Why Three Bids Are Mandatory — and Still Not Enough
The conventional wisdom says get three bids and pick the middle one. This advice is better than getting one bid, but it misses the real challenge: three bids for a custom home are almost never bids on the same scope of work. One GC's bid includes landscaping; another does not. One includes appliances; another bids them as allowances. One uses vinyl siding; another assumes fiber cement.
Comparing the bottom-line numbers of three such bids is meaningless at best and actively misleading at worst. The only way to compare bids is to ensure all three are bidding the same scope — or to systematically identify every difference and adjust for it.
Reading the Scope Section
The scope of work is the most important part of any bid. It defines what is included, and by implication, what is not. Read it word by word, not to understand what the contractor will do, but to identify what they have left out.
Common scope omissions that cause conflict later: site clearing and grading (often assumed to be another contractor's work), dumpster and waste removal, temporary power during construction, final grade and seeding, exterior lighting, gutters and downspouts, window screens, and appliances.
Every item listed as an "allowance" — a placeholder cost that will be replaced by actual cost when selections are made — is a potential budget problem. An allowance for kitchen cabinets of $8,000 in a market where the homeowner's taste runs to semi-custom cabinets at $18,000 creates a $10,000 overrun that was hidden in the original bid. Ask the contractor what specific products they used to set each allowance and whether those products meet your expectations.
Line Items That Tell You the Most
Foundation cost relative to the total bid reveals whether the contractor has accounted for your specific site. A bid using a generic foundation cost without a soil report or site visit is a bid that will change — either with a change order or with a quality compromise. Ask every bidder: have you reviewed the soil report and visited the site? What site-specific assumptions did you make for foundation cost?
Framing cost should reflect your actual floor plan complexity. A rectangular single-story home frames faster than an L-shaped two-story with multiple roof planes. If all three bids show the same framing cost for your complex plan, at least one is using a rule-of-thumb number rather than a plan-specific estimate.
Subcontractor allowances are a particularly common hiding place for low bids. "Plumbing — allowance $18,000" is not a plumbing bid. It is a guess that has not been verified with an actual plumbing contractor for your specific plan. Ask each GC: have you received actual bids from your plumbing, electrical, and HVAC contractors for this project? Or are these internal estimates?
The Low Bid Problem
The lowest bid is almost always either missing scope, using low allowances that do not reflect your actual preferences, or from a contractor whose cost structure cannot sustain quality execution. Occasionally a legitimate contractor is lower because they are hungry for work, have an efficient crew, or are building near their base — but this is the exception.
When a bid is 15–25% below the other two, the right question is not "should I take it?" but "what is it missing?" Request a detailed scope reconciliation from all three bidders. List every line item from the highest bid and ask the lowest bidder where each item appears in their bid. The gaps will become visible.
A GC who is unwilling to walk through their bid in detail, explain every line, and justify their allowances is telling you something about how they will manage your project: without transparency. The bid review meeting is your best preview of what working with this contractor will be like.