5 Red Flags in a Construction Bid (and How to Spot Them in 60 Seconds)

We have reviewed more than 1,000 contractor bids on Bidroom. The good ones look professional, complete, and boring. The bad ones share five recurring tells.

If you can spot any of these five red flags in 60 seconds, you can save yourself months of grief.

Red flag #1: Round-number pricing with no breakdown

What it looks like: "Kitchen remodel — $35,000."

Why it is bad: No real estimate produces a round number. Real estimates are built up from line items: cabinets ($X), countertops ($Y), labor ($Z), permits ($A), fixtures ($B). The total is whatever the math says.

A round-number price means one of two things: either the contractor is making it up on the spot, or they are leaving themselves room to load it up with change orders later.

What to do: Ask for a line-itemized breakdown. Any contractor who refuses is telling you they do not have one.

Red flag #2: No materials specified

What it looks like: "Includes flooring, paint, fixtures."

Why it is bad: "Flooring" can mean $2/sf laminate or $14/sf hardwood. "Fixtures" can mean Glacier Bay or Brizo. The unspecified material is the contractor's free upgrade path — for them, not for you.

What to do: Insist on brand, model, and grade for every material. If the contractor cannot specify, get a materials allowance instead — a fixed dollar amount you can spend, with overages billed transparently.

Red flag #3: No exclusions list

What it looks like: The bid lists everything that is included. Says nothing about what is not.

Why it is bad: The fight is always about what was not in the scope. Without an exclusions list, every assumption becomes a future dispute.

Standard exclusions for most projects:

• Permit fees (or the contrary — explicitly include them)
• Disposal of hazardous materials (asbestos, lead paint)
• Repair of underlying conditions discovered during demolition
• Final cleaning beyond construction debris removal
• Window treatments, appliances, and other finish items

What to do: If the bid has no exclusions section, write one yourself and have the contractor sign it.

Red flag #4: Demand for more than 25% deposit

What it looks like: "50% to start, 50% on completion."

Why it is bad: A working contractor with material credit lines does not need half your money to begin. A 50% deposit is almost always financing the contractor's previous job, not yours.

Many states cap residential deposits by law. California's cap is the lower of 10% or $1,000. Most other states have similar limits.

What to do: Cap your deposit at 10%. If the contractor refuses, they are not the contractor for you. Read more in our piece on three things to know before hiring.

Red flag #5: No license number on the bid itself

What it looks like: A nicely formatted bid with a logo, an address, and no license number.

Why it is bad: Many states actually require contractor license numbers to appear on every written bid, advertisement, and invoice. Their absence often means the contractor is unlicensed for the work being proposed — or hopes you will not check.

What to do: Look for the license number. Look it up. Verify it covers the work classification. This is a 30-second job that prevents 100% of unlicensed-contractor disasters.

How Bidroom catches all five automatically

Every bid submitted on Bidroom is run through our AI bid analyzer before it ever reaches you. The analyzer:

• Flags suspiciously round-number totals against our market database
• Verifies materials are specified at the brand-and-model level
• Requires an exclusions section before a bid can be submitted
• Caps deposit requests at 10% of total project value
• Pulls and verifies the contractor's license number against the state board in real time

You get an AI-scored bid with a green-yellow-red rating on each of the five red flags above. Decisions get easier. Surprises get rarer.

The 60-second test

Before you sign any contractor bid, look for:

1. A line-itemized price (not a round number)
2. Specified materials (brand, model, grade)
3. An exclusions section
4. A deposit ≤ 10%
5. A visible, valid license number

If all five are present, you are probably looking at an honest bid. If any are missing, ask. If the contractor cannot provide them, walk away.

Sixty seconds. That is all it takes.