What Documents Should I Ask for When Hiring a Contractor?

Renovating your home is often a major project, but it can also yield big rewards. This process can help give you the home you've always wanted and also increase its resale value in the process. One of the most important aspects of any home renovation project is hiring a contractor to lead the job. But before you sign on the dotted line, you should make sure that your contractor provides you with the paperwork you need to protect yourself and your home.

Here, we outline each piece of paperwork you should request from your contractor to ensure your home renovation project goes as smoothly as possible.

Contract Agreement

Your contract agreement is one of the most essential documents you'll receive. It's the principal agreement between you and your hired contractor, and it's the main document that most of your other documents will attach to or reference. Contract agreements often contain paperwork such as a description of your project, payment and deposit information, the scope of work, and the construction schedule.

Construction Schedule

This document outlines your project's timeline, helping to ensure you and your contractor agree on your project's intended completion date. It should include information on the project's entire duration, including start and finish times for each phase of the project. 

Speaking of phases, this document should break them down, outlining the time, resources, activities, and building permits needed for each phase.

Scope of Work

Also known as the statement of work, the scope of work defines what will happen during your home renovation. It should include information on which contractors and subcontractors are responsible for each component of the work, the techniques and methods they'll use, and what materials they'll incorporate. The document should also outline how to handle any change orders.

Detailed Cost Estimates

Prior to starting your project, make sure your contractor shares detailed soft and hard cost estimates, so you know exactly where your money is going.

Hard Cost Estimates

Hard cost estimates outline the physical construction costs, including labor and materials. Common hard cost examples include landscaping, cement, and carpentry costs. 

Soft Cost Estimates

Soft costs are the construction expenses that aren't related to materials or labor. Common soft costs include permits, taxes, and accounting fees. 

Bonds and Insurance

Bond and insurance paperwork can help protect you and your home in case something goes wrong during your renovation. 

Bond

A bond serves as an agreement between you and your contractor that they will complete the project as intended. Bonds help to protect you against financial loss should your contractor fail to complete the project to the contract's specifications. Your contractor will purchase a bond from a surety company, and they should give it to you to sign before beginning the project. 

Insurance and Workers' Compensation

Before starting your project, your contractor should also provide proof of general liability insurance and workers' compensation. These documents are usually attached to the contract agreement. General liability insurance covers any damage to your home as a result of the project, while workers' compensation pays workers who get injured on the job. 

Construction Drawings

The construction drawings show the final design of your project. These typically include detailed depictions of each design component, including walls, elevations, cabinetry, hardware, and ceiling plans. These drawings may be altered throughout the project to account for any change orders or mark-ups. 

MasterFormat Outline

Although not required, a MasterFormat Outline is produced by the Construction Specification Institute, and it serves as a standard way to organize specific documents. It outlines common construction standards and approved project deviations and materials, as well as the testing required for all materials. 

Contractor's License

Make sure that your contractor provides you with an updated copy of their license along with the rest of the paperwork. Renovation projects can take quite a while to complete, so you'll want to be sure your contractor remains licensed for the job throughout your project. 

Cost to Hire a Contractor

The cost to hire a general contractor depends on the project. Most reputable contractors charge 10% to 20% of the overall project cost. For example, the average cost to build a house is $323,000. If you hire a general contractor to manage a build with that budget, plan to pay $32,300 to $64,600 for their labor.

DIY vs. Hiring a Pro

A handy homeowner may opt to complete parts of a home construction project as a DIY to save on the 10% to 20% rate that general contractors charge. In these cases, DIY costs consist mainly of materials, tools, and time.

However, the more complex the project, the more difficult it becomes to DIY. Not only do you have to handle a wider variety of tasks on your own, but you also have to hire subcontractors for any work that is either too dangerous or too technical for your skill set.

This can include electrical, plumbing, HVAC, and structural tasks, which often require the cost to pull building permits and specific licenses to adhere to building codes in most places. For these reasons, we recommend hiring a licensed general contractor near you to manage an extensive new build or renovation.