In general, most people's honest estimates are lowballing it. :)

Seriously though, you want to give an honest estimate. What helps at the sales stage is providing _context_ for the estimate. In other words, don't just quote a figure, break the job down into a project plan with time/cost estimates for each section.

When I was consulting and going after large, somewhat ill-defined projects, I found it was often possible to sell the client on a short (1 to 2 week) engagement to look into their problem, drill down on the unknown bits and make them known, and deliver them a project plan and a set of time/cost estimates that they could then use to better solicit bids. Yes, we usually got the development work on those gigs, but it was a separate project.

In the start of your career if you're young, most would lowball as a last resort, if you have a medium to large body of work in your portfolio, probably be honest.

Make sure to account / factor in for equipment, taxes, family, rent, etc in your cost estimates, as they say estimation in software is hard.

If you lowball, IMHO you're not being honest with yourself and you may not be motivated to do the job. It is also hard to negotiate higher if you keep lowballing estimates with your clients in the long run.

How do you factor in family, rent, etc.? Do you multiply everything by say 1.25? Or do you actually put these line items in your proposal?

As a freelancer, you will live or die based on reputation. Protect your reputation above all else. This means, among other things, avoiding the instinct to lowball estimates. If you struggle with developing accurate estimates, it's better to err on the side of too high than too low.

Presenting a client with a bill that comes in less than what you estimated is pure win for everyone.

My advice: ask prospective clients about budget, scope, and timeline. Your estimate should account for all of them and describe contingencies and their impact on the budget, scope, and timeline.

If you can, avoid working with people who balk at discussing budget, scope, timeline, and contingencies. It is at best a sign of inexperience.

But in the end, the three most important things are:

  1. Get the job.
  2. Get the job.
  3. Get the job.

Good luck.

Nothing will kill your business like dishonesty, a lesson I had when I had a business partner that people didn't trust.

But aren't most estimates low?

There is low and honest and low and dishonest.

It's one thing to quote a low fixed price and take the risk yourself but boy do you need some mechanism to prevent the customer from making too many changes.