Comparing Estimates That Do Not Match

Why this matters

You asked three shops to price the same job and got three numbers that are far apart. The tempting read is that one shop is cheap and one is greedy. Usually the real explanation is that the three shops priced three different jobs: different equipment, different amounts of removal, a permit in one and not another, a warranty that lasts one year or ten.

Picking on price alone means picking the shop that left the most out, and then paying for the gaps later, often to the same shop at a worse rate because the work is already underway. This card shows how to line estimates up so they describe the same job, how to fill the gaps by asking rather than guessing, and how to read what is left.

How to read a single estimate line by line, including allowances and exclusions, is covered in How to Read a Contractor's Estimate. This card assumes you have done that for each one and are now putting them side by side.

Three estimates for one job, side by side

Here is a real-shaped example: three estimates to replace a central air conditioner and its indoor coil. To keep the comparison about scope rather than money, each price is shown as an index, with estimate A set to 100. B at 118 means B costs 18 percent more than A.

REPLACE CENTRAL AC   price as index, A = 100
                      A          B          C
Price index          100        118         86
System size         3 ton      3 ton    3.5 ton
Efficiency rating   standard   higher   standard
Load calculation    done       done     not done
Refrigerant lines   replace    replace  reuse
Haul-away, cleanup  incl.      incl.    NOT LISTED
Permit              incl.      incl.    NOT LISTED
Thermostat          reuse      new      reuse
Labor warranty      2 yr       10 yr    1 yr
Valid until         30 days    14 days  30 days

Every row where the three columns differ is a reason the prices differ. Below the price row, all nine rows have at least one estimate that disagrees with another. Before you look at the price row at all, read down those nine.

Why the lowest number often covers less

The low estimate is not automatically worse. Sometimes a shop is genuinely more efficient, buys better, or wants the work in a slow month. But on most mismatched sets, the low number is low because of what is missing, and the missing items fall into a few predictable groups:

• Work that is real but unlisted. Hauling away the old unit, cleanup, disposal of old refrigerant. If it is not on the estimate, you cannot hold the shop to it.
• Work done the cheaper way. Reusing existing refrigerant lines instead of replacing them, or reusing a thermostat that may not suit the new system. Sometimes reuse is fine; the point is that it is a different job.
• Paperwork skipped. No permit line on work that usually needs one. Skipping a permit lowers the price and moves the risk to you. See related: What a Permit Means for You as the Homeowner.
• Shorter promises. A one-year labor warranty against a two-year one is a smaller product even if the equipment is identical.

None of these show up in the price row. All of them show up in the rows above it.

Make it like for like: ask each shop to price the gaps

The fix is not to guess what the missing items are worth. Ask the shop that left them out to price them in writing. It knows its own costs; you do not.

Worked example. Using the table above, you send estimate C a short list:

1. "Please add haul-away of the old unit and cleanup, and price it."
2. "Please add the permit, and say who pulls it."
3. "Please price replacing the refrigerant lines rather than reusing them, or tell me why reuse is right for my house."
4. "A and B quoted 3 tons. Did you do a load calculation? If not, would you, and does it change the size?"

C answers: haul-away and cleanup adds 2 points, the permit adds 3, replacing the lines adds 7. That is 2 + 3 + 7 = 12 points of scope that was missing. C also runs a load calculation (a room-by-room estimate of how much cooling the house actually needs, which is how a shop sizes equipment rather than matching the old unit) and agrees 3 tons is right; the smaller unit takes 4 points off.

C's like-for-like price is 86 + 12 minus 4 = 94.

So the gap between A and C was 100 minus 86 = 14 points on paper, and is 100 minus 94 = 6 points once both describe the same job. Of the original 14, 12 were scope C had left out, and C's resize then moved its price 4 points back down. The 6 points that remain are what A charges over C, and they buy one more year of labor warranty (A's 2 years against C's 1), which is now a fair thing to weigh.

Now B. B is 18 points above A. You ask B to price the same standard-efficiency equipment A quoted, with everything else unchanged. B comes back at 106. That splits B's premium in two:

• 118 minus 106 = 12 points for the higher efficiency rating.
• 106 minus 100 = 6 points for a new thermostat and a labor warranty eight years longer than A's (10 against 2).

You now have three prices that mean something: A at 100, C at 94, and B at either 106 or 118 depending on which equipment you want.

Reading what is left

Once the scope matches, a remaining gap is a real difference and you can decide what it is worth to you:

• Efficiency premium. Whether B's 12 points pays back depends on your utility rate, your climate and how many hours a year the system runs. Ask B for its estimate of yearly energy use for both units, then check it against your own bills before you believe any payback claim.
• Warranty length. Ask what each labor warranty actually covers and what you would pay for labor in year three if a part failed under the manufacturer's warranty but outside the shop's. That is the real value of a longer labor promise.
• Load calculation. A shop that sized the system from the house rather than from the old unit's label has done more work, and C's resize shows why it matters. The shop that skipped it was about to sell you a bigger unit than the house needed.

What would change the answer. If two shops propose genuinely different approaches, such as one repairing the existing system and one replacing it, the estimates will never line up row for row and should not be forced to. Compare outcomes instead: how long each choice is likely to last, what it fixes, what it leaves at risk, and what each would cost to undo if it does not work. Ask each shop directly why it did not recommend the other approach.

The rows that usually differ, by type of job

The air conditioner table above is one trade. The same thing happens everywhere, and each kind of job has its own usual suspects. When you build your own side-by-side, start with these rows:

• Roof replacement. How many existing layers are torn off (some estimates assume one and charge extra for a second), how much damaged decking is included before a per-sheet price kicks in, whether ice and water barrier runs only at the eaves or also in valleys, and whether flashing is replaced or reused.
• Water heater replacement. Whether the price includes an expansion tank, a new venting connection, a drain pan, bringing the gas or water connections up to what your local code now requires, and haul-away of the old tank.
• Electrical panel upgrade. Whether the price covers the permit, coordination with the electric utility for the disconnect and reconnect, any new protection the code now requires on circuits that get touched, and patching the wall around the panel.
• Lawn or landscape installs. Whether old turf and debris are removed, how much soil preparation is included, and whether the first weeks of watering or a follow-up visit are part of the job.

For any of these, a per-unit price on a hidden condition (per sheet of decking, per foot of rotted framing) matters as much as the total, because it decides what you pay when the hidden condition turns out to be bigger than expected. Two estimates with the same total and very different per-unit rates are not the same deal.

How to ask without haggling blind

Asking a shop to explain its price is normal and most shops welcome it. Haggling against a number you do not understand is different, and it tends to get you a smaller job at the price you asked for.

• Send the same written list to every shop. "Please confirm whether your price includes: haul-away, permit, line replacement, thermostat, and how long your labor warranty runs." Identical questions produce comparable answers.
• Ask about scope, not about the other shop's number. "Shop A included the permit, does yours?" is useful. "Shop A is cheaper, can you match it?" invites the shop to match the price by quietly matching the gaps.
• Ask why, not just how much. "Why do you reuse the lines?" can get you a good answer (they were replaced recently and test clean) or a weak one. Either way you learn something.
• Accept that a shop may decline to price a different approach. Some will not install a configuration they think is wrong. That is information too.

Once you have chosen, tell the other shops. It costs one short message and it is the kind of courtesy that gets your call answered next time.

Signs a gap is not a misunderstanding

Most mismatches are honest. A few patterns are worth slowing down for:

• A price that is far below the others and stays far below after you have filled every gap in writing.
• A shop that will not put the missing items on paper, or answers "it's all included" without listing what "all" means.
• Pressure to sign today on a price that will "go away". A short validity window (B's 14 days) can be ordinary for equipment with moving prices; a same-day deadline is not.
• No license number on the estimate where your state licenses that trade. See related: How to Check a Contractor's License and Insurance.

How to tell you compared them right

You have a fair comparison when every row in your side-by-side table either matches across all three, or you know in writing what the difference is worth. At that point the remaining price gaps are choices you can make on purpose: a longer warranty, a higher efficiency rating, a shop you trust more. Keep every version of every estimate, including the revised ones, in your records file. See related: Your House Records File and What Goes In It.

References

• See related: How to Read a Contractor's Estimate
• See related: How to Check a Contractor's License and Insurance
• See related: What a Permit Means for You as the Homeowner
• See related: Choosing a Contractor: What Actually Matters