Whether you are building a new home entirely or doing remodeling work, many people will prefer to hire a contractor rather than doing it themselves. Of course, this work is not something you will want to take lightly. It is critical to hire a team that fits your needs. You will want to take every precaution possible to ensure you get high-quality long lasting work you can trust.
Finding a contractor in your area is probably the easiest part of the entire process. You can go online, ask a family member, talk to your friends, or search the National Association of the Remodeling Industry to find a list of contractors in your area. Your list of contractors may seem overwhelming at first, but you can narrow it down by following the below steps. Once you have a better understanding of the process, selecting a contractor in your area will be far easier!
Know Your Goals
Before you even begin calling or interviewing possible contractors, you want to know exactly what you want, have a budget in mind, and know the necessary timeframe that you would like the work to be done.
Whether this is a large project or a minor one, you want to fully know your end goal and what you want to achieve. Even if you do not know the exact ins and outs of how to create your goal or even the specific products needed, you want to have a plan in mind when you begin the search to find a contractor.
There are several types of contractors you can hire, depending on the scale of your project and your needs.
- General Contractor (GC): A general contractor manages your remodeling project. This includes selecting, hiring, and supervising subcontractors or in house builders. They are also responsible for getting building permits and scheduling inspections.
- Specialty Contractor: A specialty contractor is responsible for a single job in a new build or remodel. For instance, plumbers or electricians hired for a specific task.
- Architect: An architect designs and creates blueprints for homes, additions, and major renovations. If you are looking to make structural changes, it’s a good idea to get an architect involved.
- Design/Build Contractor: A design-build contractor does the work of both a GC and architect. If you have a complex project, a design-build contractor may be your best bet. They can take on large projects and offer all the required elements under one roof.
Additionally, you may want to have an idea of the type of subcontractors you will need for your project. If you are hiring GC, they will usually have their own in house teams of professionals or a network of reliable subcontractors, but it’s a good idea to have your own understanding of this step as well. Knowing the team you’ll be working with is essential for verifying the credentials of the GC.
One way is to check for contractors, subcontractors, or other service providers in your area through the National Association of Home Builders. The NAHB represents the largest network of craftsmen dedicated to building and enriching communities.
Do Your Research
It’s essential to do your own research to select the best contractor for your project.
You can narrow down your search by consulting with family, friends, or co-workers who’ve recently had renovations done. However, don’t use these recommendations as your only factor in the decision-making process.
Check a contractor’s reputation online. Here are some things you should look for:
- Read reviews on each company from rating sites you trust.
- Pay attention to their mission statement and what they stand for.
- Their length of time in business—more established companies probably have higher reputations.
- Make sure they have current state licenses and adequate insurance coverage.
- Check out their entry on the Better Business Bureau’s website and your state’s consumer protection agency.
- Get estimates in a written form so you can see the work breakdown.
While the contractors you meet with may sound fantastic, you want to fact check to ensure you are not blind to some significant warning signs:
- Ensure that the contractor you like does not have a history of disputes.
- Visit a current job site to check their work.
A Note About Licensing & Insurance
Many states have requirements for contractors to be licensed and/or bonded. Make sure to familiarize yourself with licensing requirements in your area, whether it’s a simple registration or specific qualification. If your state requires this (some do not), ensure that the contractors you’re considering are up-to-date on their licenses.
Contractors should hold several types of insurance (and be current on their policies):
- Worker’s compensation
- General liability
- Property damage coverage
It is entirely acceptable to request copies of their insurance certificates. If a contractor does not have comprehensive or updated policies, you may end up being liable for injuries or damages that occur on your property during the project (Source: FTC).
Once you start getting bids, it’s important to review them carefully.
Checking a Contractor’s Work
Before you commit to a contractor, make sure that their style and quality of work aligns with your expectations. Also, if you are looking to build or remodel a specific part of your home, you want to ensure they have done similar projects in the past.
First, visit each contractors’ website and look over the past work that the company has completed; this should also give you an understanding of what type of work they specialize in.
Then, try to visit a current site or a finished project. An in-progress project is helpful to understand the contractor’s process. You will be able to determine:
- If the area looks clean and orderly
- The workers and site are safe
- You do not notice any red flags
Check for Scams
The first step to validate a contractor is to look up their license, check that it is active and that they have the correct licence class that is required to perform the job. This can be done by performing a simple search on google “check a contractor’s license in (your state)”. Normally, the first or second search results will link to the contractors state license board, where you can find the required information. In addition, many states will also list information on whether or not the contractor has up to date workers compensation, bond and insurance..
Signs of a scam can be a contractor who:
- Offers you discounts for finding other customers
- Does not have a business number listed publicly
- Conveniently has materials left over from a previous job
- Requires payment upfront or accepts only cash
- Offers a lifetime warranty
- Refers you to a lender that the contractor knows
- Gives you a discount because your job will be used as a “demonstration”
- Requires the client to pull the required building permits
For more details on the Home Improvement Loan Scam, visit the Federal Trade Commission’s Consumer Information Page on hiring a contractor and scroll down to the sub-header “The Home Improvement Loan Scam.”
Do a Phone Interview
After you sufficiently researched a handful of contractors, you will want to begin conducting phone interviews. This is often the best way to narrow down your search further.
When you make your phone call, you will want to have a list of questions in mind that you will ask each company. Some common questions that will help you narrow down your search are:
- Do they take on projects of your size?
- How many other projects do they have in line?
- When could they start on your project?
- Have they recently finished projects of your size?
- Do they have an estimated start date?
Can they provide an estimated time frame to completion? (in their written estimates)
- Can they provide you with a list of professional references (past clients or work examples)?
- Do they subcontract or have in house teams?
- What subcontractors do they work with? How long have they had a relationship with these subcontractors?
- Will your project require a permit?
- Do they offer design services?
- Do they offer architectural services? (if needed)
- What insurance do they have, and are they willing to provide certificates?
Meet Face to Face
Once you have completed phone interviews, you will probably have a much smaller list of contractors that you are considering to hire. This will be the time to conduct an in-person meet up.. In order to receive estimates and go into further detail.
Often, meeting in person will help you learn more about the personality of the contractor you will be working with and help you notice any signs that indicate that they may not be a good fit.
Get Bids
Different contractors will handle the bidding process differently, and this is something you will want to discuss. You will want to go over your plans for your project, looking at blueprints, and discussing the details that you truly do not want to go without.
Regardless of how the bidding takes place, you will want to ensure that the contractors you are considering have a detailed plan of how they will handle your project. You want to be offered a list of cost breakdowns and what they believe the project cost will be.
Of course, these budgets can significantly affect your final decision as you more than likely have an amount you would like to spend. You want to get bids from a few different companies to ensure you are making the best choice financially.
Understand Payment
You will want to discuss how payments take place, with the final companies you are considering and what you should expect from this payment process. Most contractors will have a payment breakdown that includes a down payment and then milestone payments throughout the project.
A few things to keep in mind:
Never Pay Full Price Up Front
This removes accountability for the contractor and may cause the job not to be completed to your satisfaction.
Don’t Pay in Cash
It is better to pay by check or card as this keeps a record of all transactions.
Choose a Reasonable Down Payment
Sometimes the down payment can be up to half the final project’s price. However, that is not always the best plan, especially if you have a large project. The lower the down payment is, the less money you could be out if the job gets delayed or disputed.
Many states have laws that limit the amount a down payment for a contractor can be. Contact your state or local consumer agency to learn how these laws may apply to your area.
Schedule Payments
When you begin scheduling payments, you want to make sure they are set at regular intervals. While different companies will do this process differently, a “milestone approach” is recommended. This means that payment will be made upon completion milestones.
This way, it will ensure that work is completed to schedule. If the work is delayed, the contractor’s payments are also delayed.
Don’t Automatically Choose the Lowest Priced Contractor
It’s essential to consider the overall quality of the project. If a lower cost bid leads to decrease in work quality, that could cause unplanned and expensive fixes or updates down the road, It is not worth it and in the end can cost you more.
If one price is much lower than the others you’re considering, or it seems too good to be true, it often is. Never go with the smallest bid automatically; instead, ensure you are getting quality work long lasting work.
Don’t Pay the Final Bill Until Completely Satisfied
Once you pay the final bill, that may release the contractor from further work or responsibility. Thus, it is vital that you are satisfied with the completed work before you cut that last check.
Make sure you confirm that the subcontractors (if there are any) and suppliers have also been fully paid. Some states have laws that allow these service providers to file a mechanic’s lien against your home if they have outstanding bills. If you cannot pay them, you may have to sell the home you just remodeled to meet the debts. You should also ask for a lien release or lien waiver from the contractor and all subcontractors to protect yourself.
Additionally, it’s essential to be aware of the agreed-upon final costs. Unless you have approved a limit increase, your final bill may be limited by some state’s laws.
Lastly, know that if you can withhold payment if you have a problem with any part of the work that’s been performed. This includes both materials and/or services. If you tried to work out the problem with the seller, but the problem has not been resolved, you do have the right to contact your credit card company and withhold payment. You can withhold payment for the credit outstanding for the purchase in addition to any finance or related charges.
Review the Contract
By the time you decide on a contractor, you will want to review the contract. It is crucial to receive a written contract before any work is begun so you can review it. You want to have a quality contract to look back on that has been signed by all parties before work begins. This is critical to protect yourself legally and ensure the work on your home is done properly.
Make sure you ask any final questions before signing paperwork; this will ensure you get all your needs in writing.
Before you sign the contract, make sure it includes:
- Contractor’s name, address, phone number
- The license number (if your state requires it)
- Start date, completion date, and any milestones agreed upon
- Payment schedule for all stakeholders (contractors, subcontractors, and suppliers)
- Agreement that contractor will get all permits
- How change orders are to be handled*
- A detailed list of all materials—if the contractor is responsible for choosing any materials, parameters should also be defined
- Warranty information
- Contractor tasks (including site cleanup and disposal of waste)
- Anything decisions made during conversations or calls
- A written statement of your right to cancel the contract (if applicable)
For more details on this list, visit the Federal Trade Commission’s Consumer Information Page on hiring a contractor.
*A note about change orders: A change order is “a written authorization to the contractor to make a change or addition to the work described in the original contract” (Source: FTC). It’s essential to have an approval process for these orders because one change could affect the project’s cost and schedule. Change orders include changing/updating materials, fixtures, appliances, or services beyond the contract.
Keep Records
Once the work has begun, it’s essential to keep records of the process. When work begins, you should already have copies of:
- Written estimate with a detailed scope of work.
- The signed contract
- The contractor’s licenses and insurance certificates
During the project, you’ll want to continue connecting records for work completed and in progress. These include:
- All change orders
- All correspondence with your home improvement professionals
- Receipts of all payments (you may need these later for tax purposes)
It is also recommended to keep a log or journal of all phone calls, conversations, activities, or setbacks during the project’s entire timeline. This will help you ensure that your project is on track. It will also help protect you if a problem arises and a dispute is required. Taking photos also will help, especially in resolving disputes.
When work is completed, it’s a good idea to use a sign-off checklist. This can be as simple or detailed as your project requires. It should, at a minimum, contain the below information:
- All required inspections were successfully completed
- All work meets contract standards
- You have written warranties for materials and workmanship
- The job site has been cleaned up
- You have proof that all subcontractors have been paid
- You have inspected and approved the work
Know How to Report a Problem
No matter how cautious you are in your selection of the right contractor, it’s possible a problem can arise. If this happens to you, the first thing you should do is try to resolve the problem with the contractor. Reputable contractors are willing to work with you and will help you resolve the issue.
In case of filing a dispute .
Ensure you follow any phone or in-person contact with a letter, sent by certified mail with a return receipt or email, with a read receipt. These are your proof that the dispute has been in discussion. You will need them for your records.
If that fails to resolve the dispute, some agencies can help, such as:
- Your state attorney general or local consumer protection office
- Your local home builders’ association
- Your local media’s call for action lines
- Dispute resolution programs with the BBB or other organizations.
Conclusion
Hiring a home contractor can be both an exciting and stressful process. However, if you keep these ten things in mind, it will help alleviate much of the stress or confusion that may be involved. That way, you can focus on the thrill of watching your remodel take shape and become part of your dream home!
