Construction Terms & Abbreviations
In Plain English

A dollar amount included in a bid for items not yet fully specified, like fixtures or finishes. Be careful. Allowances are often set too low and can cause your final cost to go way over budget. Always ask what happens if the actual cost is higher.

Drawings that show how a structure was actually built, including any changes made during construction. Important to have for future renovations or selling your home.

A written offer from a contractor stating what they will do and how much it will cost. Always get at least three bids before choosing a contractor.

A written document that changes the original scope, cost, or timeline of your project after work has started. Every change order should be signed by both you and the contractor before any additional work begins.

A document proving a contractor has active insurance coverage. Always request this before any work starts on your home.

Extra money set aside in a budget for unexpected costs. A good rule of thumb is 10-15% of your total project budget.

A legally binding agreement between you and your contractor outlining exactly what work will be done, for how much, and by when. Never let work start without a signed contract.

The removal of existing structures, walls, flooring, or materials to make way for new construction.

A payment plan that outlines when and how much you pay the contractor at different stages of the project. Never pay more than 10% upfront.

A drawing showing the vertical face of a structure, like what a wall or exterior will look like straight on.

Movable items that are not permanently attached to a building. Make sure your bid specifies exactly what brands and models are included.

The final details of a project like trim, paint, flooring, and fixtures. Often where corners get cut on lower bids.

Extra time built into a project schedule to account for delays. If a contractor has no float in their schedule, any delay causes problems.

The main contractor who oversees your entire project and hires and manages subcontractors.

A special electrical outlet that cuts power instantly if it detects a ground fault. Required by code in bathrooms, kitchens, and outdoor areas.

The slope or level of the ground around your home. Proper grading directs water away from your foundation.

A legal claim against your property by someone who worked on it and was not paid. Always get lien waivers from contractors and subcontractors when you make payments.

A document signed by a contractor or subcontractor releasing their right to file a lien against your property after being paid. Request these with every payment.

A wall that supports the weight of the structure above it. Removing a load bearing wall without proper support can cause serious structural damage.

The three main building systems that run through your walls and floors. Changes to any of these systems usually require permits.

Items or work that are specifically excluded from the contractor's bid. Watch for this. It means you will need to pay for it separately or hire someone else.

A formal written notice telling the contractor they are authorized to begin work.

Official government approval required before certain types of construction work can begin. Work done without a required permit can cause serious problems when you sell your home.

A list of small items that need to be completed or fixed at the end of a project before final payment is made. Never make your final payment until the punch list is complete.

A formal question from a contractor asking for clarification on the project plans or specifications.

The early stage of installing plumbing, electrical, or HVAC systems before walls are closed up.

A legal right to use someone else's land for a specific purpose, like a utility easement.

A detailed description of exactly what work will be performed. Vague scope of work is one of the biggest causes of disputes and cost overruns.

Detailed written requirements for materials, products, or workmanship. Always ask for specs on major materials in your bid.

A specialist hired by the general contractor to do specific work like electrical, plumbing, or tile. You typically do not hire subcontractors directly.

The point at which the project is complete enough for its intended use, even if minor items remain. This often triggers final payment terms.

A pricing method where you pay for the actual time and materials used rather than a fixed price. Can lead to unpredictable costs. Request a not-to-exceed cap.

Items in a bid that have not yet been decided or priced. TBD items in a bid are a red flag. Always ask for specifics.

A project where the contractor handles everything from start to finish and hands you a completed project ready to use.

Finding ways to reduce costs while maintaining quality. Can be legitimate cost saving or can mean cutting corners. Always ask what specifically is being changed.

A guarantee that the work performed will be free from defects for a specified period. Always ask for warranty terms in writing.