Sep 5, 2025
If the average price of a home reno weren’t eye-watering enough, the potential financial and emotional costs of hiring a friend to take on the job are enough to make anyone cry.
A home remodel is not something to undertake casually. It’s a big investment, and getting bigger as Trump’s tariffs drive up the cost of construction materials. Home renovation professionals warn the cost of a reno could jump 25% because of the tariff factor. [1]
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Even at the best of times, homeowners rarely stay on budget. According to a 2020 U.S. Houzz & Home survey, only 36% of homeowners doing a renovation could stay on track. [2]
So it may be really tempting to try to cut a deal with a friend who happens to be a contractor. You might agree to it with a handshake — because this is your friend, after all.
What could go wrong?
Sadly, a lot, particularly as both your home and your relationship are on the line.
Verbal agreements are trickier to enforce
Imagine your friend offers to redo your kitchen, floors and bathroom for $100,000 — $10,000 less than other contractors in your area are quoting for the same job. You and your friend verbally agree to the work and price.
Then the cost skyrockets from $100,000 to $140,000 thanks to major delays and disorganized work. You’re not sure how you’ll afford it. You’re feeling betrayed by your friend.
Do you have to pay the full amount due or can you pay the $100,000 you verbally agreed to.
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When it comes to settling disputes like this, verbal agreements are problematic. Generally a third party — like a mediator or small claims court — wants to see a written document.
The only way verbal agreements can be enforced is if they have elements of a valid contract, specifically: [3]
- Both parties are mentally sound and able to enter into the contract.
- An offer was made and accepted. In this case, an offer was made to do the contracting project for $100K, and it was accepted.
- Something of value (called “consideration” in contract law) was exchanged between parties to a contract. In this scenario, renovation services in return for money.
- There was mutual consent.
- There is nothing illegal about the terms of the agreement.
The verbal agreement in this scenario meets all those criteria, so it would be legally binding.
That means you — or your friend — could sue for breach of contract if either of you fails to uphold the agreement.
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In this case, your friend is in breach of contract and liable for any losses you experienced because they failed to provide the agreed-upon work on time for $100,000 — unless you originally agreed to pay more if the project went over budget.
But even if you decided to pursue the matter legally and get a judgment against your friend, you may still be out of luck if they can’t afford to pay you.
Your best option is probably to talk to your friend, realize you both made mistakes and try to find a fair resolution.
Explain that you cannot afford the expanded budget, and while the project may have had delays and not gone as planned, you're eager to try to find a mutually satisfactory resolution. They might split the difference if you're willing to pay a little more.
If they won't, or if you don't want to pay anything more than the $100,000 you originally agreed to, you may have no choice but to refuse to pay.
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While they could try to sue, they'd have to show you had a valid verbal contract that specified you'd pay more than the original cost if the project went over budget. If they can't prove that, then the case may not hold up in court.
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Avoid conflict with a written contract and vetted pros
This scenario demonstrates how important it is to get everything in writing — whether it’s a home renovation or any other big investment. A written contract helps avoid misunderstandings and potential legal trouble.
Working with a licensed professional and signing a contract can help you to avoid a lot of hassle and a lot of stress, and will give you the best chance of your home renovation going smoothly. W
[1]. USA Today “From tile to toilets, home renovation costs will climb as new tariffs take effect.”
[2]. Houzz”Why remodels go over budget, and how to keep yours in line”
[3]. Law Depot "Are verbal agreements legally binding?"
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
