The Homeowner's Guide to Escrow Protection in Construction

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