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TIPS on How to Hire a Contractor

February 18, 2020

Everyone knows hiring a contractor can be a stressful process, because hiring the wrong contractor may lead to subpar work, hidden and unintended costs, to even legal battles. This is why we’ve decided to compile a few simple tips you can use to help you choose the right contractor and avoid being another contracting horror story.

Understand the Scope of Your Project

1. Understand the Scope of Your Project

The first thing you need to ask yourself is how big is my project going to be. For a small project, like having pavers installed into your driveway, your best would be is to go with a contractor who specializes in the job that you’d like to get done. A general contractor should suffice if your project is a medium-sized project and does not require structural alterations to your home. If it is a large project, we would suggest hiring a designer who has the ability to wear the hat of a contractor and an architect.

Conduct Initial Research

2. Conduct Initial Research

Once you’ve figured out the type of contractor you’ll need, it’s time to conduct some research about which contractor to hire. We recommend you ask friends and colleagues if they know or have worked with any contractors that they would recommend. You should also search for local contractors in your area to expand your candidate pool. A good way to weed out prospective contractors is to make sure they have professional and up-date websites and make sure you look them up on third-party websites like Yelp, Houzz, Angie’s List etc to see their ratings and reviews. We recommend having a list of about 10 to 13 possible contractors that you may want to hire.

Conduct Phone Interviews

3. Conduct Phone Interviews

Now that you have your list of prospective contractors, you have to begin whittling down the list to about 4 - 6 contractors you’d like to meet in person. During the phone call, keep in mind the manner in which they speak to you and their answers to your questions. Here are a few things to keep in mind and questions we recommend asking when you talk to a prospective contractor.

Things to Keep In Mind:

  • Do they answer the phone in a professional manner?
  • Do they speak to you with respect?
  • Are they able to do a project your size and do they seem interested and excited about your project?
  • Are they up-front and answer your questions directly or are they trying to be you.

Questions to Ask:

  • Are they willing to provide financial references such as from suppliers or banks?
  • Are they willing to give you a list of past clients?
    • Why it’s important that the contractor is willing to share his past client list:
      • Because it demonstrates how confident the contractor is about his reputation and the quality of his work
  • How many other projects will they have going on at the same time?
  • How long have they been a contractor and how long have they worked with their subcontractors?
  • Are they licensed?
    • The specific licenses or certifications your contractor should have will depend on the work your project requires.
    • Why it’s important that your contractor is licensed:
      • Without the proper license, the contractor and company are not legally allowed to work
      • Having a license means that they went through the proper training and have demonstrated the required skills to be able to complete the task, in addition to continued education to maintain the license.
  • Are they bonded?
    • A contractor is said to be bonded when it has purchased a surety bond.
    • A surety bond is essentially a guarantee that the contracting company is going to complete the work they agreed to do. If the company is bonded and they fail to follow through and do not finish the project, the customer can make a claim against the bond and if the claim is successful the customer will be compensated for their losses.
  • Are they insured?
    • The contractor needs to have insurance for both himself and the workers and for you the customer
    • The contractor should have worker compensation insurance for their workers because if an employee happens to get injured on the job and the contractor does not have workers comp, you, the homeowner, may be liable to lawsuits by the injured employee.
    • The contractor needs to also have general liability insurance. General liability insurance protects the homeowner against damages and accidents that may happen on the job. For example, if your contractor accidentally floods your basement or collapses your sewer line the insurance will cover it and you will not be held liable or have to pay for the repairs.
  • When will they be able to start the job?
  • Will they provide you with a detailed and transparent contract in writing?

In-person Interview

4. In-person Interview

Once you’ve narrowed your list down to about 4 to 6 contractors set up in-person meetings with them for estimates and further discussion. The contractor should with relative ease be able to answer your questions in a satisfactory and transparent manner. It is important that you and your contractor are able to communicate well so that the project has the best chance to be a success.

More Research

5. More Research

After you have met with your final candidates, it’s time to do some final research, before you make your decision. Call up past clients to find out their thoughts and opinions about how their project went and ask to see pictures of how their project turned out. Another great thing to do is to visit a current job site to get a feel for how the contractor works; ie is the job site safe and organized, are the workers courteous and careful with the homeowner’s property. One last thing you should do is make sure you check your state’s consumer protection agency and your local Better Business Bureau to make sure they do not have a history of disputes or problems with clients or subcontractors.

Make Plans / Get Bids

6. Make Plans / Get Bids

Now that you’ve narrowed your potential contractor down to the final few and have looked into their track record it’s time to start focusing on your project. A few good indicators that will help you determine the quality of the contractor are the quality and depth of their blueprints, how transparent they are about the cost of the project and how in tune to what the homeowner would want out of the project. Make sure you ask everyone to break down the cost of the project: the cost of materials, labor, project margins and other expenses.

Set up the Payment Schedule

7. Set up the Payment Schedule

Make sure you set up the payment schedule before you commit to a contractor because it will give you an insight into their psyche and financial situation. For example, if the contractor insists on being paid half of the bid up front that could be a major red flag because it may mean that the contractor is under financial hardship or is not confident in their work and is afraid the customer will refuse to pay for the work when the project of the work is completed. For projects of the larger size we recommend a payment schedule of an initial down payment of 10 percent, three payments of 25% evenly spread out throughout the project and one final payment of 15% once the project has been completed.

Make sure the Contract is in Writing

8. Make sure the Contract is in Writing

Make sure every detail from the project is put into writing; a list of all supplies and their amounts that will be needed, payment schedule, proof of liability insurance, proof of worker’s compensation, the expected start date and an estimated completion date. Having everything in the contract will allow for the basis of transparency for the project and documentation just in case there are disputes or misunderstandings in the future.

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