Written estimates and home repair contracts: what belongs on paper

Most home repair disputes aren't about bad people. They're about two people remembering a conversation differently. You thought "new fixtures" meant the nice ones you pointed at. They thought it meant whatever was in the truck. You thought the old cabinets would be hauled away. They didn't.

Paper fixes that. A good estimate and a good contract put the whole job in one place, so there's nothing to argue about later. Here's what to ask for, in plain language.

Estimates first: get more than one

The Federal Trade Commission recommends getting written estimates from several contractors. A useful estimate describes:

• the work to be done,
• the materials,
• the completion date, and
• the price.

The FTC also says not to automatically choose the lowest bidder, and to ask for an explanation if there's a big difference between estimates. A much lower number often means something got left out: cheaper materials, no permit, no cleanup, or a plan to make it up later with change orders.

When you compare, line the estimates up item by item. If one includes demolition and haul-away and another doesn't, you're not comparing the same job.

Why you want a contract even if your state doesn't require one

Contract rules differ by state. The FTC's advice is simple: even if your state doesn't require a written agreement, ask for one.

Some states set specific rules. California, for example, requires a written contract for home improvement projects over $500 in combined labor and materials, and its Contractors State License Board publishes a consumer guide spelling out what those contracts must include. Your state may have its own thresholds or required language, so check with your state's contractor board or consumer protection office.

What belongs in the contract

Pulling together the FTC's checklist and the California board's guide, a solid home repair contract covers the who, what, where, when and how much:

1. Who. The contractor's name, address, phone number and license number (where licensing is required).
2. What. A clear description of the work and the specific materials, including brands, models or grades if they matter to you.
3. Where. The address and which parts of the property are involved.
4. When. Estimated start and completion dates.
5. How much, and when you pay. The total price and a payment schedule for the contractor, subcontractors and suppliers.
6. Permits. Who is responsible for getting them. The FTC lists the contractor's obligation to get all necessary permits as a contract item, and Georgia's Attorney General says the contractor should pull the permit under their own name or business name.
7. Promises. Anything said out loud about scope, labor or materials. If it was promised, it goes in writing.
8. Cleanup. The California guide suggests spelling out everything you've agreed to, up to complete cleanup and removal of debris, plus special requests like saving certain materials.
9. Warranties. What's guaranteed and for how long.
10. Your right to cancel. If you sign at home or somewhere other than the seller's permanent place of business, the FTC says the contract should include a written statement of your right to cancel within three business days.

Then the last rule, which matters more than it sounds: no blank spaces. Fill them in or draw a line through them before you sign. A blank space is an invitation for someone to add terms later.

Change orders: put every change in writing

Plans change once walls are open. That's normal. What causes trouble is changing them with a nod and a handshake.

The California board's guide says any changes to the contract should be in writing too, as change orders, kept with the rest of your project paperwork. Each change order should say what's changing, how it affects the price, and how it affects the schedule. Both of you sign it before the extra work starts.

Paying in stages

How you pay is part of the protection.

• Keep the deposit reasonable. The FTC notes some states limit how much a contractor can ask for as a down payment. Your state or local consumer agency can tell you the limit. Georgia's Attorney General, for instance, suggests limiting a down payment to no more than 25 percent of the contract price and holding back 10 percent until the work is satisfactorily done.
• Tie payments to finished work. The FTC suggests making payments contingent on completing defined amounts of work. If the job falls behind, so do the payments.
• Don't pay cash. For smaller jobs, the FTC suggests paying by check or credit card.
• Hold the final payment until the work is done and you're satisfied.

Keep a project folder

Paper only helps if you can find it. Keep one folder, paper or digital, with:

• every estimate you received,
• the signed contract and all change orders,
• permits and inspection results,
• receipts, invoices and proof of payment,
• photos before, during and after,
• notes from phone calls with dates.

If there's a dispute, the FTC recommends following phone calls with a letter by certified mail, return receipt requested. Your folder makes that letter easy to write.

Frequently asked questions

The contractor says a handshake is fine for a small job. Is it?

It may be legal in your state for small jobs, but you lose your best protection. Even a one-page written agreement with the price, the scope and the dates is better than nothing.

Should I ever sign papers after work has started?

Be cautious. The FTC warns about contractors who start work and then rush homeowners into signing documents, sometimes loans against the home. Read everything, and never sign something with blanks or in a language you don't understand.

What if the contractor won't put a promise in writing?

Treat that as your answer. If they won't commit to it on paper, plan as if it isn't included.

Where do I go if we can't work it out?

Start with the contractor and a certified letter. After that, the FTC points to your state attorney general or local consumer protection office, your local home builders association, and dispute resolution programs. If the contractor is licensed, the licensing board may take complaints too.

Contract rules vary by state. Check with your state's contractor licensing board or consumer protection office before you sign anything large.