It’s a homeowners worst nightmare: you hire a contractor to renovate your bathroom, update your wiring, or build an addition onto your house and they do a shoddy job—or worse, take your money and run. Perhaps you have family or neighbors who’ve been burned by bad contractors, or maybe you’ve been burned yourself!
If you want to hire a contractor for a home improvement project, it’s all too easy to focus on the bid and lose sight of the other things that matter, like communicating well and understanding one another’s goals and expectations.
Keep reading for 10 tips on how to hire a contractor.
1. Do Your Research
The time you spend seeking out a qualified contractor now will benefit you later. Hire a contractor who is licensed, bonded, and insured. This is non-negotiable. As the property owner, if a worker is injured on the job and the contractor doesn’t have insurance, you’re held liable. Without adequate homeowners insurance coverage, it could seriously impact your finances.
Friends, family, and neighbors are always full of recommendations for local contractors, and websites like Nextdoor, Angie’s List, Houzz, and Home Advisor make it easy to find top-notch home improvement pros in your area.
A reputable contractor usually belongs to organizations like the National Association of the Remodeling Industry or is accredited by the Better Business Bureau, two more great places to start. You could also ask a building inspector who likely knows which contractors consistently do great work and meet code requirements.
Look for abbreviations that follow a contractor’s name. These represent specialized certifications, accreditations, and memberships, including:
- National Association of Home Builders membership (NAHB)
- Certified Graduate Remodeler (CGR)
- Certified Green Professional (CGP)
- Certified Aging in Place Specialist (CAPS)
- Building Industry Association membership (BIA)
2. Get on the Phone
Once you’ve got a list of options, do a quick phone screen to gain insight into a prospective contractor’s availability and reliability. Ask questions like:
- How many other projects will you have going on at the same time?
- How long have you worked with your subcontractors?
- Can you provide a list of previous clients and financial references?
- Where can I see examples of your work?
3. Meet in Person
After the phone interviews, pick three or four contractors to meet with in person for an estimate. The relationship you have with your contractor is critical, and meeting face to face will give you a sense of how you’ll work together.
If you really want to be thorough, ask to check out a current job site and see for yourself how the contractor works. Is the job site clean and safe? Are workers respectful and careful with the homeowner’s property? You could even ask to contact former clients to see their work. Before extending an offer, check with your state’s consumer protection agency and your area’s Better Business Bureau to verify that they don’t have a record of disputes with clients or subcontractors.
Remember: being thorough doesn’t mean you don’t trust your contractor. It means you want to do everything you can to ensure a successful renovation and working relationship.
4. Get Bids
Now that you’ve got a shortlist of contractors, it’s time to start planning the project. The right contractor will want a sense of what you want out of the project, then provide a bid. Ask a few different contractors for proposals, including breakdowns of the cost of materials, labor, profit margins, and other expenses. Materials usually make up 40% of the total cost, and the rest covers overhead and the profit margin, which is 15-20%.
We’ve all heard the adage, “You get what you pay for,” and in this case, it’s spot-on. You’ll receive a spectrum of bids. Price tends to reflect quality, so throw out the lowball bid. It usually means the contractor is cutting corners, which isn’t an encouraging sign. The more realistic bid is likely to fall somewhere in the middle.
5. Set Expectations
Your relationship with your contractor is critical, and you need to know that they 1) have the experience for your job, and 2) understand your goals and expectations. The importance of communication cannot be overstated, so insist on regular updates via phone, email, or text. The work crew should be able to handle their day-to-day tasks, but you should get a weekly in-person update from your contractor at the very least.
Keep things crystal clear from the get-go with these questions to ask your contractor:
- Will you be on the job site daily? (If not, designate a crew member to serve as a point of contact.)
- How will the job site be kept safe and secure?
- Where will tools, materials, and other supplies be stored?
- How will my property be protected during construction?
- What are the names of the subcontractors who will be working on the project?
- How do you handle unforeseen expenses or changes to the project scope not specified in the original contract
6. Get the Contract in Writing
You’ve accepted a bid. Now it’s time to sign the contract! Your contract should include specifications on items including, but not limited to:
- Project description
- Detailed project timeline, including the completion date
- Total cost
- Materials and product breakdown
- Payment schedule
- Specifications on how additional expenses and changes will be handled
- Names and contact information of subcontractors and other parties involved
- Contractor’s license number
- Proof of liability insurance and worker’s compensation payments
- Lien waiver
If you don’t receive a project timeline with a completion date, it could mean the contractor has several other jobs and may not be able to complete yours on time. For further peace of mind, you could also ask your lawyer to review the contract before signing.
7. Establish a Payment Schedule
The way your contractor wants to structure your payment schedule is usually a good indication of their financial status and work ethic. For example, if your contractor wants half the bid up front, it could indicate financial troubles or that they’re worried you won’t pay the rest after you see the work. Working out a payment schedule before you sign the contract gives you an opportunity to get out if something doesn’t feel quite right.
For a larger project, a reasonable payment schedule might include 10% due at the time of contract signing, followed by three payments of 25% spaced evenly throughout the project, and a final payment for the remaining 15% upon project completion.
8. Prepare for Renovation
Once you’ve signed the contract, get your home ready for renovation before the job begins.
- Make space for the crew. Allow them to store tools and supplies on site, whether it’s in your tool shed or your contractor’s job box. The more accessible these items, the faster they can work.
- Remove valuable possessions and breakable items from the job site.
- Seal the site’s entry point with plastic sheeting and painter’s tape to prevent debris and dust accumulation, if necessary.
- Review and approve paint colors, finishes, and materials before to save time.
- Get the contact information for key people working on the project.
- Keep track of job-related documents, including contracts, payments, and receipts.
9. Ensure That the Project Is Complete Before Signing Off
Before you hand over your final payment, schedule a walkthrough with your contractor and make a note of any incomplete tasks. Once you’re ready to give your stamp of approval, request an affidavit of final payment or lien release, which clears you of any liability for third-party claims.
10. Revisit Your Insurance Policy
Making upgrades to your home often adds value, so you’ll want to meet with your insurance agent to update your policy and ensure your coverage takes these upgrades into consideration. After all, if you’ve just spent a lot of money on improving your home, you’ll want to make sure you’re doing everything you can to protect it.
For a free homeowners insurance quote or to learn whether you’re carrying enough coverage, call 1-800-499-3612 or meet with a Homegrown Pro in your community.