The Written Estimate Is Your Best Sales Page

“My estimates lose to cheaper ones.” Picture where your estimate ends up: on a kitchen table next to two others, read by someone who was not there when you walked the job. The FTC tells homeowners to get multiple estimates, and says a written estimate should include a description of the work, the materials, a completion date and the price. Then it adds: “Don’t automatically choose the lowest bidder. And ask for an explanation if there’s a big difference among the estimates.” Your estimate should be that explanation, written down, because you will not be in the room when the question gets asked.

Why the cheaper one wins

Say a homeowner holds two estimates, “replace deck, $14,800” and “replace deck, $11,900.” They look like the same job at two prices, so the lower one wins, and nobody finds out until later that the cheaper bid reused the old footings, left out the railing and never mentioned hauling away the old boards. A vague estimate turns every comparison into a comparison of totals. A clear one makes the other estimates answer questions they never thought about.

What a clear estimate holds

1. Who you are. Your legal business name, address, license number where your state licenses your trade, and the fact that you carry liability insurance. The FTC tells homeowners to consider only licensed, insured contractors and to ask for proof of insurance; answer before they ask.
2. The scope, line by line. What you will do, in the customer’s words, with quantities: areas, linear feet, number of fixtures, layers removed.
3. The main materials by name. Brand, product line, color or model. “Composite decking” covers a wide spread of prices; a named product line does not.
4. What is not included. Permits, haul-away, patching and painting after the work, moving furniture, anything hidden behind a wall. This is where low bids hide their gaps. When yours lists them, the homeowner starts asking the others.
5. How surprises are priced. A unit price for the thing you cannot see yet: each rotten joist, each sheet of subfloor, each extra foot of trench. A known price for the unknown is worth more than a low total that grows.
6. Options, priced separately. A better railing, an upgraded product, an add-on. How to build them honestly is in Good, Better, Best.
7. How long the price holds. A date, not “30 days.” If material prices are moving, say what happens after it (see Material Price Escalation Clauses).
8. The payment schedule. The deposit, and what event each later payment is tied to. Before you set the deposit, check your state’s rule in How Big a Deposit Can You Legally Ask For?
9. When. The earliest start date you can keep, and how many days you will be on site.
10. The warranty. What you stand behind, for how long, and which parts carry the manufacturer’s warranty instead of yours.
11. The next step. One sentence on how to say yes.

The vague line and the clear one

A few examples of the difference, made up for illustration; use your own trade’s details:

The clear version takes longer to write the first time. After that, it is a template per job type you change in a few places. If you keep the lines in a price list, they also become the backbone of the price itself; the hourly side of that is in Overhead per Billable Hour.

Price claims on the page: the FTC’s pricing guides

An estimate that says “Regular price $12,400, sign today $9,900” is making a price comparison, and the FTC’s Guides Against Deceptive Pricing (16 CFR Part 233) say what makes one honest:

• “Regular” or “was” prices. A former price is a legitimate basis for comparison when it is “the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time.” Where “an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction,” the bargain “is a false one” (§233.1).
• “Others charge” claims. The higher price “must be based upon fact,” and should not appreciably exceed what substantial sales in your area are actually made at (§233.2).
• “Free with your job.” Where the seller raises the regular price of what must be bought, cuts its quantity or quality, or attaches other strings to the offer, “the consumer may be deceived,” and “all the terms and conditions of the offer should be made clear at the outset” (§233.4).

Local law can go further. Suffolk County, New York, for example, lists false or misleading statements about price reductions, or about your price compared with competitors’ or your own past or future price, among its deceptive trade practices (County Code §563-2). The safer and stronger move is to drop invented discounts altogether and let the options and the exclusions explain your price.

When the estimate becomes the contract

Once the customer says yes, state law decides what the paper must say, and an estimate built with the right sections turns into a contract with little retyping. Two examples:

• California. Section 7159 applies when the contract price for a home improvement exceeds $500. The contract must be in writing and signed before work starts, and carries set headings, among them “Contract Price,” “Description of the Project and Description of the Significant Materials to be Used and Equipment to be Installed,” “Approximate Start Date” and “Approximate Completion Date,” plus the note that extra work and change orders become part of the contract only once written and signed before that work begins. Section 7030.5 requires your license number in all construction contracts.
• Florida. Section 489.1425 requires a contract for residential work above $2,500 in labor and materials to carry the “FLORIDA HOMEOWNERS’ CONSTRUCTION RECOVERY FUND” statement. Leaving it out can cost a fine of up to $500 the first time and $1,000 for each later violation.

If your estimate already has the scope, the significant materials, the dates and the price as separate sections, the contract is mostly done. The full state-by-state lists are in What a Home Improvement Contract Must Say, and changes after signing are in Change Orders.

If you send estimates from the office, each one carries its lines, quantities, a note and how long the price holds, goes out by email with a link, and the customer accepts by typing their name. Accepting is not a signed contract, and the page says so; in a state like California the signed contract still comes next.

General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.