When you're investing in a major home improvement project like new siding or roofing, it's natural to compare estimates and look for the best deal. After all, no one wants to overpay. But if one bid comes in significantly lower than the others, it’s worth pausing to ask why.

While a lower bid might seem like a win at first glance, it can often be a sign of problems to come. Especially in a saturated market where contractors may underbid just to win the job.

Let’s explore why the lowest bid isn’t always the best value, and how choosing a contractor based solely on price could end up costing you more in the long run.

After all, who doesn’t want to save money?

Why Some Contractors Submit Low Bids

Let’s start with the “why.” In highly competitive markets, some contractors will intentionally submit a very low estimate to secure the job. While this tactic might work in getting your signature on a contract, it often comes at a cost. This is sometimes called a "race to the bottom.”

While that might sound like a good deal at first glance, here’s what it often means in practice:

  • The contractor is undercutting the competition to make a sale
  • They plan to cut corners during installation or use lower-quality materials
  • They’re hoping to change the scope later and charge more once the job is underway
  • They’re desperate for work and may not have the resources to finish

In other words, the price may look appealing—but the outcome might not be.

Once the work begins, you might be hit with unexpected charges or change orders, dramatically increasing the final price. The scope of work may be altered after the fact, or you may find that key elements you assumed were included—like flashing, rot repair, or weatherproofing—were never part of the quote to begin with.

This type of bait-and-switch strategy is frustrating, and it can erode trust. A reputable contractor will provide a clear, detailed bid upfront and take the time to explain what is (and isn’t) included.

5 Hidden Costs of a Too-Good-To-Be-True Bid

Let’s break down the risks that can come when you go with the lowest bid:

1. Change Orders After the Job Begins

One of the most common scenarios with a low bid is this: the contractor prices the job low to win it, then starts adding charges once the work begins. They may claim:

  • The original scope didn’t cover this or that
  • Materials suddenly cost more
  • There were "unforeseen" issues they didn’t mention during the estimate

These are called change orders, and while some are legitimate (like uncovering hidden rot or structural issues), others are entirely avoidable and used as a tactic to increase revenue after the contract is signed.

The result? The final cost ends up much higher than you expected and potentially even more than the higher, more realistic bids you turned down in the beginning.

2. Poor Installation or Rushed Work

Low bids often mean the contractor is cutting corners somewhere. Labor can be costly, so one of the most common ways to reduce costs is by speeding through the work. But with siding and roofing, quality matters.

When crews are underpaid or rushed, quality takes a backseat.

Installations done too quickly are prone to problems like misaligned panels, improper flashing, unsealed joints, or skipped steps that compromise long-term performance.

The result might look fine at first, but issues can surface months or years later in the form of water intrusion, mold, or even structural damage. What you save upfront could lead to costly repairs down the line - and who knows if you can get a hold of the same team to fix what they messed up.

Remember: siding and roofing aren’t just cosmetic—they’re your home’s first line of defense. You want the job done right, not just done fast.​

3. Contractors Who Can’t Finish What They Start

It’s not uncommon to hear stories of homeowners who signed a contract, paid a deposit, and then… nothing. Or worse: crews show up, demo the house, and then disappear halfway through.

Why does this happen?

  • The contractor underbid and ran out of money to pay their crews or buy materials
  • They’ve overcommitted and can’t keep up with their jobs
  • They don’t have proper licensing, bonding, or insurance
  • They’re juggling cash flow between jobs and hoping yours will fund their last other ones

In the worst cases, the contractor goes out of business mid-project, leaving homeowners with no recourse and half-finished homes.

That “cheap” bid suddenly becomes the most expensive mistake you could make.

4. Inexperienced or Unlicensed Labor

To keep their bids low, some contractors rely on less experienced or unlicensed labor. This might include day laborers, subcontractors with no quality oversight, or even workers who aren’t trained to install specific products according to manufacturer standards.

A lower bid might also mean the contractor is skipping ongoing training or certifications that ensure crews are up to date on the latest techniques and safety standards. While that might not seem important now, it becomes very important if something goes wrong.

For products like James Hardie siding or Owens Corning roofing systems, installation guidelines are critical and mistakes can void your warranty.

5. Fly-by-Night Companies or Vanishing Warranties

Some companies rely on underbidding as a short-term strategy. They show up in your area for a season, grab what jobs they can, and disappear. They may have no long-term presence, no solid reputation, and no intention of honoring warranties or service calls down the road.

If something goes wrong later (even if it’s their fault) you’re out of luck. There’s no one to call, no one to fix it, and no protection.

When you choose a reputable, established contractor, you’re not just paying for labor and materials. You’re investing in accountability, reliability, and long-term peace of mind.

How to Compare Bids the Right Way

So how do you know whether a bid is fair and whether you're comparing apples to apples?

Here are a few things to look for:

Detailed Scope of Work

A professional contractor should provide a clear, itemized estimate that includes:

  • Specific materials and brands
  • Number of squares/boards/units
  • Installation methods and prep work
  • Disposal or cleanup fees
  • Warranty coverage
  • Any exclusions or optional upgrades

If one bid is vague or missing key details, it may be hiding shortcuts or bait-and-switch tactics.

Materials Matter

Not all siding, shingles, fasteners, or underlayments are created equal. Some contractors quote a low price but use low-end or off-brand products. Ask:

  • Are they using the materials you want or a cheaper knockoff?
  • What kind of wrap, flashing, or insulation is included?
  • What’s the warranty on materials and is it valid with their install method?

Cheaper materials may save money today but often result in repairs, fading, moisture issues, or premature failure.

Labor Quality & Experience

Ask how long their crew has been with the company. Are they in-house employees or day laborers? Are they certified by the manufacturer to install the products being used?

Skilled labor is worth every penny. When it's your home on the line, experience matters.

Licensed, Bonded, and Insured

Low-bid contractors sometimes skip the cost of proper licensing or liability coverage to keep prices down. If something goes wrong (like an injury on your property) you could be financially responsible.

Every legitimate contractor should carry general liability insurance, workers’ compensation, and be properly licensed in your state or city. However, maintaining these credentials is costly, and one way less reputable contractors can offer a rock-bottom price is by skipping them altogether.

The risk? If a worker gets injured on your property and the contractor lacks proper insurance, you could be held liable. If something goes wrong with the work and the company disappears, you’ll have no recourse. A bargain isn’t worth exposing yourself to that kind of legal or financial risk.

Always ask for proof of:

  • Contractor’s license
  • General liability insurance
  • Workers’ compensation insurance
  • Bonding (for protection against incomplete work)

A reputable contractor will be happy to provide this.

Reputation and Longevity

When comparing contractors, it’s worth doing a little homework. Look into the company’s online reviews and ratings, check if they’re accredited with the Better Business Bureau, and see how long they’ve been in business.

 A contractor with a solid track record and strong reputation is more likely to stand behind their work and still be around for years if you ever need support or warranty service.

Low-Quality Materials

Another tactic used to lower bids is swapping out premium materials for cheaper, less durable alternatives. For example, using thinner siding, basic underlayment, or non-certified roofing shingles can drastically cut material costs but it also compromises performance and longevity.

A quality contractor will specify the brand and type of products they’re using and explain the difference between available options. You should feel confident that the materials being installed are designed to last and backed by strong warranties.

You Get What You Pay For—And Then Some

We understand the urge to save money where you can. But when it comes to something as important as your roof or siding, cheap can be costly.

Paying a bit more for:

  • Better materials
  • Experienced crews
  • Transparent communication
  • Reliable scheduling
  • Long-term warranties
  • And a contractor who will actually finish the job

...can make all the difference in the value, performance, and peace of mind your project brings.

It’s okay to ask, “Why is this bid so much lower than the others?” A trustworthy contractor will help you understand where the differences lie and explain why quality craftsmanship, reliable service, and peace of mind are worth the investment.

Protect Yourself: Think Long-Term

In a saturated market, it's easy to be lured in by the lowest bid. But behind that number may be a company that cuts corners, disappears when you need them, or leaves you with a home that’s only half protected.

Instead of choosing based on price alone, choose based on value. Ask questions. Compare scopes. Check credentials. And choose a contractor who cares more about doing the job right than just getting the job done fast.

At Pacific Exteriors, we believe in offering fair, honest pricing with no surprises. We don’t aim to be the cheapest—we aim to be the most trusted. Let’s talk about your project and make sure you feel confident in every step, from first estimate to final walkthrough.