A Guide to Three Basic Construction Terms and What They Mean for Your Project
In our article, “Understanding Your Construction Project: The Difference Between an Estimate and a Bid,” we explained how estimates and bids differ and why it’s so important to make sure you’ve received a detailed bid before choosing a contractor for your home construction or remodeling project. However, once you’ve received a bid from your potential contractor, there’s still a little more work to do! Before you can officially hire your new contractor, you also need to understand what quotes, contracts, and proposals are—and what they mean for your project.
What is a Quote?
Quotes function similarly to bids—however, the important distinction to understand is that a quote is effectively a bid your contractor will receive from his or her subcontractors and suppliers. The quote should be based on the specific details of your project (including the services you want completed and the materials you’re interested in), and it should typically be pretty accurate from the beginning unless you choose to change the scope of your project later on. Your contractor will use all of the quotes he or she receives from various subcontractors and suppliers to determine the labor and material costs that go into the final bid he or she creates for you.
What is a Contract?
A contract is an official document that you and the contractor will both sign that outlines the specific terms, conditions, and costs associated with your project. Typically, you should receive a contract after you’ve received and agreed upon a contractor’s particular bid—and the contract is the only document that you should actually sign. Much like contracts in any other type of business, a construction contract serves as a legal agreement between you and your contractor that defines the work to be completed and the costs you will pay.
For this reason, you should always feel comfortable asking your contractor to help you understand anything in the contract that you’re confused about or that you’d like to have more details on. A reliable, trustworthy contractor will do everything he or she can to make sure you fully understand what you’re signing before getting into the agreement.
What is a Proposal?
Some contractors will submit a proposal which, once signed, becomes a contract. In this case, you need to be certain the proposal is based on quotes and estimates the contractor has received from his or her subcontractors and suppliers. Always ask your contractor if the proposal contains finalized pricing details (including prices for the specific materials and services you’re requesting) before accepting the contractor’s offer. Make sure everything is detailed thoroughly in the proposal before signing because once you sign a proposal it becomes a legally binding contract.
When Should I Sign a Contract?
As we mentioned above, you should only sign a contract with a particular contractor after you’ve received detailed information on all of the costs (including both labor costs and material expenses) for your entire project. You should also take the time to carefully review the items in these documents and make sure that you’re receiving exactly what you requested.
Because contracts and bids are complex documents with lots of minute details inside, we always encourage our clients to ask questions and allow us to help them understand what’s included. At Schoenberg Construction, we believe it is important for contractors and clients to have a close, comfortable working relationship—and so we are happy to take the time to make sure that you fully understand what your project entails!
Craig Schoenberg is one of the best residential general contractors in St Cloud. He always gives honest, fair bids with no lowball, fake pricing. And there’s no sales pressure, EVER! He never uses cheap materials and never engages in sloppy workmanship. Plus, his company is known as one of the top construction companies in Central MN because he always insists on doing every job exactly right.
Give him a call today at 320-252-0911 for your no-obligation consultation.