10 Tips for Evaluating and Hiring a Contractor

So you’ve followed conventional wisdom and have three estimates for your project. You are leaning to hiring the low bidder. What could possibly be wrong with that? In a word, PLENTY.
You need to look much deeper to see if you are getting good value for your money. The first thing you need to know is that many contractors do not charge enough for their services. They may insist on a substantial deposit payment up front from your job when you sign a contract. So what you may think is that the contractor is buying materials and arranging for services for your job when he is actually using your payment to make overdue payments on other past jobs. He may not be able to buy what he needs to do your work even with your substantial deposit payment up front.
That leads in turn to cutting corners on materials, not communicating with you periodically before starting and every day while working on your project, showing up for short, erratic shifts with workers who have questionable skills, giving excuses for why your project is taking much longer than planned, disappearing for days or weeks at a time without notice, not accepting your phone calls or just plain vanishing. Why? They are broke and simply cannot afford to complete your project. And that is where many of the contractor horror stories begin.
Here are a few tips to protect yourself and help assure a smooth running project.

  1. Check your local or state listings to be sure your contractor has proper licensing. Most areas have governmental websites listing license holders. Legitimate contractors will be able to provide paperwork showing they are licensed. Just check to be sure what you are shown is real by verifying with appropriate governmental units.
  2. Get a certificate of insurance from your contractor and any sub-contractors they may use on your project. You want to make sure all contractors who will work on your project have general liability, business vehicle liability and workers compensation insurance in force during the time your project will be underway. A general liability and business vehicle liability protects a third party (most commonly a homeowner in this case) against property damage and/or bodily injury caused by the insured contractor and/or the contractor’s business vehicles. A workers compensation policy covers medical expenses for a contractor’s employees who are injured or become ill as a result of working on your project. Again, legitimate contractors will provide you with the name and contact info for their insurance agent or company.
  3. Some local or state governments may require bonding for contractors, as well. Many do not. Find out independently if your project will require a bond because of local or state law or if none is required. A bond can come in many forms, but most commonly in construction is like an insurance policy that protects an owner by covering the costs of finishing a project should it not be completed for a specific set of reasons. Don’t take a contractors word that they are insured and bonded without checking independently.
  4. Check references. Make a sincere effort to contact not only current AND past customers from several years ago, but also suppliers and banks your contractor uses. Ask past customers about their project details, if it turned out as well or better than expected, if they would hire your contractor again, if the project proceeded as planned or had unexplainable delays and if the amounts agreed up front were the same as the final amounts paid. Ask suppliers and banks if accounts they have with your contractor are in satisfactory standing and are paid as agreed. If you get even a hint of a problem, you may want to move on to the next contractor. Beware of a contractor that says they only pay cash or only shop at the big box stores like Home Depot, Lowes, Menards or others. Most contractors will have a variety of distributor, wholesale and professional sources for products they use beyond common consumer oriented deep discounters or big box stores.
  5. Check online review sites like Angie’s List. Most contractors who have been in business for a few years will have dozens of customer reviews. Read through many of those reviews to get a real feeling for the overall satisfaction level a contractors has with its customers. Even if there are a few negative reviews, read them as well. Realize that no matter what, not every customer will be fully satisfied with their results in hiring a contractor. It’s not possible for a contractor or any other business to please every client every time with their quality level, service responsiveness or price.
  6. Have a written contract with your contractor. Reducing all your thoughts and plans to a written document protects both you and your contractor. The contract should be in clear language, contain specifics on what is to be done, what products (make, model, color etc.) will be used, what the time line would be for construction, and total cost plus financial terms for payments. If you see anything missing or poorly worded, ask that it be changed before you sign. If, during your project, you or your contractor request additional work beyond what is specifically included in your contract, you should demand it be listed in a written change order which would include similar items and terms that both you and your contractor sign.
  7. Before you buy materials to be used in your project, consult with your contractor. Most times, contractors prefer to furnish materials for the projects they do. Why? A project not only requires proper materials, but it also requires proper timing for those materials to arrive and to be ready to install. If you furnish materials and they are wrong, won’t work or are damaged, it would be your responsibility to replace those materials. If you cannot do so on a timely basis, your project will almost certainly be delayed. Some contractors go as far as refusing to provide a warranty on a project where the customer supplies materials. Special ordered materials from non-local sources have the added problems of arranging for return/refund and/or replacement of defective or shipping damaged items. If, on the other hand, your contractor supplies the materials for your project, all of those responsibilities shift from you to your contractor. Whatever cost savings you think you can have by supplying materials can be easily eaten up in delayed project costs.
  8. Insist on not starting your project until 100% of your materials have been delivered or are stock items readily available at local sources. Special ordered materials can take weeks or months to arrive, and if they are wrong or damaged in shipping, getting replacements will also take time. Should you start your project while awaiting the arrival of your special ordered materials and something is wrong when they arrive, your project completion will be delayed. No one wants to wait longer than necessary to complete a project under way when it is delayed awaiting replacement materials.
  9. Tie your payments on the project to progress on the project and include those terms in your contract. A large deposit or down payment up front at the time you sign an agreement is generally not necessary for a reputable, long-standing contractor. However, if special ordered materials are required, it would be reasonable to expect to pay for those materials when ordered. The same would be true if design services or other pre-construction services would need to be completed before your project begins. Locally purchased in stock materials can be purchased and delivered when your project is underway or just a few days before your project is to start. If you make a small deposit or down payment when you sign the contract, it would be reasonable to expect to make a sizable payment when the work actually starts. If your project would be underway for more than a week or so, you may be asked to provide progress payments. Tie any progress payment to reaching certain mutually agreeable milestones in your project. And don’t make the final payment until your job is 100% complete.
  10. Be comfortable with your contractor. Realize that your contractor will be in your home and on your property during your project either directing others or providing work themselves. Do they communicate effectively and efficiently with you before the project starts? Do they pressure you to make decisions before you are ready? Do they answer your questions or concerns to your satisfaction in easily understandable language? Do they offend you or put you off in any way? Are they easy to reach by phone, text or email? Do they respond to you on a timely basis? Do they really listen to you and offer advice that makes sense to you? What do their past clients and suppliers say about them? You can likely expect the same patterns to continue if you hire them to do your project.

Sure, the price of a project is important, but so is the level of comfort you have with the contractor you hire. Following these tips will help assure you of making the right decision for you. You can have your choice of any two of these items, but not all three: the best price, the best quality or the best service. One will need to give way to have the other two. Which will you select?