Contractor Estimate Review Checklist

Go through this checklist before signing any contractor estimate. The best time to dispute is before you sign — 60% of disputes are resolved when raised before the contract is signed.

Red Flags — Check Each One

Materials Priced Above RetailContractors typically mark up materials 10–20% — that's reasonable. Look up lumber, tile, or fixtures on HomeDepot.com or the manufacturer's site. Markups of 50–100% above retail are excessive and negotiable.
Vague Scope Description"Demo and remodel bathroom" with no square footage, no specified fixtures, no material grades. Vague scope is how contractors add $10,000 in "extras" that you thought were included. Demand itemized scope before signing.
Front-Loaded Payment ScheduleRequiring 50%+ upfront before work starts gives no incentive to finish. Standard: 10–15% down, payments tied to milestones, 10–15% held until final completion and your sign-off.
Unlimited Change Order Language"Additional work billed at time and materials" or "changes subject to additional charges" with no cap or written approval process is a blank check. Add: "All change orders approved in writing before work begins."
No Workmanship WarrantyAny reputable contractor warrants their labor for at least 1 year. If the estimate has no warranty language, ask for it explicitly in writing. If they refuse, consider that a signal about their confidence in their work.

Dispute Steps — In Order

1
Get at least three estimatesNever sign the first estimate you receive. Three estimates gives you a real market rate. If two estimates are within 15% of each other and one is 40% higher, you know where the padding is.
2
Break out labor vs. materialsAsk for separate line items for labor and materials on every major item. Blended line items hide markups — you can't comparison-shop what you can't see.
3
Tie payments to milestonesNegotiate: 10% to start · 25% after demo/framing · 25% after rough-ins · 25% after finishing · 15% on final walkthrough and sign-off. Put the schedule in the contract, not just the estimate.
4
Define the change order processAdd to the contract: "All change orders must be approved in writing by owner before work begins. Changes will be quoted at itemized material cost plus [X%] labor markup." This eliminates surprise add-ons.
5
Verify license and insuranceCheck your state's contractor license lookup before signing anything. Ask for proof of general liability insurance and workers' comp. Unlicensed contractors are a legal and financial liability.

Standard Payment Schedule Reference

Project Start

10–15% down payment to cover material deposits and mobilization

Demo / Framing Complete

25% of total contract price — confirmed by walkthrough

Rough-Ins Complete

25% — plumbing, electrical, HVAC rough-in inspected and approved

Finishing Complete

25% — drywall, paint, flooring, fixtures installed

Final Completion

10–15% — punch list complete, your walkthrough sign-off required

Change Orders

Written approval required before work begins. Never authorize verbally.

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