Five Questions to Ask a Contractor Before You Sign the Quote

You have the quote in front of you. The contractor seems competent. References checked out. The number is high but you can live with it. They are waiting for an answer.

This is where most homeowners go quiet. You don't want to seem difficult, but you also don't want to find out three weeks in that the price was thin and the real cost is 20 percent higher. The fastest way through it is five short questions. They take a few minutes to ask. The answers tell you almost everything about how this project will run.

1. Is this a fixed-price quote or cost-plus, and why?

Two main ways a contractor can price your job. Fixed-price means the total in the quote is what you pay, except for changes you approve in writing. Cost-plus means you pay actual material and labor cost, and the contractor adds a percentage on top, usually 10 to 20 percent.

Each one fits a different kind of project. Fixed-price works for jobs with clear scope, like a kitchen with no layout change. Cost-plus is more honest for jobs where surprises behind the walls are likely, like a 1950s bathroom or a full gut of an older home.

A good answer is direct. "This is fixed-price because we have done dozens of these and we know what is behind your walls." Or "I would recommend cost-plus on this one because your house is from 1962 and we will not know what we will find until we open it."

Red flag: a contractor who can't explain which one they are using, or who shifts between the two during the conversation. Also be careful with hybrid quotes that look fixed-price but contain cost-plus language buried in the contract. Ask them to point to the exact clause that defines how the final number is calculated.

2. What's your change-order policy?

This is the most important question on the list. Industry data from Gordian shows change orders typically add 8 to 14 percent to the final cost. On about a quarter of all projects they go past 10 percent. The size of that swing depends entirely on how change orders are handled, and that is set by your contract.

A fair policy is short. Every change order is written, not verbal. Every one needs your signature before any work starts. The contract spells out the markup the contractor adds on change-order work, usually 15 to 25 percent above standard pricing.

Good answer: "I write up every change as a short addendum. It lists the cost and the reason. Nothing happens until you sign it." Some contractors will also share a sample change order from a past job.

Red flag: "We will handle it as we go" or "It is all covered under the main contract." Both mean the contractor can bill you later for things you never agreed to, and the contract gives you nothing to push back with.

For more on the kinds of costs that turn into change orders mid-project, see Five Hidden Costs of a Home Renovation.

3. Are permits and inspections separate lines on this quote?

Permits aren't optional on most residential renovations. The fee depends on your city and project size. A simple electrical permit can be $150. A full kitchen remodel permit package can easily run $1,500 to $3,000. The 2026 national average is around $1,688 per Angi.

The problem isn't the cost. It is how the cost gets hidden. Some contractors fold permits into a vague "fees and overhead" line. Others leave them off the quote entirely and hand you the city's bill after work starts. By then you have already signed.

What you want to see is a dedicated permit line with a real number on it. Not a placeholder, not "TBD."

Good answer: "Building permit is $1,200 on line 14, plus electrical sub-permit at $180 on line 15. I pull both, and the city inspections are scheduled into our timeline."

Red flag: "We will figure that out later" or "permits run a few hundred bucks." Anything vague here means the cost will land on you as an extra later.

Worth asking right after this: "What code upgrades do you expect this job will trigger?" Touching electrical, plumbing, or HVAC during a renovation often means parts of the system have to be brought up to current code. A good contractor has a rough idea on day one. A weak quote ignores this and you will see it as a change order. More on that pattern in How to Tell If a Contractor's Estimate Is Too High.

4. What's the payment schedule, and what's the deposit?

Most contractor disputes start here. A contractor who wants 50 percent upfront on a $30,000 job is asking you to fund their cash flow. That is not your problem to solve. Once you have paid that much, you have no leverage left if anything goes wrong.

Deposits typically run 10 to 20 percent of the contract, with 33 percent being the high end of what is reasonable. Some states regulate this directly. California is the strictest. Under Business and Professions Code Section 7159.5, the maximum deposit a licensed home-improvement contractor can require is $1,000 or 10 percent of the contract price, whichever is less. Not whichever is more. On a $30,000 bathroom remodel in California, the legal maximum deposit is $1,000.

Most other states have no statutory cap, so the 10 to 20 percent norm applies. The rest of the money should be tied to progress, not the calendar. A typical schedule looks like:

• 10 to 20 percent deposit on signing
• 25 to 30 percent at material delivery or start of demolition
• 25 to 30 percent at a clear midpoint (rough-in passed inspection, drywall up)
• 10 to 15 percent at substantial completion
• 5 to 10 percent final payment after the punch list is closed and final inspection passes

Good answer: a written draw schedule tied to specific milestones, with the final payment held back until your punch list is done.

Red flag: anything that asks for more than 33 percent upfront, or any schedule that has you fully paid before the job is finished. Once the contractor has the money, getting them back to fix a problem becomes a phone-call campaign.

5. Are you licensed and insured for this job, and can I see proof?

This is the simplest question and the one most homeowners skip. Every state has a contractor licensing board, and most license records are public. Insurance is a separate question: a license doesn't mean the contractor carries general liability and workers' compensation coverage.

You want to see three documents. The contractor's state license, valid and active. A current certificate of general liability insurance. A current workers' comp certificate if they have employees on the job (in most states this is required by law).

Good answer: they hand you copies or email them within the day. The license number can be checked online. The insurance certificates list your project address as the certificate holder, with policy numbers and expiration dates you can verify with the insurer directly.

Red flag: any version of "I am covered, don't worry" without paperwork. If a worker gets injured on your property and the contractor doesn't carry workers' comp, your homeowners insurance becomes the next stop. That is a six-figure problem you do not want.

In Florida you can verify licenses at the DBPR portal. Other states have similar boards under names like Department of Consumer Affairs or Contractor Licensing Board. A quick search for "[your state] contractor license lookup" gets you there.

Use the Pre-Signing Checklist

The simplest way to keep all five questions in mind during the next contractor conversation is to run your project through estimate4u.io first. Every estimate comes with a Pre-Signing Checklist of questions specific to your project that you can take straight into the call. The tool also gives you a line-item breakdown of materials and labor by category, based on current US market data, so you have your own number to compare against the contractor's quote.

It is free and takes about two minutes.

A fair contractor will answer all five of these questions clearly and will respect that you asked. A contractor who gets defensive or vague on more than one of them is telling you something about how the project will run if you sign. Better to find that out now than three weeks in.

For a deeper checklist of red flags inside a contractor's quote itself, see How to Tell If a Contractor's Estimate Is Too High. For a real Florida project breakdown with permits, inspection, and labor lines, see How Much Does a New Roof Cost in Florida in 2026?.

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Sources

• Gordian, Change Orders Impact on Construction Projects
• Angi, Building Permit Cost 2026
• California CSLB, Home Improvement Contracts (B&P Code § 7159.5)