How to Read Your Contractor’s Estimate

If you are doing the right research before you begin your home remodel, you should have a vague sense of how much individual items are going to cost. For example, you should recognize that your marble bathroom countertops are worth a pretty penny and that replacing all your old single pane windows with double-pane, gas-inserted windows isn’t going to be cheap.

Even so, when your contractor submits their estimate of cost at the beginning of your remodeling project, you should do more than just glance at the total sum. It is important that you pay close attention to what labor and materials your contractor expects to include in this project and what, exactly, they expect to charge you for them. Because this information can get worked into the contract for the project, it is critical you verify that the information contained in the estimate is correct.

Unfortunately, contractor estimates aren’t always easy to understand. If you want to be certain that you are getting what you want from your contractor — and you are paying an appropriate amount, too — read on for some tips for reading estimates properly:

Vague vs. Detailed

Most project estimates will contain two distinct categories: generic category pricing and line-item pricing. Generic category pricing tends to be much vaguer, with broad groups of expenses like “demo” and “flooring.” You might also see a category like “materials,” which encompasses all the generic supplies required to complete your project in full, but most often this category contains costs associated with labor. In contrast, line-item pricing lists specific elements of your project, like “quartz countertops” and “chandelier install.”

Unfortunately, not all contractor estimates are created equal. Some estimates almost entirely generic category pricing, and other estimates are exceedingly detailed in their line items. There are benefits and downsides to both vague and detailed estimates, and what you prefer often boils down to how well you understand your own construction project.

For instance, some clients get overwhelmed by a specific breakdown of all the labor required to demo your space — removing floors, pulling out baseboards and toe kicks, containing dust, renting a dumpster, etc.; they prefer broader, more general estimates, which help simplify the document. In contrast, you might rather have more line items in your estimate, so you can better understand where your contractor is getting their numbers and verify with your own research.

Though different contractors can have different methodologies for creating estimates — and different construction estimating software to calculate their costs — usually, differences in the detail included in an estimate are determined more by the contractor’s understanding of the client’s project. Thus, if you want your estimate to be clearer, you need to have as much information ready for your contractor as possible. For instance, you should know exactly the size and shape of cabinets in your kitchen remodel, the type of countertop you want, the number and style of light fixtures, etc. Not only will this give your contractor a few line items to estimate, but it will also make their estimations for labor much more accurate.

Markup and Profit Rates

It is important to remember that your estimate won’t list materials and labor at cost. Contractors are professionals who are working for pay; the effort they put into completing your project must be marked up to ensure that they and their laborers are adequately compensated for their effort.

Some contractors are open about the amount they markup prices, and others aren’t. Regardless, it isn’t wise to ask your contractor to reduce their rates to keep your costs down. Likely, your contractor is already cutting their costs as low as possible to be competitive within their market. Asking them to further reduce their markup is disrespectful, and if they do slash their rates, you are likely to see a considerable decrease in the quality of their work, too.


If your contractor’s estimate passes muster, you should accept their proposal and expect a contract that outlines the anticipated project in full. If you need help understanding your contract, you might hire a lawyer — especially one with experience in this field. Then, should something go wrong with your home project (an unlikely event) you will have another knowledgeable professional to help.