HomePlan

Phase 4 · Bid and contract · Step 4.3

Negotiate and sign the GC contract

Fixed-price is what most owners want. Cost-plus only works with a guaranteed maximum price (GMP) cap and weekly itemized invoices. On addition contracts (almost always over $300K), an attorney review pays for itself.

Who
Homeowner, General contractor, Attorney
How long
1-2 weeks
Cost
$1,000-$4,000 if attorney-reviewed
You end up with
Signed contract with payment schedule and change-order terms

Contract structures

Fixed-price is the most common and most owner-protective structure. The GC commits to a total price; the risk of cost overruns is theirs (subject to change-order terms). For a second-story addition, fixed-price is what you want — but with explicit allowances for unknowns inside an old house.

Cost-plus (GC's actual cost + a percentage markup, typically 5–20%) can work, but only with a guaranteed maximum price (GMP) cap and weekly itemized invoices. Without a cap, cost-plus puts all the budget risk on you; the cap is what makes the structure work.

Guaranteed Maximum Price (GMP) mixes the two: GC bids a not-to-exceed price, with shared savings if the actual cost comes in below.

What the contract must include

  • Scope of work in detail (reference the permit-ready set by date and revision number).
  • Payment schedule tied to milestones, not a calendar.
  • Change-order process — written approval required, rate sheet for hourly labor, markup percentage on materials.
  • Schedule — substantial completion date, liquidated damages if applicable.
  • Allowances — cabinets, flooring, fixtures, appliances, with itemized values.
  • Hidden-condition allowances — specific dollar contingencies for known unknowns inside an old house: rotted sills if found, additional knob-and-tube remediation, hidden plumbing repairs. Without these, every discovery becomes a change-order fight.
  • Exclusions — explicit list of what's NOT in the bid (often: landscape, decks, exterior paint, finish upgrades).
  • Warranty — at least 1 year workmanship; longer for specific systems.
  • Lien waivers — conditional and unconditional, on each progress payment and at completion.
  • Dispute resolution — mediation before arbitration before litigation, in WA.

When to hire an attorney

For contracts over about $300,000 — which is essentially every Seattle second-story addition — an attorney review of the contract pays for itself. Two to six hours of focused review at $400–$650/hr in Seattle ($1,000–$4,000 total) catches the change-order terms, hidden-condition allowance language, and lien-waiver schedule that decide how the project handles surprises.

This is informational framing; HomePlan does not provide legal advice. Verify any attorney via the Washington State Bar Legal Directory.

Initial deposit

10% is a common ask; 5% is more conservative. Stage subsequent payments to milestones (abatement complete, foundation, framing, MEP rough, drywall, substantial completion). Each milestone payment trades dollars for verifiable progress.

Go deeper

Optional reading. Skip if you only need the headline.

›Mechanics' lien deadlines and waiver procedure (WA, 90-day window)Three working parts of WA construction-lien procedure: a 90-day filing window, a pre-claim notice rule for subs, and a two-stage statutory waiver schedule that runs alongside payments.

The procedure in three parts

Washington's construction-lien procedure under RCW 60.04 has three working parts that operate together:

  1. A 90-day filing window measured from the last day labor or materials were furnished.
  2. A pre-claim notice that subs and suppliers (not the prime GC) have to deliver early in their work.
  3. A two-stage waiver schedule — conditional waivers at each progress payment, unconditional final waivers at completion — using statutory forms in RCW 60.04.071.

Anyone who furnishes labor or materials to an improvement on your property — GC, sub, supplier — has lien rights under the chapter. Liens are recorded with the King County recorder and stay on title until released. The waiver schedule is how lien rights get released as payments flow through.

The 90-day clock

A claimant has 90 days from the date they last performed labor or supplied materials to record the lien. After 90 days with no recording, the lien right expires.

For a Seattle addition: substantial completion isn't the all-clear. Title is fully clear 90 days after the last sub leaves the site — usually the landscape, paving, or punch-list crew, not the GC.

Pre-claim notice (RCW 60.04.031)

For most subs and material suppliers (not the GC you contracted with directly), the lien right depends on first delivering a pre-claim notice to you within 60 days of starting work or supplying materials. Getting one of these during construction is routine — it's a procedural protection, not a dispute. Treat it as a signal that the sender is on the property and add them to the waiver list for upcoming draws.

The lien waiver schedule

Two waivers, two stages:

Waiver type When Who signs What it does
Conditional waiver upon progress payment At each progress payment GC + every sub/supplier on that draw Releases lien rights conditional on the check clearing. Standard practice.
Unconditional waiver upon final payment At final payment GC + every sub/supplier who worked the project Releases lien rights absolutely. Get this from everyone before final disbursement.

Both forms are statutory in WA — RCW 60.04.071 prescribes the conditional/unconditional progress and final waiver language. Use the statutory form so it survives challenge.

How to operate the schedule

  1. In the GC contract, require a current sub list with each progress draw.
  2. For each progress draw, the GC delivers (a) signed conditional waivers from every sub/supplier on that draw plus (b) a signed conditional from the GC for their own scope. The bank/lender disbursement is conditioned on receipt.
  3. At final payment, switch to unconditional final waivers from every sub and supplier who appeared on any draw, plus unconditional final from the GC. Hold final retainage until all are received.
  4. Then run the 90-day clock anyway. Even with full waivers, monitor the King County recorder for liens for 90 days from the last on-site work. Recording a lien against a fully-waived project is rare but happens.

Why this matters more on additions

Additions tend to have more discovered-condition subs (abatement, knob-and-tube remediation, foundation specialists) than new-construction projects. More subs means more pre-claim notices to track and more waivers to collect. Build the schedule into the GC contract from the start.

When this matters most

  • Cost-plus contracts without a tight waiver schedule. You pay the GC, the GC pays subs late, subs record liens. You've paid in full and still have clouded title.
  • Refinancing or selling within a year of completion. Title companies ask about pending or recently-released liens. A clean waiver file at handoff makes it a 10-minute conversation.
  • Bankruptcy of the GC during the project. Subs paid through the GC may not have been paid; their lien rights are against your property, not the GC's bankruptcy estate.

Informational framing

This is general information about Washington lien procedure. It's not legal advice and doesn't establish an attorney-client relationship. For waiver language specific to your contract, or if you receive a recorded lien, consult an attorney licensed in WA — verify via the WSBA Legal Directory.

Sources for this section

Where this information came from

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