When you've found a contractor you like, the next step is to enter into a formal agreement. This contract will spell out what exactly is required of the contractor, as well as payment schedules and other details critical to the project.

The key to a great home improvement contract is both sides being crystal clear on the contents.

Once there is a mutual understanding and acceptance, it's time to start the work.

WHAT'S IN A CONTRACT?

The home services website Angie's List recommends these 10 items to be included in any home improvement agreement you enter into:

1. Job description that spells out the project.

2. Start and completion dates that give a reasonable project timeline.

3. Payment terms that tie payment draws to job completion milestones.

4. Local authorization that specifies that your contractor is responsible for securing necessary regulatory permits.

5. Penalties for missed completion dates.

6. Procedure for work orders/changes to initial agreement.

7. Detailed outline of costs and materials.

8. Proof of licensure, insurance and bonding.

9. Termination clause that describes how a homeowner or contractor can leave the deal without penalty.

10. Other protection, which can include a lien release that protects you from liability should the contractor fail to pay their workers.

DEFINING PAYMENT TERMS

There is no steadfast rule to how much your contractor may charge as a down payment. Research your state laws to determine if there's a limit, and aim to start the project with as low a down payment as possible.

This will incentivize your contractor to start and finish your project in an expedited fashion.

ALWAYS WRITE IT OUT

Even if your state doesn't require a written contract, request one from your contractor. This ensures your project and the contractor's work are defined and the work is measurable.

Follow the list of aforementioned contract items, and keep key timelines in mind to ensure project efficiency. Try to be home when possible to make sure you can keep an eye on the progress of your contractor and set up regular meetings to drive productivity.

The more involved you can be as a homeowner, the fewer surprises you'll find when the project comes to a close.