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Blog - estimate bid quote - differenceWe refer to the use of quotes and bid when we are discussing construction pricing, but are they really being used correctly? These are actually the most commonly missed used words in the construction industry; estimate, bid, proposal, and quote.

If you're planning on doing work to your home, it is important that you start speaking the construction lingo. The planning stages are just as stressful as the remodeling process. It can feel overwhelming and intimidating when you begin sitting down with your chosen contractor to go over price, materials needed, and length of project. Below is a brief explanation of some of the things that people find most confusing.

In our industry, an estimate, bid, quote, and proposal take on different meanings depending on who is using the terms. Some construction professionals use the words “estimate” and “quote” interchangeably, while a bid or proposal may turn into a contract if the customer signs it.

Estimate Quote
Pros Pros
  • Fast idea of what it will cost.

  • Give Homeowner opportunity to meet various contractors.

  • Educates homeowner of what possible solution will look like.

  • Based on actual labor and material costs.

  • Forces homeowner to pick all materials to be used.

  • Forces contractor to assess totality of the job.

  • Clear understanding of what you get for your money.

  • Good way to assess competence level of contractor.

Cons Cons
  • Fault assessment of cost.

  • Can leave big holes in totality of work needed.

  • Not to be substituted for contractor interview process.

  • Takes 20-40 hours to properly complete.

  • Cost homeowner money.

  • Requires a contractor with greater business acumen (harder to find).


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Now, putting all of the confusion aside, below are what we consider the most widely accepted definitions:


  • A quote is a figure that a contractor gets from a supplier for the price of material they need for a job. Quotes are often only good for a certain amount of time-generally about a month; the builder has only that amount of time to buy the materials at specified price. Outside of this given time frame, the price of materials will change. Quotes expire because the materials involved in a construction project are commodities, and their prices fluctuate based on supply and demand.


  • Contractors use estimates to calculate their expected costs to complete a project. They look at the specifications for a project and determine the raw materials and labor they need. The contractor then goes to their suppliers to get quotes for the raw materials, which they use to calculate the estimates.
  • May include accounting of taxes, overhead, subcontracts, and equipment costs.
  • Some contractors do estimates for free, but there are others who charge for this. You can bet that the contractor that is charging you to do an estimate will do a better job at calculating job costs because they're looking to be more thorough, for your sake and theirs.


  • The word “bid” in construction may refer to a document that offers to perform a specific job at a specific price within a certain amount of time, or it may refer to the specific price offered in that document.
  • A subcontractor might also submit a bid to a general contractor to perform a certain part of a project. 


  • A proposal is a detailed document submitted as part of a competitive process to win business. It includes quotes received from suppliers for raw materials, proposals from subcontractors for their portion of work on the project, and estimates of labor costs, taxes, and other overhead.
    • Some proposals also include a place for the customer to sign as indicating their acceptance of the proposal. Contractors may also refer to this type of proposal as a “contract”. 

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While the difference between a construction estimate, quote, bid, and proposals /contract may be obvious, it's important to know in which context your contractor is using these words. It is crucial to the seamlessness ultimate success of your remodeling project.

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