Why going through a scope of work is important in real estate

Why going through a scope of work is important in real estate

Rental Property Investor · Colorado Florida Arizona Texas, Nevada and Ohio. · Member since 2020 · 116 posts · 58 votes

A scope of work is a document that outlines the specific tasks, deliverables, and milestones that are involved in a project. In the context of real estate, a scope of work might be used to define the terms of a renovation, construction, or other property development project.

There are several reasons why going through a scope of work is important in real estate:

1. It helps to clarify the project goals and objectives: A scope of work defines what needs to be done, how it will be done, and what the end result should look like. This is making sure they know EXACTLY WHAT YOU WANT. Dummy-proof things. This helps to ensure that everyone involved in the project is on the same page and working towards the same goals.

2. It helps to establish a timeline and budget: A scope of work should include a timeline for completing the various tasks and milestones, as well as a budget for the project. This helps to ensure that the project stays on track and within budget. You'd be surprised how much contractors put wiggle room they don't need into things. A great way is to incentivize it to where they make more or get done faster and can make the same amount. 

3. It helps to avoid misunderstandings and disputes: A scope of work can help to prevent misunderstandings and disputes by clearly outlining the responsibilities of each party involved in the project. If you have documentation saying you wanted white paint, and they paint it black, it's on them, if not, who wins on he said, she said, and who doesn't have hard feelings afterward?

4. It helps to ensure that the project meets the necessary standards and regulations: A scope of work should include any necessary permits or approvals that are required for the project, as well as any relevant standards or regulations that must be followed. Sometimes you don't know, what you don't know and if you demand it done a certain way and wont let the contractor give some advice, you could be shooting yourself in the foot. 

    Overall, a scope of work is an important tool for managing and completing real estate projects in a timely, efficient, and cost-effective manner.

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    • Charles MadduxPro Member
      Skagit County, WA · Member since 2020 · 9 posts · 4 votes
      3y

      This is a fantastic post! If I had read it last year when I got started I could have avoided some very frustrating/expensive mistakes! I appreciate the info!

    • Bruce WoodruffPro Member
      Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
      3y

      Yes, a good SOW is critical to having a successful project. And your GC should have a major hand in preparing this document....no homeowner will have the knowledge to know exactly what to do. The homeowner should tell his GC what he wants (generally) and let the GC develop the steps needed to get there.

      Good post!

    • Member since 2022 · 47 posts · 39 votes
      3y

      Is there a general format that a scope of work should look like? What happens when the work order is all that is submitted? What would an incentive look like (eg “complete said goal by May 15 with $xx payment made”) or are we talking bonus money being given like in road construction?

    • Bruce WoodruffPro Member
      Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
      3y
      Quote from @John Hernandez:

      Is there a general format that a scope of work should look like? What happens when the work order is all that is submitted? 

      There are many ways to do this. I always used the phases of construction in order of their place in the project. For example - General Conditions, Site Prep, Demo, Concrete/Foundation, Framing, Electrical, Plumbing, HVAC, Window/Doors............. Etc, Etc.

      Every phase should be very detailed and if not included in this project, IE foundation, it should be clearly stated that there is no foundation work in this project.


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