How to Hire a Remodeling Contractor (Bids, Contracts, and Change Orders)

Hiring a remodeling contractor is about much more than liking their design ideas. The way they bid, structure the contract, and handle changes will make or break your budget and timeline. This guide walks you through what a solid estimate should include, how payments typically work, and the red flags that often lead to cost overruns.

Key takeaways

• Get detailed, written estimates from multiple contractors. Look for line-item breakdowns of labor, materials, allowances, and exclusions—not vague lump sums.
• Clarify what’s included vs. excluded before you sign. Hidden items like permits, demolition, disposal, and unforeseen repairs are common sources of surprise costs.
• Use a clear payment schedule tied to milestones, not vague dates. Avoid paying large sums upfront; deposits are usually a modest percentage of the total.
• Insist on a written change order process. Any scope change should be documented (with cost and time impact) and signed before work proceeds.
• Verify licenses, insurance, and references. This protects you if something goes wrong and helps you avoid fly-by-night operators.
• Beware of lowball bids and pressure tactics. Unrealistically low estimates, cash-only deals, or “today-only” discounts are major red flags.
• Plan a 10–20% contingency in your budget. Even with a great contract, remodeling often uncovers hidden issues in older homes.

Typical costs / fees (if applicable)

Remodeling costs vary widely based on project size, finishes, and where you live, but these are rough ballparks for labor and materials combined:

• Small projects (e.g., half bath refresh, minor updates):

  • Around $5,000–$20,000+
  • Cost drivers: fixture quality, plumbing/electrical changes, tile vs. vinyl, custom vs. stock cabinets.

• Standard bathroom remodel:

  • Around $10,000–$30,000+
  • Cost drivers: moving plumbing walls, custom tile work, heated floors, higher-end fixtures.

• Standard kitchen remodel:

  • Around $20,000–$70,000+
  • Cost drivers: cabinet quality, countertop material, layout changes, appliance level, lighting upgrades.

• Major kitchen / bath overhaul or multi-room update:

  • Around $50,000–$150,000+
  • Cost drivers: structural changes, moving plumbing or gas lines, custom cabinetry, high-end finishes.

• Full home remodel or large addition:

  • Often $100,000–$300,000+, and can go significantly higher
  • Cost drivers: square footage, structural work, roofing/siding, windows, mechanical systems (HVAC, electrical, plumbing), finish level.

Other fees and cost factors to expect:

• Design and planning fees

  • Some contractors include basic design in their bid; others charge separately.
  • You may pay a flat design fee or a percentage of project cost for design-build firms.

• Permits and inspections

  • Can range from a few hundred dollars to several thousand, depending on scope.
  • Ask if permits are included in the estimate or billed separately.

• Project management / general contractor markup

  • Contractors typically mark up subcontractor work and materials.
  • Markups often fall in a 10–30% range, but structure varies (fixed-price vs. cost-plus).

• Change orders

  • Changes you request or issues uncovered during demolition can add 5–20%+ to the original contract.
  • This is why a contingency budget is important.

• Cleanup and disposal

  • Debris removal, dumpster fees, and final cleaning may be included or separate line items.
  • Clarify whether haul-away and site cleanup are part of the contract.

What to expect (process overview)

1. Define your scope and budget

Before contacting contractors:

• List must-haves vs. nice-to-haves.
• Gather inspiration photos and a rough idea of materials (tile, flooring, cabinets).
• Set a realistic budget range and a separate 10–20% contingency.

Watch-outs:

• “We’ll figure it out as we go” is a recipe for change orders and cost creep.
• If your wish list far exceeds your budget, expect compromises on scope or finish level.

2. Find and pre-screen contractors

Look for:

• Licensed and insured remodeling contractors
• Experience with your type of project (kitchens, baths, additions, etc.)
• Strong recent reviews and references

Pre-screen by phone or email:

• Ask about availability for your target timeframe.
• Confirm they pull permits when required.
• Get a sense of their typical project size to ensure yours is a good fit.

Watch-outs:

• Contractors who won’t provide proof of insurance or licensing.
• Those who discourage permits for work that clearly needs them.

3. Get multiple detailed bids

Aim for 2–4 written estimates from contractors who have:

• Visited your home
• Taken measurements
• Discussed your goals and budget

A solid estimate should include:

• Scope of work: clear description of what’s being done in each room.
• Line-item pricing: labor, materials, and any subcontractor trades (plumbing, electrical, etc.).
• Allowances: placeholder budgets for items you haven’t chosen yet (tile, fixtures, appliances).
• Exclusions: what is specifically not included (e.g., painting, landscaping, furniture).
• Timeline: estimated start date and duration.

Watch-outs:

• One-page lump-sum bids with no detail.
• Estimates that are much lower than others without a clear explanation.
• No mention of permits, inspections, or cleanup.

4. Compare bids apples-to-apples

When reviewing:

• Normalize allowances: If one contractor budgets $2,000 for appliances and another $6,000, adjust mentally so you’re comparing similar quality levels.
• Check scope differences: One may include painting and lighting, another may not.
• Ask clarifying questions in writing and request updated estimates when needed.

Watch-outs:

• Choosing solely on lowest price instead of value, clarity, and communication.
• Contractors who won’t revise or clarify their estimate when asked.

5. Review the contract carefully

Once you choose a contractor, they should provide a formal contract. It should cover:

• Full scope of work and detailed description of materials/finishes (or clear allowances).
• Total contract price and how changes will be handled.
• Payment schedule tied to milestones (e.g., after demo, after rough-in, after cabinets).
• Start date and estimated completion timeframe.
• Responsibilities:
  • Who pulls permits
  • Who handles debris removal and final cleanup
  • Work hours, access, and protection of existing finishes
• Warranty terms on labor and materials (if applicable).
• Insurance and licensing information.

Payment structure norms:

• A modest deposit (often around 10–20%) to secure your spot and order materials.
• Progress payments based on clearly defined milestones, not just dates.
• A final payment held until substantial completion or punch list items are addressed.

Watch-outs:

• Requests for large upfront payments (e.g., 50%+ before work starts).
• Cash-only arrangements or refusal to provide receipts.
• No written contract, or a contract that’s vague about scope, price, or schedule.

6. Understand change orders

Change orders are written documents that modify the original contract. They should specify:

• What is changing (materials, layout, added/removed work).
• Cost impact (increase or decrease).
• Schedule impact (extra days or weeks).
• Signatures from you and the contractor.

Best practices:

• Never approve changes verbally only. Get them in writing before work proceeds.
• Track your total budget as change orders accumulate.
• Ask if there are cheaper alternatives when surprises arise (e.g., different materials or repair approaches).

Common triggers:

• You upgrade materials mid-project (e.g., higher-end tile or fixtures).
• Hidden issues discovered after demolition (rot, outdated wiring, plumbing problems).
• Code-required upgrades that weren’t visible before walls were opened.

Watch-outs:

• Contractors who start extra work without written approval.
• Change orders with vague descriptions like “additional work” and no detail.

7. During the project: communication and oversight

Once work begins:

• Schedule regular check-ins (weekly or at key milestones).
• Keep a running list of questions and punch list items.
• Confirm who your main point of contact is (project manager, owner, lead carpenter).

Good signs:

• The crew shows up when expected or communicates delays.
• The site is reasonably clean and safe at the end of each day.
• You receive updates on schedule and any issues promptly.

Watch-outs:

• Repeated no-shows without explanation.
• Major substitutions of materials without your approval.
• Requests for extra payments not tied to agreed milestones.

8. Final walkthrough and closeout

Before final payment:

• Do a detailed walkthrough with the contractor.
• Test:
  • Doors, drawers, and windows
  • Faucets, drains, and fixtures
  • Lights, outlets, and switches
• Note any issues (touch-ups, adjustments, missing items) in writing.

Ask for:

• Lien releases from major subcontractors/suppliers (where applicable).
• Copies of warranties, manuals, and paint colors.
• Final inspection approval if permits were required.

Hold back the final payment until agreed punch list items are completed or scheduled.

DIY vs. hire a pro (or self-serve vs. professional)

Remodeling often involves structural work, plumbing, electrical, and sometimes gas lines. These areas can affect safety, insurance, and resale value.

When DIY might make sense

For some homeowners with tools and basic skills, DIY can be reasonable for:

• Cosmetic updates:
  • Painting walls and trim
  • Installing simple shelving
  • Replacing cabinet hardware
• Minor fixture swaps:
  • Replacing faucets or showerheads (if connections are straightforward)
• Demo and prep work, if done safely:
  • Removing old carpet or non-load-bearing trim
  • Carefully taking out cabinets (avoiding electrical/plumbing)

Even then:

• Wear proper safety gear (eye protection, masks, gloves).
• Be cautious about dust, lead paint, and asbestos in older homes.

When to hire a pro

It’s strongly recommended to use a licensed professional for:

• Structural changes
  • Removing or altering walls
  • Modifying beams, joists, or roof structure
• Electrical work
  • Adding circuits, moving outlets, upgrading panels
  • Anything beyond simple fixture swaps
• Plumbing changes
  • Moving drains, supply lines, or vent stacks
  • Adding new bathrooms or relocating kitchens
• Gas lines and HVAC
  • Running or moving gas lines
  • Modifying ductwork or installing new systems
• Work requiring permits and inspections
  • Many remodels must meet building codes and be inspected for safety.

Why pros matter:

• They understand code requirements and can help you pass inspections.
• Mistakes in structural, electrical, or plumbing work can be dangerous and costly to fix.
• Professional work is often expected by buyers and appraisers when you sell.

You can blend approaches: hire a contractor for the core work and do some finishing tasks (like painting) yourself, if the contractor agrees.

Questions to ask before you commit

Use these questions when interviewing and before signing:

• Are you licensed and insured for this type of work, and can you provide proof?
• How many projects like mine have you completed in the last couple of years?
• Will you be using your own crew, subcontractors, or both? Who supervises daily work?
• What exactly is included in this estimate, and what’s specifically excluded?
• How do you handle permits and inspections—will you pull them, or is that on me?
• What is the payment schedule, and what milestones are payments tied to?
• How do you handle change orders, and how will I approve additional costs?
• What is the estimated start date and duration, and what could delay the schedule?
• How will you protect my home (floors, dust control, pets, kids) during the project?
• What warranties do you offer on your labor, and what’s covered by manufacturers?
• Can you share recent references or projects I can see (photos or in person)?
• Who will be my main point of contact, and how often will we communicate?

Quick FAQ

How many bids should I get for a remodel?

Most homeowners are well-served by 2–4 detailed bids from qualified contractors. Fewer than two makes it hard to compare pricing and scope; more than four can become confusing and time-consuming.

Is it normal for the final cost to be higher than the estimate?

It can be, but it shouldn’t be a surprise. Well-managed projects may still run 10–20% higher due to upgrades or hidden issues. Clear contracts, written change orders, and a contingency budget help you stay in control.

How much should I pay upfront?

Policies vary, but many reputable contractors ask for a modest deposit (often around 10–20%) to secure your spot and order materials. Be cautious of anyone asking for very large upfront payments before work begins.

Do I really need permits for interior remodeling?

Many interior projects that involve structural changes, electrical, plumbing, or mechanical work require permits and inspections. Skipping permits can cause problems with safety, insurance, and resale. A good contractor will advise you and typically handle this process.

Wrap-up / next steps

Hiring the right remodeling contractor is about clear expectations, solid paperwork, and steady communication, not just design ideas or price. Take time to:

• Define your scope and budget with a realistic contingency.
• Get 2–4 detailed, written bids and compare them line by line.
• Make sure your contract, payment schedule, and change order process are all in writing before work starts.

If you’re ready to start, you can use Home Services Scout to compare local remodeling pros, check reviews, and request multiple quotes in one place. Seeing a range of options—and how each contractor structures bids and contracts—will help you choose the partner that keeps your project on time and on budget.