This initial design phase is dedicated to developing the broad design character of your project. Schematics will include scaled drawings for both floor plans and elevations (exterior side views), to establish bulk-plane aspects of the project. Essentially, this is where things start to take shape.
Schematics are important because prospective contractors (builders) will develop their preliminary cost estimates based on them. These estimates will allow you to weigh different candidates before committing to the largest and most costly design phase (Permit drawings).
This is also the period for determining those elements (if any) which may require extra interactions with local building and/or planning departments for possible “variances," such as re-zoning, historic reviews or neighborhood architectural control entities. All the above allow budgets and scope to be modified as necessary….or at least confirm expectations.