who subs everything out has less control over your schedule and budget.
- Contingency: A reputable contractor builds in a 10% contingency. If they say they never go over budget, they are either lying or about to learn something on your job.
Add 15-20% contingency to every bid on your end regardless. Not 10%. Every project hits something - old wiring, rotten subfloor, non-permitted prior work. Budget for it before you start, not after.
What Red Flags Should Make Me Reject a Bid Immediately?
Some bids should not make it to your comparison sheet. These are automatic disqualifiers.
Red flags that mean walk away:
- No CSLB license number on the bid. Go to cslb.ca.gov right now and look up any contractor before you sign anything. Takes 30 seconds. According to CSLB complaint data, unlicensed contractors are responsible for the majority of homeowner fraud cases in California each year.
- Requesting more than 10% upfront or $1,000 - whichever is less. This is a legal violation in California, full stop.
- No physical business address. P.O. boxes do not count.
- No proof of General Liability insurance and Workers Compensation coverage. If a worker gets hurt on your property and your contractor has no workers comp, you can be liable.
- Pressure to sign today or lose the price. Legitimate contractors do not use car-dealership tactics.
- Verbal-only scope with a promise to write it up later. If it is not in writing before you sign, it does not exist.
- No permit pulled. Any structural, electrical, plumbing, or HVAC work requires a building permit. A contractor who says you do not need one for a $150,000 kitchen remodel is wrong or hoping you will not find out.
As a contractor, I can tell you that the best contractors are not desperate. They have booked work. They give you a clear scope, a clean contract, and references you can actually call. If someone is selling hard instead of educating, trust your gut.
For a deep look at what to check before hiring, see my guide on how draw schedules protect homeowners - because how you pay is just as important as what you pay.
Frequently Asked Questions
How many contractor bids should I get?
Get three bids minimum. Not two, not one. Three. With two bids you have no reference point. With one bid you are just accepting whatever they say. Three bids gives you a market reality check and enough data to spot outliers.
Is it OK to show a contractor what the other bids say?
You can share that you have received other bids in the same range, but do not share the actual numbers with contractors who are still bidding. It creates a race to the bottom on price rather than a competition on quality and completeness. After you have chosen your contractor, pricing transparency is fine.
How long does it take to get contractor bids?
Plan for 2-4 weeks to get three complete, written bids for a mid-size remodel. Busy contractors who are worth hiring are usually booked out. If someone can meet you tomorrow and bid you the next day, ask yourself why they have that much availability.
What is an allowance in a contractor bid?
An allowance is a placeholder dollar amount for items not yet specified - fixtures, tile, appliances, cabinets. The risk is yours: if you pick items that cost more than the allowance, you pay the difference. Push for specified products over allowances wherever possible, or negotiate for realistic allowance amounts based on actual market pricing.
Can a contractor change the price after I sign the contract?
On a fixed-price contract, a contractor can only change the price through a signed change order that you approve in writing. Any cost increase must be agreed to before the work happens. If your contractor is adding costs without written change orders you approved, that is a contractual violation.
What should I do if a contractor asks for a large deposit upfront?
California law limits upfront deposits to 10% of the total contract price or $1,000, whichever is less. If a contractor asks for 20%, 30%, or 50% upfront, that is illegal. Do not pay it. A legitimate contractor has the capital to start the job without a large advance from you.
How do I check if a contractor is licensed in California?
Go to cslb.ca.gov and use the license lookup tool. Enter the contractor's name or license number. It takes 30 seconds and shows you their license status, classifications, bond status, and any disciplinary actions. Never hire a contractor without doing this check first.
What is a lien waiver and do I need one?
A lien waiver is a document where a contractor or subcontractor gives up their right to place a mechanic's lien on your property in exchange for payment. Request a conditional lien waiver before each draw payment and an unconditional lien waiver after. Without these, a subcontractor your GC stiffed can put a lien on your home even if you paid your GC in full.
Bar Benbenisty is a licensed General Contractor (CSLB #1103938) and founder of Opsite, an all-in-one construction operations platform built for general contractors.