Last updated: May 21, 2026
The lowest bid can become the most expensive repair if the scope is thin, the permit is missing, payment terms are risky, or the contractor disappears.
Do these 5 things before you compare bids
A bid is useful only if each contractor is pricing the same job. “Roof repair” is not equal to a bid that includes permits, tear-out, flashing, disposal, code work, and cleanup.
- Write one plain-English scope. Name the repair, the rooms or areas, the main materials, and the result you need. Example: “Replace leaking roof over main house, repair damaged decking if found, install flashing at chimney, remove old shingles, haul away debris, and leave property watertight.”
- Take photos and notes. Save photos of the damage, dates, inspection notes, insurance letters, and repair estimates. Programs, insurers, and inspectors may ask for proof.
- Ask for at least 3 written bids when possible. The FTC tells consumers to get multiple estimates and avoid starting work until there is a written contract. See the FTC’s contractor scam guidance.
- Call the local building office. Permit rules are local. The International Code Council says the best way to know whether a permit is needed is to call your local building department before work begins. Use the ICC’s permit safety guide as a starting point.
- Check license, insurance, and complaints. Licensing rules vary by state and sometimes by city or county. Your state consumer office can point you to complaint options and consumer protection contacts.
If the repair is unsafe right now
Do not wait for a perfect bid if there is active danger. Leave the area if you smell gas, see sparking wires, have a collapsing ceiling, have floodwater near electrical service, or cannot safely use heat, water, stairs, or exits. Call 911 for immediate danger. For non-emergency urgent repairs, ask the building department, utility, insurance company, or local emergency management office what temporary safety steps are allowed before a full repair contract is signed.
Contractor bid comparison worksheet
Use this worksheet for each written bid. A good bid should be specific enough that another person can understand what will be done, what is not included, what must be paid, and what happens if hidden damage is found.
| Item to compare | Bid A | Bid B | Bid C | What to look for |
|---|---|---|---|---|
| Contractor name and address | Real business name, physical mailing address, phone, email, and person responsible for the job. | |||
| License or registration | Correct trade and location. Home improvement, roofing, electrical, plumbing, HVAC, and lead-safe work may have different rules. | |||
| Insurance proof | General liability and, when workers are used, workers’ compensation or other required coverage. Verify with the insurer or certificate holder if unsure. | |||
| Exact work included | Clear list of labor, materials, removal, disposal, permits, cleanup, and inspections. | |||
| Materials and brands | Brand, grade, model, size, color, energy rating, warranty, and substitutions allowed only in writing. | |||
| Permits and inspections | Who pulls permits, who pays fees, and which inspections must pass before final payment. | |||
| Start and finish window | Planned start date, estimated completion date, weather delays, and how schedule changes are handled. | |||
| Change-order process | No verbal changes. Hidden damage and extra work should require written approval before added cost. | |||
| Payment schedule | Deposit, progress payments, final payment, payment method, and lien waivers before final payment. | |||
| Warranty | Labor warranty, manufacturer warranty, what voids it, who handles claims, and whether it is transferable. | |||
| Cleanup and protection | Dust control, floor protection, yard protection, dumpster placement, debris removal, and daily safety. | |||
| Total price | Compare only after the scope is equal. A low price with missing work is not a savings. |
How to compare the scope of work
The scope of work is the heart of the bid. It is the written list of what the contractor promises to do. A weak scope creates disputes later because the homeowner thinks one thing is included and the contractor thinks it is extra.
For a roof, the scope should not only say “replace roof.” It should name tear-off, decking repair, underlayment, flashing, vents, debris removal, property protection, and inspection if needed.
For plumbing, electrical, HVAC, structural, septic, well, mold, or accessibility work, the scope should name the licensed trade involved and whether permits or code inspections are expected. In many places, a general handyman cannot legally do all specialty work. Connecticut’s consumer agency notes that home improvement contractors may be registered, while skilled work such as electrical, plumbing, or HVAC can require a more specific license. See the Connecticut home improvement guide for an example of how one state explains these differences.
Simple test for a good bid
Ask yourself: “Could I use this bid to prove what was promised if there is a dispute later?” If the answer is no, ask for a clearer written scope before you sign.
Ask each contractor these scope questions
- What exact problem are you fixing?
- What damage did you see during your visit?
- What materials are included?
- What is not included?
- What hidden damage could change the price?
- How will you document changes?
- Who is responsible for permits?
- What must pass inspection before the job is complete?
- What will I receive at the end: paid invoice, warranty papers, permit sign-off, photos, manuals, or lien waivers?
How to verify a contractor before choosing
License and registration
There is no single national home repair license. Rules vary by state, county, city, trade, and project size. Electrical, plumbing, HVAC, asbestos, lead, septic, and structural work may have separate rules.
Do not rely only on a number printed on a business card. Use the official state or local lookup. New York’s Attorney General says home improvement contracts should include a timeline, payment schedule, and as many project details as possible; the same office also advises checking permits and insurance when repair work is connected to insurance claims. See the New York fact sheet for an example of state-level contract guidance.
Insurance
Ask for a certificate of insurance. Check that the business name matches the contractor, the policy is active, and the coverage fits the work. If workers will be on your property, ask about workers’ compensation or the required local equivalent. FEMA warns disaster survivors to verify license and insurance and to avoid contractors who demand large payments up front. See FEMA’s contractor fraud warning.
Complaints and references
Search the business name, owner name, phone, and address with words like “complaint,” “lawsuit,” “scam,” and “review.” Call recent customers. Ask whether the job stayed on budget, passed inspection, was cleaned up, and got warranty service.
Also check the local building department when permits are needed. Ask whether the contractor has pulled permits recently and how to verify local rules.
Payment terms: what is safe and what is risky
Payment terms matter as much as price. A bad payment schedule can leave you with unfinished work, no cash left to hire someone else, or a lien problem if subcontractors or suppliers were not paid.
Do not pay the full price before work starts
The FTC warns that home improvement scammers may ask you to pay everything up front, accept only cash, or pressure you into a quick decision. Review the FTC’s repair scam tips before paying a deposit.
A safer payment plan ties payments to visible progress. For example, a small deposit may reserve the job or order materials, a progress payment may happen after materials arrive or a phase is complete, and final payment should wait until the work is finished, cleaned up, and inspections have passed if required.
| Payment issue | Safer approach | Warning sign |
|---|---|---|
| Deposit | Use a written contract and a deposit allowed by your state or local law. Pay in a traceable way. | Contractor wants all or most of the money before work starts. |
| Cash payment | Use check, card, or another traceable method when possible. Keep receipts. | Contractor says cash is required or offers a secret cash-only discount. |
| Progress payments | Pay only after the listed milestone is complete and documented. | Contractor asks for more money before finishing the previous phase. |
| Final payment | Wait for final walk-through, passed inspection if needed, warranty papers, paid invoice, and lien releases when relevant. | Contractor pressures you to sign completion papers before the work is done. |
| Financing | Compare the contractor’s financing with bank, credit union, housing counseling, local loan, and program options. | Contractor says financing must be signed today or the price disappears. |
Watch for lien risk
In some states, subcontractors or suppliers may be able to file a mechanic’s lien if they are not paid, even if you paid the main contractor. The FTC’s hiring contractor guide advises asking the contractor, subcontractors, and suppliers for lien releases or lien waivers. California’s contractor board also explains mechanics liens and provides lien release forms. Lien rules are state-specific, so ask your local legal aid office, state contractor board, or attorney if the project is large or a lien notice arrives.
Red flags that should slow you down
A red flag does not always prove fraud. It means you should pause, verify, and get help before signing or paying.
| Red flag | Why it matters | Safer next step |
|---|---|---|
| Door-to-door offer after a storm | Disaster areas attract contractors and scammers from outside the area. | Verify license, insurance, address, references, and permit rules. Use FEMA’s fraud protection tips. |
| Pressure to sign today | Pressure can hide bad terms, inflated pricing, or financing traps. | Take the contract to a HUD-approved counselor, legal aid, or trusted adviser. |
| No written scope | You cannot compare bids or prove what was promised. | Ask for a detailed written bid. Do not accept a verbal promise as the contract. |
| Permit is “not needed” for major work | Unpermitted work can fail inspection, affect insurance, or cause resale problems. | Call the building department yourself before signing. |
| Contractor wants you to pull the permit | In some places this can shift responsibility to you as the owner-builder. | Ask the building department what it means before agreeing. |
| Insurance check assignment | You may lose control of claim payments or repair decisions. | Talk to your insurer before signing anything related to claim benefits. |
| Financing is bundled into the sales pitch | The loan may cost more than the repair or be secured by your home or tax bill. | Compare with other financing and counseling options before signing. |
Special warning after disasters
FEMA says disaster fraud can be reported to the National Center for Disaster Fraud and other official contacts. Use FEMA’s disaster fraud page if someone claims to be connected with disaster aid, asks for fees, or pressures you after a storm, fire, flood, tornado, hurricane, or other declared event.
Financing and contractor-arranged loans
Many homeowners accept contractor financing because the repair feels urgent. Slow down if the financing is tied to the bid. Ask for the cash price, the financed price, the annual percentage rate, the payment term, fees, whether the debt is secured by your home, and what happens if the work is defective.
Be extra careful with any financing that becomes a tax assessment, lien, mortgage, or other claim against the property. The CFPB describes residential PACE as financing for home improvements that results in a tax assessment on the real property. CFPB’s Regulation Z rule for residential PACE is listed on its PACE financing rule page. PACE availability and protections vary, so check your state and local rules before signing.
A HUD-approved housing counselor can help you compare repair loans, avoid foreclosure risk, and understand housing costs. HUD says its housing counseling network provides independent advice and lists 800-569-4287 as the phone number to find a counselor. Start with HUD’s housing counseling page.
If a repair program, grant, loan, or nonprofit may pay
If you are applying for home repair help, do not hire a contractor too early unless the program tells you to. Many local programs must inspect the home, approve the scope, check income, confirm ownership, and approve the contractor before work starts. Paying a contractor before approval may make the repair ineligible for help.
Rules differ by program. Some choose the contractor, some require two or three bids, and some use approved contractor lists. Many will not pay for work already started. Extra reviews may apply for lead safety, historic homes, floodplains, tribal land, or local code issues.
Places to ask about repair help
- Local 211: Call or search your local 211 for nearby housing repair, disability modification, disaster recovery, utility, and nonprofit referrals.
- USDA Rural Development: Rural very-low-income homeowners may ask about the USDA repair program. USDA lists loans for eligible very-low-income homeowners and grants for eligible elderly very-low-income homeowners to remove health and safety hazards. Amounts and eligibility should be checked on USDA’s current state page or with a local Rural Development office.
- Habitat for Humanity: Some local affiliates offer repair or preservation programs. Habitat says families may partner based on income, need, and willingness to help. Start with Habitat’s home repair page and then check your local affiliate.
- Rebuilding Together: Local affiliates may help with safe and healthy housing repairs. Services and application steps vary by affiliate, so use the affiliate finder.
- City, county, or state housing office: Ask about owner-occupied rehab, emergency repair, accessibility modification, weatherization, CDBG, HOME, lead hazard, septic, well, or disaster recovery programs.
- Tribal housing office: Tribal members or households on tribal land may need to ask the tribal housing authority about approved contractors, inspections, and repair priorities.
- Area Agency on Aging or disability resource center: Older adults and people with disabilities may have local accessibility, ramp, fall prevention, or minor repair options.
Do not promise yourself that a program will reimburse you
Many programs have waitlists, income limits, repair limits, funding caps, and approval steps. Ask in writing whether work can start before approval. If the answer is unclear, wait or get help from a counselor before signing.
Documents to gather before you apply or sign
Keep one paper or phone folder. Ask a family member, caseworker, counselor, neighbor, or legal aid office to help if needed.
- Photos of the damage from several angles
- Dates when the problem started and got worse
- Inspection reports, code notices, utility shutoff notices, or insurance letters
- Written bids with the same scope of work
- Contractor license or registration number
- Insurance certificate
- Permit notes from the building department
- Proof of ownership, mortgage statement, tax bill, or manufactured-home title if a program asks
- Income documents if a repair program asks
- Warranty papers, manuals, model numbers, and paid invoices after work is complete
- Do not hand over original documents unless you know exactly why they are needed and how they will be returned.
How to handle delays, waitlists, and denied bids
Delays are common. Contractors, materials, inspectors, and repair funds may all be limited.
If a contractor delays the bid
Give one clear deadline: “I need the written bid by Friday at 5 p.m. so I can compare fairly.” If the contractor cannot do that, note it.
If a program says the bid is not acceptable
Ask why. The problem may be contractor approval, uncovered work, a price above the cap, or another inspection. Ask whether you can revise the scope, get another bid, use an approved contractor, or appeal.
If you are waitlisted
Ask whether emergency repairs are handled separately. A leaking roof, failed furnace, unsafe electrical panel, broken sewer line, or inaccessible entrance may get different priority. Ask what temporary repairs are allowed.
If you are denied
Ask for the denial reason in writing. Common reasons include income, ownership, unpaid taxes, service area, repair type, work already started, missing documents, or exhausted funds. A denial from one program does not mean every program will deny you.
Common bid comparison mistakes
- Choosing the lowest total without comparing scope. The low bid may leave out permits, disposal, code upgrades, or repairs behind the wall.
- Letting the contractor write a vague contract. “Repair bathroom” is not enough for a paid job.
- Not asking who pulls permits. The wrong answer can create problems with inspections, insurance, resale, or local enforcement.
- Skipping license checks because the contractor seems nice. Fraud often starts with trust and pressure.
- Paying too much up front. If the contractor stops work, you may not have money left to recover.
- Signing completion papers too early. Wait until the work is complete, inspected if needed, cleaned up, and documented.
- Starting work before program approval. Local grants, loans, and nonprofit programs may refuse to pay for work started before approval.
- Ignoring lien waivers on larger jobs. A paid invoice from the main contractor may not prove that subcontractors and suppliers were paid.
Short phone scripts
Call script: asking a contractor for a clearer bid
Hello, I am comparing written bids for the same repair. Could you please send a revised bid that lists the exact scope, materials, permits, cleanup, payment schedule, warranty, and what is not included? I need the bid in writing before I can choose a contractor.
Call script: checking permit rules
Hello, I own a home in your area and I am planning a repair. The work may include [briefly describe repair]. Do I need a permit or inspection? Should the contractor pull the permit, or can a homeowner pull it? Are there risks if I pull it myself?
Call script: asking a repair program before hiring
Hello, I am applying for help with a home repair. Should I get bids before I apply, or do you inspect first? Do you require approved contractors, multiple bids, income documents, ownership proof, or written approval before work starts?
Call script: asking for housing counseling
Hello, I need help comparing a home repair contract and financing before I sign. I am worried about payment terms, liens, and whether the loan could put my home at risk. Can a HUD-approved housing counselor review my options with me?
When to get outside help before signing
Get outside help before signing if the repair is expensive, the contract is confusing, the contractor is pressuring you, the financing is secured by your home, you received an insurance check, you got a lien notice, or you are applying for a public repair program. Possible helpers include a HUD-approved housing counselor, legal aid, state consumer office, city housing office, building inspector, insurance adjuster, tribal housing office, Area Agency on Aging, disability resource center, or trusted nonprofit.
If the job is already going badly, write down the timeline, save photos, keep all texts and emails, do not make new verbal agreements, and ask your state consumer office or legal aid what complaint, mediation, bond, insurance, small claims, or contractor board options exist in your state.
FAQs
Should I always choose the lowest contractor bid?
No. Choose the bid that is complete, clear, properly licensed or registered for the work, fairly priced, and safe. A low bid can cost more if it leaves out permits, disposal, code work, materials, or warranty service.
How many bids should I get?
Three written bids are a good goal when the repair is not an emergency and enough contractors are available. Some repair programs require a set number of bids. In a true safety emergency, ask the local agency, insurer, or program what temporary work is allowed while you seek full bids.
Can I hire a contractor before a grant or repair program approves me?
Be careful. Many programs will not pay for work that started before written approval. Ask the program whether you should get bids first, whether it uses approved contractors, and whether emergency temporary repairs are allowed.
What if the contractor says no permit is needed?
Call the building department yourself. Permit rules are local and depend on the repair. If the department says a permit is required, make sure the contract says who will pull it, who will pay for it, and what inspection must pass before final payment.
What is a change order?
A change order is a written change to the original contract. It should describe the added or changed work, extra cost or credit, schedule effect, and approval by both sides before the work is done.
What should I do if I already signed a bad contract?
Do not ignore it. Save all papers, messages, photos, invoices, and payment proof. Contact your state consumer protection office, contractor board, legal aid office, HUD-approved housing counselor, or local building department. Ask whether your state has cancellation rights, complaint options, mediation, or contractor bond claims.
About This Guide
This HomeRepairGrants.org guide uses official federal, state, local, and high-trust nonprofit/community sources mentioned in the article, including FTC, FEMA, HUD, CFPB, USDA, state consumer agencies, local permit guidance, 211, Habitat for Humanity, and Rebuilding Together resources.
HomeRepairGrants.org is not a government agency, does not guarantee eligibility, and is not legal, financial, tax, medical, insurance, disability-rights, or government-agency advice.
Corrections: Email info@homerepairgrants.org with corrections.
Update note
Next review: August 17, 2026