What is Construction Escrow?

Construction escrow is a secure payment arrangement where funds are held by a neutral third party and released only when specific conditions are met—typically the completion of defined work milestones.

How Bidroom's Escrow Works

  1. Fund the Milestone: You deposit funds for the upcoming milestone into escrow
  2. Contractor Works: The contractor completes the defined work
  3. Submission: Contractor submits completion with photos/documentation
  4. Review: You review the work (typically within 3 days)
  5. Release: Once approved, funds are released to the contractor

Why Escrow Protects You

  • You never pay for work that hasn't been completed
  • Contractors are motivated to complete milestones correctly
  • Disputes are easier to resolve with defined checkpoints
  • Your money is secure in a regulated escrow account

Standard Milestone Structure

A typical project might have milestones like:

  • 10% - Contract signing and materials ordering
  • 25% - Demolition and rough framing complete
  • 25% - Rough mechanical (plumbing, electrical) complete
  • 25% - Finish work complete
  • 15% - Final walkthrough and punch list complete

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