Ask contractors that check out to submit proposals and fixed prices.

Checkbook’s undercover shoppers asked contractors to bid on three different projects: A two-story addition including expanding a family room and kitchen on the first level and adding a master bedroom suite with full bath above; total remodel of a small kitchen; and total remodel of a standard-size full bathroom. Company-to-company price differences were striking. For the largest of the jobs, quotes ranged from $190,000 to $321,000—a difference of more than $130,000. Even for the small bathroom remodel job, quotes ranged from $8,500 to $13,250—a difference of $4,750.The lesson? Get several bids. Get at least three, but more is better.

Don’t assume that high-priced companies perform better work than low-priced ones. Our experience collecting hundreds of thousands of prices from dozens of types of home improvement services is that there is no relationship between price and quality. The best contractors are just as likely to charge low prices as lousy outfits.

Ask for and look for detailed pricing, which will let you compare proposed materials, products, and work. Even if you have plans that detail every facet of your job—down to the make and model of each faucet and the exact number of tiles needed for your backsplash—contractors often will propose to do at least some parts of the job differently and supply slightly different products and materials. Make sure that any differences meet your expectations and preferences—and that major components of your project weren’t omitted from the proposal.

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Companies should deliver binding proposals and prices, though most will include provisions for extra charges if they discover something unexpected—for example, inadequate insulation behind walls, rotten plywood under roof shingles, or asbestos tile underneath existing flooring. Most contracts state that such extra work will be performed on a time-and-materials basis, which means that you’ll pay separately for additional materials and labor. Get as much detail from companies up front on how much they’ll charge.

If your plan isn’t fully detailed with an exact layout, specs, products, and materials, remodelers likely will pepper their proposals with “allowances,” which act as placeholders for materials and products that you’ve yet to select, along with labor to install them.

Contractors also often use allowances for kitchen cabinets, appliances, countertops, and other products you’ll choose later; for example, three allowance amounts for cabinets depending on whether you decide on a premium, standard, or budget line. Before finalizing your deal, nail down all these pricing details.

For items you can buy on your own, check prices with retailers to make sure you can’t do significantly better, especially for appliances, cabinets, and fixtures. When calculating budgets and bids for customers, most remodelers mark up the prices they pay their retail and wholesale sources, sometimes by a lot. We discuss here the pros and cons of buying your own products.

Proposals should also include descriptions of warranties, payment terms, lateness penalties, and many of the other items described in the next section.