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8 Tips for Hiring a Contractor

Here are his top 8 pro tips to help you find a contractor from start to finish.

1. Get Recommendations

Start with your friends and family, and then check in with the National Association of the Remodeling Industry for a list of members in your area. You can also talk with a building inspector, who’ll know which home renovation contractors routinely meet code requirements. Additionally, you can pay a visit to your local lumberyard, which sees contractors regularly and knows which ones buy quality materials and pay their bills on time.

2. Do Phone Interviews

Once you’ve assembled a list, Tom recommends that you make a quick call to each of your prospects and go through these questions to ask a contractor:

• Do they take on projects of your size?
• Are they willing to provide financial references from suppliers or banks?
• Can they give you a list of previous clients?
• How many other projects would they have going at the same time?
• How long have they worked with their subcontractors?

The answers to these questions will reveal the company’s availability, reliability, how much attention they’ll be able to give your project, and how smoothly the work will go.

3. Meet Face to Face

Pick three or four contractors to meet for estimates and further discussion based on the phone interviews. A contractor should be able to answer your questions satisfactorily and in a manner that puts you at ease. Tom says you two must communicate well because this person will be in your home for hours. On the other hand, don’t let personality fool you. Check in with your state’s consumer protection agency and your local Better Business Bureau before hiring a contractor to ensure they don’t have a history of disputes with clients or subcontractors.

4. Investigate the Facts

Now that you’ve narrowed your list put your research to use. Call former clients to find out how their project went and ask to see the finished product. But Tom says you shouldn’t rely on results alone. Even more important, visit a current job site and see how the contractor works. Is the job site neat and safe? Are workers courteous and careful with the homeowner’s property?

5. Make Plans, Get Bids

You have a short list of contractors whose track records seem clean and whose work ethic looks responsible. Now it’s time to stop looking back at past work and start looking forward to your project. A conscientious contractor will want a complete set of blueprints and a sense of what homeowners want out of a project and what they plan to spend. To compare bids, ask everyone to break down the cost of materials, labor, profit margins, and other expenses. Generally, materials account for 40 percent of the total cost; the rest covers overhead and the typical profit margin of 15 to 20 percent.

6. Set a Payment Schedule

Another important tip for hiring a contractor is to work out a payment schedule ahead of time. Payment schedules can speak to a contractor’s financial status and work ethic. If they want half the bid up front, they may have financial problems or worry that you won’t pay the rest after seeing the work. For large projects, a schedule usually starts with 10 percent at contract signing, three payments of 25 percent evenly spaced throughout the project, and a check for the final 15 percent when you feel every item on the punch list has been completed.

7. Don’t Let Price Be Your Guide

“Throw out the lowball bid,” says Tom. “This contractor is probably cutting corners or, worse, desperate for work”—hardly an encouraging sign in a healthy economy. Beyond technical competence, comfort should play an equal or more significant role in your decision. An essential factor in choosing a contractor is how well you and he communicate. All things being similar, it’s better to spend more and get someone you’re comfortable with when hiring a contractor.

8. Put it in Writing

Draw up a contract that details every step of the project: payment schedule; proof of liability insurance and worker’s compensation payments; a start date and projected completion date; specific materials and products to be used; and a requirement that the contractor obtains lien releases (which protect you if he doesn’t pay his bills) from all subcontractors and suppliers. Insisting on a clear contract isn’t about mistrust, Tom assures us. It’s about ensuring a successful renovation.

Finally, remember that as soon as a change is made or a problem is uncovered, the price increases, and the project gets longer. The four most expensive words in the English language? “While you’re at it….”