Core Guide · Updated March 2026

How to Compare Contractor Bids: The Complete Homeowner Guide

Most homeowners compare bids wrong — they look at the bottom line and pick the middle. Here's how to actually evaluate what you're being sold.

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Why Contractor Bids Vary So Wildly

Getting three bids for a $40,000 deck and seeing quotes of $28,000, $42,000, and $61,000 is normal — and confusing. The price spread doesn't tell you who to hire. You need to understand what's driving the difference.

1.

Different materials

Contractor A quoted Trex Enhance ($5–7/sqft). Contractor B quoted Trex Transcend ($10–15/sqft). That's a $2,000–$4,000 difference on a 400 sqft deck before you count framing.

2.

Scope gaps

The low bid didn't include demo, permit fees, or flashing. Add those back and the "cheap" bid isn't cheap anymore.

3.

Labor market differences

A solo operator with low overhead legitimately bids less than a 10-person crew with insurance, vehicles, and benefits. Both can be quality builders.

4.

Intentional underbidding

Some contractors win jobs with a low number, then recover profit through change orders once you're committed. This is the most dangerous scenario.

5.

Markup variation

Industry standard contractor markup is 15–35% over costs. Some contractors mark up 75%+. The markup is invisible unless you have a line item breakdown.

The 6-Step Bid Comparison Framework

1

Normalize the scope first

Before comparing any dollar figures, make sure every bid covers the same work. Create a scope checklist and mark what each bid includes vs. excludes:

  • Demo / removal of existing structure
  • Permit fees
  • Ledger flashing
  • Footings (depth and diameter)
  • Framing / substructure
  • Decking (specify product and grade)
  • Railing (specify type and linear footage)
  • Stairs (number of sets)
  • Cleanup and debris removal

Any item one bid includes and another excludes must be priced out and added to the lower bid before comparing totals. This is called bid leveling.

2

Compare materials by exact spec — not by name

"Composite decking" is not a spec. "Trex Enhance Basics, Saddle color" is a spec. The difference between entry-level and premium composite on a 400 sqft deck is $3,000–$6,000 in materials alone.

ProductTierMaterial $/sqftInstalled $/sqft (NE)
Trex Enhance BasicsEntry$4.50–$8.50$35–$50
Trex Enhance NaturalsEntry+$5.50–$9.50$38–$55
Trex SelectMid$7–$10$42–$60
Trex TranscendPremium$9–$15$50–$70
Trex Signature (PVC)Ultra$14–$22$60–$80
TimberTech AZEK LandmarkPremium$10–$18$55–$75

Northeast region. Installed cost includes framing, decking, and basic fasteners. Does not include railing or stairs. Source: BidLens regional pricing data, March 2026.

3

Back into the labor rate

If you have a line item breakdown, you can calculate what the contractor is effectively charging per labor hour. Industry standard billing rates for deck contractors:

$45–$65/hr

Low cost markets

$65–$85/hr

Mid cost markets

$85–$120/hr

High cost (NE / CA)

A labor line showing $10/hr is a red flag for unlicensed workers. A labor line showing $200/hr is a red flag for extreme markup. Both are worth flagging.

4

Calculate the markup

Contractor markup = the difference between what it costs them (materials + labor) and what they charge you. Standard range is 15–35%. The formula:

markup% = (total − materials − labor) ÷ (materials + labor) × 100

Example: $42,000 bid, $18,000 materials, $16,000 labor:

($42,000 − $18,000 − $16,000) ÷ ($18,000 + $16,000) × 100 = 23.5% markup ✓ Normal

BidLens calculates this automatically — including flagging markups over 75% (warning) and over 100% (critical).

5

Evaluate payment terms independently

Payment terms are not negotiation fodder — they are a risk signal. Evaluate each contractor's payment schedule as a standalone decision:

  • Milestone-based payments (✓)Payments tied to completed work. Best structure for homeowners.
  • Calendar-based payments (⚠)Paying on a date regardless of progress removes your leverage.
  • More than 33% upfront (⚠)Caution. Ask for justification in writing.
  • More than 50% upfront (✗)Red flag. Significant financial risk before work begins.
6

Check what's missing

The cheapest bid is often cheap because it leaves out things the others include. The most dangerous omissions — the ones that become expensive additions mid-project:

  • Permit feesTypically $150–$600. If not in the bid, you'll pay it separately — or worse, the work is unpermitted.
  • Demo / removalRemoving an old deck costs $1,000–$3,000. If it's not in the bid, clarify who handles it.
  • Ledger flashingA $200 material item. If absent, water infiltrates the house. Required by code.
  • Joist hangers / hardware$300–$600 in hardware. If absent, the framing may not be code-compliant.
  • Fascia boards$500–$1,500 to finish the deck edges. Often left out of lump sum bids.
  • Stair stringers and risersEach set of stairs is $1,500–$4,000. Easy to "forget" in an initial bid.

The 4 Most Common Bid Comparison Mistakes

✗Comparing totals without leveling scope

If Bid A includes demo and Bid B doesn't, Bid B will always look cheaper — until you realize you need to pay for demo separately. Always normalize scope before comparing prices.

✗Picking the middle bid by default

The 'middle bid is safest' heuristic is a myth. The middle bid might be middle because of lower-grade materials, not fair pricing. Evaluate each bid on its own merits.

✗Ignoring payment terms

A 60% upfront payment request on an otherwise reasonable bid is a significant risk factor that changes the calculus. Two bids at $42,000 with payment terms of 20% upfront vs. 60% upfront are not the same bid.

✗Treating vague specs as equivalent

"Composite decking' on Bid A and 'Trex Transcend' on Bid B are not the same line item. Always confirm exact product names and grades before comparing.

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Frequently Asked Questions

How do you compare contractor bids fairly?+
To compare bids fairly: normalize scope first (make sure each bid covers the same work), then compare materials by exact spec, back into labor rates, calculate markup, and evaluate payment terms independently. Never compare bottom-line totals before leveling the scope.
Why are my contractor bids so far apart?+
Wide bid spreads are usually caused by: different materials (entry vs. premium composite is a $4,000+ difference on a 400 sqft deck), scope gaps (one bid includes demo and another doesn't), or intentional underbidding where a contractor plans to recover profit through change orders.
Should I always go with the lowest bid?+
No. The lowest bid is the most likely to result in cost overruns, material substitution, or unpleasant surprises mid-project. Evaluate bids by scope, materials, payment terms, and warranty — then by price. A 10% higher bid with better materials and milestone payments may be the better value.
How many contractor bids should I get?+
Three is the minimum for any project over $5,000. Three bids give you enough data to spot outliers (too high or too low) and create negotiating leverage. For projects over $30,000, four to five bids gives you a clearer picture of the market.
What is bid leveling?+
Bid leveling is adjusting bids to cover the same scope before comparing prices. If Contractor A includes demo and Contractor B doesn't, you add the estimated demo cost to Contractor B's bid before comparing totals. Without leveling, you're always comparing apples to oranges.

Related Guides

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Contractor Deposit Guide

How much upfront is normal — and when to walk away.

What Should a Bid Include?

The complete checklist for every line item that must be present.

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