Related Terms

Bid: An offer from a contractor to build your project for a fixed price, based on the cost he estimates from your drawings & specifications.

Building Permit: Written permission from the local building department for a contractor to begin a construction project. (Homeowners should only apply for a building permit if they are going to do the work.)

Change Order: A written agreement between the contractor and the customer to make a change or addition to the work described in the original contract. (This agreement should always include the cost of the change or addition.)

Cost Plus Contract: A contract to do a job for the cost of materials and labor plus a fixed percent for overhead and profit.

Draw Payments: A payment scheduled to the contractor based on the progress of the project.