Detailed Scope of Work

Suppose you’ve purchased a property that requires some level of rehab. In that case, you will need to put together a Detailed Scope of Work to accompany your request for contractor bids.  A Detailed Scope of Work lists all the renovations that need to be completed at a property to increase its value and profitability.  This list should consider the comps used for determining the property’s ARV.  What renovations need to be done to bring the property to the ARV used in your calculations?  

The importance of creating a Detailed Scope of Work is that it establishes a clear project plan for your rehab resulting in more accurate contractor proposals.  It ensures that all contractors are bidding on the same project work.  It also minimizes change orders and disputes once the project has started, and it maximizes profits.  

When writing your Detailed Scope of Work, the following should be included:  

A. Project Overview:  General information about the property (for example, the address, year built, square footage)

B. Rehab Overview:  Detailed information about what needs to be done to the exterior and interior of the property and how it should be done

  • Exterior Includes:  General Repairs, Landscaping/Tree Removal, Roof, Windows & Sliding Doors
  • Interior Includes: Clean Out & Demo, General Interior, Kitchen, Bathrooms, Living Space, Electrical, Plumbing & HVAC, Garage, Basement & Attic

C. A-List of Licensed Contractors: those you will need for the rehab project

Don’t forget to review your Home Inspection Report to ensure you’ve not missed any critical details in your Detailed Scope of Work.

Budget and timing are always a consideration when building your Detailed Scope of Work.  There are a few important questions that can help to make decisions regarding what to include or not.

  • Will it ADD VALUE?
  • Will it HELP YOU SELL the Property?
  • Is it NEEDED?
  • Is it COST EFFICIENT?

In addition to asking these questions, know that quality kitchens and bathrooms typically add value and help you sell a property.  Also, having a few “WOW” factors can help you to sell a home.  We suggest that you include up to three (3) “WOW” elements in your home.  Here are a few simple ideas to consider depending on the level of rehab you are doing: Matching SS Appliances, Backsplash in the Kitchen, Accent Wall in the Master Bathroom, Nice Doorknob, Curtains or Mini Blinds, or a Nest Thermostat.

Remember, whenever possible, it is best to secure multiple estimates for any MAJOR WORK needed during your inspection window – before your closing.  Major work might include roof replacement, kitchen, and bathroom remodeling, HVAC, plumbing, and landscaping.

As you gain experience, you can save time and money on your rehabs by creating a list of standardized items to use for each of our rehab projects, based on the level of rehab needed.  Standardizing things like paint (brand, color, and finish), flooring (style, brand, and color), light fixtures by room, faucets for the kitchen and bathrooms, kitchen cabinets, and appliance packages are common.

Once you’ve prepared your Detailed Scope of Work, you will be sharing it with contractors so they may provide you with a detailed estimate for the work that you want to be done.

Benefits to you and your contractor(s) of being detailed: 

  • More Accurate Contractor Proposals:  Eliminates guesswork for the contractor. They can provide you with a more accurate estimate.
  • Easier to Compare Bids:  Ensures that your contractors are bidding the same scope, and now bids can be more easily compared.
  • Minimizes Project Disputes:  Ensures that you and your contractor are on the same page, which should minimize disputes.
  • Minimizes Change Orders: You are less likely to have expensive change orders with a Detailed Scope of Work document.
  • Maximizes Profit:  With fewer change orders, your profits should increase on your projects!