General contractors and remodelers have their own unique terminology to discuss the home improvement process. Here are some frequently used construction terms homeowners should know:
Bid – A bid is the price a general contractor proposes to complete a construction project. Compare multiple bids to find the best value.
Building Permits – Building permits are required for most major home renovations to ensure the work complies with local codes and regulations. Permits are obtained from the local building department.
Change Orders – Change orders are formal requests to alter the original scope of work described in the contractor agreement, whether adding, modifying or omitting items. Change orders affect project cost and schedule.
Construction Draws – Draw payments are periodic partial payments to the contractor as work progresses. Payments are made against actual completed work, with a portion held back until project completion.
General Contractor – A general contractor oversees home remodeling projects, including hiring and managing subcontractors, getting permits, scheduling inspections, and quality control. They may self-perform some work.
Subcontractors – Subcontractors are trade specialists hired by the general contractor to perform specific project tasks like plumbing, electrical, drywall, painting, etc.
Punch List – A punch list documents minor unfinished or defective work the contractor needs to complete prior to final payment. Items are identified during a walkthrough near project completion.
Retainage – Retainage is a percentage of each construction draw held back until the project is fully finished and any punch list items are completed. Retainage provides financial incentive for the contractor to complete the project.
Schedule of Values – This document breaks down the contract amount across each phase and trade of work to allocate payment draws accordingly as sections are completed over the course of the project.
Scope of Work – The scope of work specifically details the project tasks, specifications, materials, timelines, deliverables and other expectations agreed upon between homeowner and contractor.
Permits – Building permits must be obtained from the local permitting office before starting major renovations to comply with building codes and zoning laws. Electrical, plumbing and mechanical work usually also require permits.
Warranty – A warranty covers defects in materials and workmanship for a set period after project completion. The builder warranty protects the homeowner against poor quality work or materials.
Lien Release – A lien release is a document signed by the contractor stating they have been paid in full and waive all construction lien rights to the property. Lien releases protect the homeowner.
Payment Schedule – A payment schedule outlines the specific timing and dollar amounts for construction draws to occur over the course of the project based on progress milestones.
Project Milestones – Major milestones are designated completion points during the project where inspections occur before approving payment draws, such as foundation poured, framing finished, mechanicals roughed in, etc.
Site Supervisor – The site supervisor oversees day-to-day activity and workers on the job site. They monitor construction progress and quality control.
Mobilization – Mobilization is the process at the start of a project of getting equipment, materials and workers staged and set up at the job site to begin work.
Home Remodeling Process
Major remodeling projects involve the following typical phases:
Initial Consultation and Estimates – The homeowner provides the desired scope of work and contractors visit the site to provide project estimates and recommendations.
Finalizing Project Scope and Contract – Once a contractor is selected, the homeowner works with them to finalize specifications, materials selections, project schedule and contract terms.
Securing Permits – The contractor applies for all necessary construction permits for the project from local building departments. Permits must be displayed on-site.
Construction and Project Management – The contractor completes the project based on the scope of work, maintaining frequent owner communication and coordinating inspections.
Inspections – Local building inspectors review completed work at milestones to ensure compliance with building codes and permit requirements.
Completion and Payment – For final payment, the owner performs a walkthrough, approves completed work, and releases payment after resolving any punch list items.
Understanding the terminology and process will help homeowners work more efficiently with contractors on their remodeling projects. Be sure to communicate regularly, get all project expectations in writing, and don’t make final payment until fully satisfied.