Top Things You shouldn’t Overlook In your contract

📝 Don't Sign Yet!

The Must-Have Elements in Your Custom Home Construction Contract

A free guide to protect your home, your budget, and your peace of mind.

Building your dream home?

Your construction contract is more than paperwork — it’s your roadmap, safety net, and legal protection all rolled into one. A vague or incomplete contract can leave you exposed to delays, hidden costs, and finger-pointing when things go wrong.

Before you sign anything, make sure your contract includes these essential components.

✅ 1. Scope of Work

A detailed breakdown of what’s being built, including square footage, foundation type, exterior materials, interior finishes, number of bedrooms/bathrooms, and any custom features. Anything you do not specify from the start could cause cost overruns after construction begins.

🔎 Why it matters: Without a clear scope, your builder may interpret things differently — and you could end up paying more for items you assumed were included.

✅ 2. Estimated Start & Completion Dates

Your contract should list an anticipated start date and a targeted completion date based on current scheduling and permitting timelines. These dates are not guarantees but should reflect a reasonable timeframe.

🔎 Why it matters: Even though delays can happen (due to weather, permitting, or material availability), having an estimated timeline gives you a realistic idea of when your home might be finished — and helps you plan ahead.

✅ 3. Total Project Cost and Payment Schedule

You should fully understand the costs associated with your project, when and how your payments must be made and what type of pricing structure is used for your project. Is the contract a Cost-Plus or Fixed Price structure?

🔎 Why it matters: This helps you make sure you fully understand your responsibilities and helps you plan on when and how to have your finances in order.

✅ 4. Detailed Allowances for Selections

If finishes like cabinets, countertops, lighting, or flooring aren’t finalized, make sure the contract includes dollar amounts for those categories. In a perfect world, you have the details completely vetted out and estimated accurately. If not, make certain you have an adequate allowance and that it is reasonable for your desired finishes.

🔎 Why it matters: Keeps your budget realistic — and lets you know what upgrades will cost more.

✅ 5. Change Order Policy

Clear rules about how changes are made, documented, and priced — with required written approvals.

🔎 Why it matters: Verbal changes lead to confusion. A written policy keeps everyone aligned.

✅ 6. Builder Warranty and Post-Construction Service

The contract should spell out what’s covered after move-in, for how long, and how to request service.

🔎 Why it matters: You should know the details and don’t leave this info up for debate.

✅ 7. Dispute Resolution Clause

Outlines how disagreements will be handled — through mediation, arbitration, or legal action. No one wants to disagree but a home is a tremendous investment and a huge project for a builder. If there is an area in which you don’t see eye-to-eye, you should know the proper path to resolution.

🔎 Why it matters: Prevents costly and drawn-out court battles if things go south.

✅ 8. Termination Clause

Defines how either party can cancel the agreement, under what conditions, and what fees or costs may apply.

🔎 Why it matters: Life happens. This clause protects both you and your builder.

✅ 9. Insurance and Permitting Responsibility

Confirms the builder will carry appropriate general liability and workers’ comp insurance, and pull all required permits. You should also ask if you should purchase the Risk Insurance policy or if your builder will do so. Lenders often require this policy and it should not be overlooked.

🔎 Why it matters: You don’t want to be on the hook for accidents or fines.

✅ 10. Jobsite Access and Communication Expectations

Clarifies when and how you can visit the site, who your main contact is, and how updates will be shared.

🔎 Why it matters: Keeps communication professional and prevents misunderstandings.

🛑 Before You Sign…

Even reputable builders can overlook these details if you don’t ask. This guide gives you the confidence to review your contract like a pro and protect what matters most.

🎁 Want a Printable Construction Contract Checklist?

Download your FREE checklist to keep these key items in front of you during contract review.

At Beckman Construction, we believe informed clients make the best partners. Let us walk you through what your contract should include — no pressure, just guidance.