How to Tell If a Contractor’s Quote Is Fair

What Should Be Included in a Contractor’s Quote?

Scope of Work: The Foundation of Fair Quotes

The first thing every contractor quote should include is a detailed scope of work. This is your blueprint for what’s being done, including:

• Specific work details
• Materials and products used
• Permit responsibilities
• Site prep, demo, and clean-up

Fair quote example:
“Remove and dispose of existing shingles. Install new 30-year architectural shingles with full underlayment, ice shield, and ridge vent system.”

Red flag quote:
“Roof replacement — $15,000.”

Without detailed scope, it’s impossible to know if you’re comparing fair quotes.

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Materials & Allowances: What Will You Really Get?

Material quality dramatically impacts price. Most contractors include allowances in their quotes, which are budgeted dollar amounts for items like:

• Cabinets
• Flooring
• Countertops
• Fixtures

Example of allowances:

• Cabinets: $7,000
• Countertops: $3,500

When evaluating how to tell if a contractor’s quote is fair:

• Review material allowances carefully.
• Ask if allowances reflect the quality you want.
• Know what happens if you upgrade materials.

A fair contractor will walk you through these decisions before finalizing the quote.

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Labor Costs: Who’s Doing the Work?

Labor includes:

• The contractor’s crew
• Subcontractors (plumbers, electricians, HVAC techs)
• Specialized trades

Licensed, insured, and highly skilled labor costs more — but delivers better, code-compliant work.

What to look for:

• Labor is fairly priced to allow proper safety protocols.
• The schedule allows enough time to complete work professionally.
• The crew is insured, reducing your liability risk.

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Permits and Inspections

A major part of how to tell if a contractor’s quote is fair is whether permits and inspections are properly included.

Fair quote includes:

• Permit filing
• Inspection coordination
• Associated government fees

Red flag: Contractors offering to skip permits “to save money.” This can expose you to legal, insurance, and safety risks.

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Overhead: The Real Cost of Running a Professional Business

Every contractor has business overhead — and it should be reflected in their pricing. This includes:

• Business insurance
• Vehicles and fuel
• Office administration
• Equipment maintenance
• Licensing fees

Contractors cutting overhead may be uninsured or running illegally, which can hurt you if something goes wrong.

Profit: Why It Matters in Fair Contractor Quotes

A fair contractor isn’t looking to break even — they deserve profit for running a sustainable business.

Typical profit margins:

• Residential contractors: 10%–20%
• Specialty contractors: up to 25%

Profit allows contractors to:

• Maintain warranties
• Invest in better equipment
• Pay qualified employees
• Stay in business long-term

If your contractor isn’t earning a healthy profit, you should worry more — not less.

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Payment Schedule: Protect Yourself & The Contractor

A fair quote includes a clear payment schedule, typically:

• 10%–30% deposit at signing
• Progress payments tied to milestones
• Final payment upon job completion

Red flag: Contractors demanding 50%+ upfront or full payment before work starts.

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Project Timeline: Realistic Expectations

Your quote should outline:

• Project start date
• Expected completion timeline
• Built-in allowances for weather or material delays

Contractors who promise unrealistically fast completion often overbook or cut corners.