The Benefits of a Pre-Construction Agreement
Would you let your mechanic tell you what’s wrong with your car without even looking under the hood? No. A Pre-Construction Agreement is exactly that, it is the contractor’s version of looking under the hood to see what exactly the project is going to entail. The agreement allows your contractor to clearly define the scale of work as well as engineer and fully specify all details of your project from start to finish. Not a fan of surprises? You’re going to want a pre-construction agreement. A pre-construction agreement will help your contractor, sub-contractors, and you fully understand the cost, contract, and scope of work.
How Much Does a Pre-Construction Agreement Cost?
Early in the process – we will get the question “how much does this agreement cost”. There are many different factors, every project and client is unique. So, we try to give you a good understanding of what that pre-construction agreement is going to cost in that initial meeting.
For example, we may ask the following questions to accurately estimate the scope of work:
- Does your project need structural engineering?
- Does it need civil engineering?
- Are we doing an addition on a hillside lot?
Most projects typically run between 5-10% of the whole project. Contractors typically have a $1,500-$6,000 weekly retainer off of which they will work, billing weekly. Your contractor should be providing a detailed invoice weekly or bi-weekly, outlining how much they have spent that week, hourly, in-house, category 2 and 3 costs such as outside elements, structural and civil engineering, architecture, design, etc.) all covering the contractors’ portion of the Pre-Construction Agreement.
Do I have to sign the Pre-Construction Agreement?
Your contractor should not make you sign the Pre-Construction Agreement upfront. In our case, if you’re interested in remodeling your home, business, or building a new custom home on your lot, we would like to do is at least start off with a phone call or come into the office and speak to us.
During this initial conversation, it is our goal to learn about your project, priorities, and what you are looking for in your experience and your building project. By the end of that conversation, if we feel like we’re going to be a good fit for you and your project we will set up an initial consultation where we meet with you on-site for about an hour to dive deeper into the project, priorities, what you’re looking for. That way we can help come up with a plan that makes sense moving forward.
At this point, both parties should know if they would like to move forward working together. If for whatever reason you decide not to use us that is completely okay. However, if you do decide to move forward with us, that is when the Pre-Construction Agreement comes in.
In our experience, Pre-Construction Agreements save time, money, and the ever-dreaded “do and redo” that no one wants to deal with during a residential construction project. We recommend signing a Pre-Construction Agreement with any contractor you work with.