What's the difference? An estimate is a general approximation of the expected cost of a project but it's not a fixed contract price. We recommend you talk to several contractors to seek general estimates for the work - typically the response will include a substantial number spread. An estimate allows you to decide that it's worth continuing the discussion with that particular contractor, or it'll tell you that they are not best suited for your job.
A bid is the next stage: it's a contractual offer that promises to complete a specified range of tasks for a specific price. We recommend you choose just one contractor to prepare a detailed bid based on their preliminary estimates, and only after they have satisfied all your other criteria.
Negotiated bid. Together with the drawings and the specifications, the bid is the critical document which will be the basis of the contract between you and your builder. We recommend an open-book bid negotiated with a single contractor - this will enable the contractor to act as cost consultant on the job, working cooperatively to secure the best value from your construction dollar. Within that structure the contractor may seek competitive pricing from several subcontractors to achieve the best overall price structure.
Competitive bids. From long experience of the problems that can result we do not endorse the common practice of seeking multiple formal bids for a residential general contract. It takes time and trouble to prepare an accurate bid and if your contractor knows they are not the only bidder they will be less likely to give it the care and attention it requires. Multiple simultaneous bids make you vulnerable to a contractor 'buying the job' - deliberately underbidding with the full intention of figuring a way to make it pay later on. A low bid can also seduce you into hiring a contractor that your instincts and your brain are telling you is not a good fit. These are situations which can lead to increased design and supervision costs and often result in serious problems and bad feeling later on.