Updated Nov 8, 2022
Homeowners embarking on a renovation project should approach the selection of a contractor as they might approach hiring an employee. You’re going to trust this person with your money, the look and feel of your home, and, unlike most employees, you’re going to trust this person to be in your home, possibly for an extended period of time.
Here are the steps you should take when choosing a contractor for your home improvement project.
Before you even begin the search for a contractor, you should get flat on exactly what you want and how much you have to spend. Making changes to plans after a project has begun is the most common reason renovations go over budget. So do your research, make calls about what you do (and don’t) want, and stick to it. And once you’ve decided, stay off sites like Pinterest, which can inspire you to veer away from your plans and inflate your budget.
One of the best ways to find a great contractor is to ask for referrals from friends and family, and even better if they worked with the contractor on the same type of project. You’ll want to ask questions about quality of work, how they felt about the contractor’s team, project timeline, communication style, budget, and overall satisfaction with the project. If you can, ask the referrer to see the completed work and assess the quality for yourself.
“The best is to get referrals from folks you know and trust and definitely ask to see samples of the type of work you want done,” says Jeremiah Wiggins of Bohemia Realty Group. “When looking at samples it’s good to try and see something that was done six to twelve months ago, which will give you a good idea as to how their work stands the test of time and seasonal changes.”
“Be sure to look for reviews before even contacting a contractor. It might reveal everything you need to know before wasting your time,” says Tonya Bruin, CEO at To Do-Done. Check review sites like Yelp and Google to see what clients say about their experience with the contractor. You can also check out our contractor reviews, which include companies like Michael & Son and ABC services. Don’t forget to check the Better Business Bureau as well to see if they’ve had any complaints lodged against them.
Once you feel like you’ve found a few contractors you’re interested in hiring, set an appointment to meet them face to face. Get a sense of their communication and working style and how organized they are. Ask about the number of projects they work on at any given time (an overbooked contractor could mean shoddy work or a long project timeline), whether they work with subcontractors, and how long they’ve worked with them.
General contractors should be licensed to work in your state. You can also follow up with your state’s contractor licensing board to inquire about any complaints the contractor may have received or whether any disciplinary action has ever been taken against them. Consider also checking local court records for any legal action.
Many states will also require general contractors be bonded and insured, but even if they’re not required by law to be, it’s best to choose a contractor who is both.
Having a “bonded” contractor means that you’ll be financially protected if they fail to complete the job, fail to pay for permits, or fail pay their subcontractors and suppliers. To confirm that they are bonded, ask for a bond number and certification and verify with the local issuing authority.
Having an insured contractor means that you won’t be held liable should an accident occur during the project. For example, if a worker falls off a ladder and breaks an ankle, the contractor’s insurance will be tapped, not yours. To confirm your contractor is insured, ask to see their certificate of insurance, then call the insurance company to verify the policy is active and will cover your project.
Make sure past clients can provide references for the same type of work. If your job will include plumbing or electrical work, for example, make sure you speak to past clients who have had that specific type of work done. You might even consider visiting current project sites or asking to see completed work. Beware of any contractor who cannot provide past client references.
We recommend getting quotes from at least three contractors to compare cost. All bids should include the cost of materials, labor, and profit margin. Keep in mind that you can absolutely negotiate a bid with a contractor, and that the contractor with the lowest bid isn’t necessarily the one to choose. When it comes to general contractors, you often get what you pay for, so while a low bid may look appealing, be sure to compare that against the quality of their work and what their references have to say about them.
Read more: Cheapest home warranty.
Run a background check on your contractor. This person will be in your home for an extended period of time, possibly without you. You’ll want to make sure they have nothing concerning on their record.
Many residential renovations and nearly all additions will require a permit issued by your local municipality. Get these in order before you sign a contract. If the contractor suggests working without permits, walk away and choose another contractor.
When putting ink on paper, make sure the contract does not assume anything. The contract should include a detailed scope of work, payment schedule, timeline, and exactly what materials they will be using (including model numbers and suppliers). Your contract should also establish ground rules for when and where contractors are allowed in your home and in what condition your home should be left in at the end of each day.
If you do make changes after the contract has been documented and signed, be sure to document those changes in an addendum to the contract and have all parties sign.
Once you find the right contractor, it’s unlikely they’ll be able to start on your project immediately. Good contractors are in demand, and you don’t want your project to drown in a sea of other renovations. Be patient and know that waiting for the right time in the contractor’s schedule will pay off.
You may have a better chance at getting started sooner than later if you choose to renovate or remodel during the winter months. For most general contractors, this is off season, so many will be trying to drum up business. In fact, some even offer discounts for projects taken on in the off season.
While the project is ongoing, make sure to collect copies of lien releases and materials receipts from your contractor. If they fail to pay material suppliers or their subcontractors, you could be at risk for having a lien put against your house. Get these before you make progress payments.
“One thing to be worried about when talking to a contractor is if they ask for the full payment upfront in cash,” Bruin says. “Often, contractors will ask for a deposit at first, which is standard, however, you should only pay the full price once the job is complete and you received what was promised. If they request full payment upfront, they might be covering themselves in anticipation of a sub-par job on their behalf, which guarantees they’ll be paid regardless of the work they’ve done.”
A safe down payment amount is in the neighborhood of 10%, and some states even have caps for the amount a contractor can require for down payment.
Before you make your final payment, do a walk-through with the contractor to ensure everything has been completed in its entirety and to your expectations. You’ll have no recourse if you pay your bill in full and then discover that details were left undone.
The contract should include the full scope of work, budget, payment schedule, and materials list, and should always be amended in writing when plans change.
Justin Lavelle, CCO at BeenVerified explains: “While talking with your contractor about the repairs you’d like made, you add in a couple ideas. He gets excited about the ideas and even makes his own suggestions. You don’t put these ideas into your contact agreement because you think you had such a clear verbal understanding, then you’re surprised when the contractor says those upgrades weren’t included in the price—and that you’ll have to fork over more money for them. A legal contract is your safety net should any issues arise. Be sure to review every detail before signing. If you are not comfortable, ask an attorney to review it before you sign. It’s a worthwhile investment to avoid problems on the back end.”
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