How to Read a Contractor Bid Without Getting Burned

The Problem With Comparing Bids on Price Alone

Three bids on the same project can easily spread $80,000–$150,000 apart on a custom home or full gut rehab. That spread almost never means one contractor found a smarter way to build it. It means the bids are scoping three different projects. One contractor included everything. One included most things. One built the bid to win on price and plans to fill the gap with change orders. The only way to tell them apart is to read what each bid actually includes.

What a Legitimate Bid Looks Like

• Line-item breakdown by trade or CSI division: framing, concrete, roofing, windows and doors, plumbing, electrical, HVAC, insulation, drywall, finish carpentry, cabinetry, tile, flooring, painting, and exterior work — each with a price
• Clearly labeled allowances: an allowance is a placeholder for owner-selected items (tile, fixtures, appliances). Every allowance should state the dollar amount and what it covers. Allowances that are too low will produce change orders when the owner makes actual selections.
• Exclusions list: what is explicitly not included in the bid — permits, design fees, utility connections, landscaping, furniture, window treatments
• Scope of work narrative: a written description of what the contractor is committing to do, not just a number
• Schedule: a projected start date and duration. Not a guarantee — a projection based on the scope
• Payment schedule: milestone-based, not front-loaded. Florida law governs deposit requirements; deposits above 10% before work begins are a red flag

Red Flags in a Bid

• No line items — just a total number. This is the clearest signal that you're signing a blank check.
• Allowances that are obviously insufficient. A $5,000 allowance for a kitchen tile package on a 400 sq ft kitchen is not a real number. When the owner selects actual tile, the change order hits.
• Bid falls 15% or more below all other bids. In South Florida, contractors who dramatically underbid either don't understand local code requirements — particularly HVHZ impact product costs — or they plan to make up the margin in change orders.
• No mention of impact window and door product approvals or NOAs. In Miami-Dade and Broward, every opening requires HVHZ-compliant products. If the bid doesn't address this, the contractor hasn't scoped it.
• Large upfront deposit requested before work begins. A 10% deposit or first milestone payment is normal. Requests for 30–50% upfront are a serious warning sign.
• No references from completed projects of similar scope. Any GC who won't provide references from completed custom builds or gut rehabs in South Florida is not a GC you want.
• License not verifiable. Verify every contractor's license at myfloridalicense.com before you sign. Search by name or license number. Check that the license is active and that the classification matches the work being performed.

Questions to Ask Before You Sign

• Who are your licensed subcontractors for plumbing, electrical, and HVAC? Do you have their license numbers?
• What is your general liability insurance coverage? Who is the carrier and what are the policy limits?
• Have you built this type of project in this county before? Permitting in Broward, Miami-Dade, and Palm Beach is meaningfully different.
• What is your change order process? Will changes be in writing with cost and schedule impact before work begins?
• What does your construction schedule look like, and how do you handle inspection sequencing?
• Can I speak with the GC who will be on-site daily — not just the sales person?

The Change Order Setup

The most common way homeowners get burned in construction isn't outright fraud — it's the change order setup. A contractor bids low on a project, wins on price, and then finds reasons to issue change orders throughout the job. Missing scope items, underpriced allowances, and work that 'wasn't in the plans' all become change orders. By the time the project is halfway done, the owner is committed and can't walk away. The way to avoid this is to make sure the bid is complete before you sign — not by refusing all change orders (some are inevitable), but by eliminating the obvious gaps upfront.

One More Thing: The Lowest Bid Isn't Your Friend

In South Florida construction, bids that fall significantly below market reflect something. The contractor is leaving out scope. They're using unlicensed subs. They're not pricing HVHZ-compliant impact products. Or they don't have the project management capacity to run the job correctly and will rely on your tolerance and inattentiveness to fill the gaps. The market price for a well-run custom home or gut rehab in South Florida is what it is. A bid that comes in significantly below that number should prompt more questions, not excitement.