Every homeowner knows the feeling. You have three bids. Two are in the same range. One is meaningfully lower. The temptation is real — you could save $800, maybe more.
Most of the time, you don’t save that money. You spend it twice.
Where the Money Goes When the Price Is Too Low
A contractor who bids 25–35% below the market rate for a job isn’t doing the same job for less. They’re doing a different job — one that looks similar until something goes wrong.
Here’s where that margin disappears:
Materials substitution. The spec says 30-year architectural shingles. The low bidder installs 25-year 3-tab. The spec says polyaspartic floor coating. They use epoxy. The spec says pressure-treated UC4B lumber for ground contact. They use standard construction lumber. You won’t notice immediately. You’ll notice in five years.
Uninsured labor. A contractor without general liability insurance bids lower because they’re not paying that premium. When something goes wrong — a subcontractor drops a tool through your window, a ladder falls against your car, a fire starts during welding — uninsured work becomes your problem. Their insurance doesn’t cover it because they don’t have any. Your homeowner’s policy may cover some of it, but you’ll pay the deductible and take the claim hit.
Skipped permits. Permitted work costs more because the contractor charges for pulling permits, preparing documentation, and scheduling inspections. Work done without required permits saves that cost — and transfers the liability to you. Unpermitted work surfaces at resale during buyer inspections, can void your homeowner’s insurance coverage, and may require demolition and redo at your expense to bring into compliance.
Scope reduction. The low bid wins the job, then the change orders start. “We opened the wall and found X.” “The substrate wasn’t what we expected.” “That’s not covered in the original estimate.” Each of these may be legitimate — conditions do change during construction. But contractors who win on price and survive on change orders know exactly which surprises they’re likely to find, and they know not to include them in the original estimate.
No warranty. A contractor who’s already squeezed the margin to win the bid has no financial room to come back and fix problems. Whether the warranty is formal or informal, a low-margin contractor simply can’t afford to honor it.
The Change Order Trap
The most sophisticated version of the low-bid strategy is the loss leader. A contractor bids low — intentionally, knowing they can’t make money at that price — to get the job started. Once work has begun, stopping is expensive and psychologically difficult. Walls are open. Materials are in. You’re committed.
This is when change orders appear. Each one, individually, seems reasonable. Together, they bring the total project cost to what a fair bid would have been — or more.
The defense against this is a detailed written scope of work before the job starts. Not a price, a scope. Every material specified. Every finish listed. Every exclusion named. A contractor who provides this level of detail upfront, regardless of price, is operating transparently. A contractor who resists putting scope in writing is keeping their options open.
Why Three Bids Matter — and How to Read Them
Get at least three bids for any project over $2,000. Then read them correctly.
Compare scope, not price. Lay the three estimates side by side and verify they describe the same work. Same materials. Same permit handling. Same cleanup and disposal. Same warranty terms. Differences in those factors explain differences in price — and reveal what you’re actually being offered.
Discard the outliers. If two bids cluster in the same range and one is dramatically lower, the lower one is almost always doing something different. Ask specifically: what are you doing that allows this price? A clear, specific answer is reassuring. Vagueness is a signal.
Verify insurance. Ask each contractor for a certificate of insurance. Call the carrier to confirm it’s active. This takes five minutes and eliminates a category of risk that homeowners rarely think about until they need it.
Check permit handling. Confirm who handles permits and who pays for them. A bid that excludes permit fees is lower on paper and potentially more expensive overall.
What Fair Pricing Actually Looks Like
In Colorado Springs, licensed and insured handyman and contractor work is priced to cover real costs: materials at retail or modest contractor discount, skilled labor, insurance, licensing, overhead, and a margin that keeps the business viable enough to honor its warranties.
That pricing is usually not the cheapest option available. It’s also usually not the most expensive. It’s the price at which someone can do the work correctly, stand behind it, and still be in business next year when you need them again.
A bid 30% below that range is telling you something. Listen to it.
Jonathan Shea is the owner of The Colorado Handyman, serving Colorado Springs and the Pikes Peak region. Every project gets a detailed written estimate with flat-rate pricing before work begins. Licensed and insured with $2M general liability coverage.
Get a free written estimate: Contact The Colorado Handyman or call (719) 243-9718.
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Flat-rate written estimate, no hourly surprises. Serving Colorado Springs, Monument, Fountain, Woodland Park, and the Pikes Peak region.