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How to Hire a Contractor
Whether you are planning a remodel of your entire home or just want a small slab of concrete, be careful when hiring a contractor. Though many builders, designers, architects, and contractors are legitimate professionals, shysters abound.
Ask for Referrals
Check with friends, neighbors or your local realtor for referrals. Home improvement and building supply stores have ongoing relationships with contractors. Check trade associations. Word of mouth is the most dependable form of advertising for reputable firms.
Get Multiple Bids
Don't be afraid to get more than one bid. The more bids the better. Whatever the project, get three bids. You’ll be able to discern whether pricing and policies are competitive, and you can then bargain. Contractors routinely lower bids. Take advantage of this practice.
Do not necessarily go with the lowest bid — you often get what you pay for. If a contractor’s bid is substantially lower, ask why. Will he be using inferior products? Is the contractor too inexperienced to accurately estimate the amount of labor and materials required?
Normally, project costs are set either at a fixed price or a “cost-plus.” Find out which method your contractor plans to use. In the case of a fixed price bid, changes made during construction are re-negotiated. In a cost-plus bid, the contractor does the job, then submits receipts along with an invoice for labor.
Limit the down payment. Some state laws limit the amount of money a contractor can request up front. Contact your state or local consumer protection agency to find out the laws for your area.
Do not hire someone who has “just completed work in your area” and offers you bargain prices. If the contractor’s address is a post office box instead of a street address, run the other way. Phone numbers should also be checked.
Refuse offers from slick salesmen who use high-pressure tactics. Under no circumstances should you agree to hire someone without a written estimate, contract, contractor’s number, and local references.
If you want to finance the project, arrange for your own loan. Never agree to pay for all the work up front.
Arrange to make payments during the project contingent upon completion of defined amounts of the work. For instance, if a contractor is landscaping your backyard, agree to pay part once the patio is done, more when the sod is laid, and the rest when the project is completed.
Include written warranties, which must be identified as either “full” or “limited.” Full warranties cover all faulty products, including the cost to repair, replace, or refund. Limited warranties leave room for loopholes. Review them with care.
Your contract should specify which party is responsible for obtaining and paying for necessary permits. You should also be sure that all pertinent city codes are followed.
Make sure you understand the entire contract before signing. Every contract should include the following:
1) An exact description of the work to be performed. 2) A list of the materials to be used including textures, brands, colors, sizes, and models. 3) The total dollar amount of the contract and a schedule for payments. 4) Additional promises made by the salesperson/contractor. 5) Start and completion dates, warranty information. 6) Cleanup information. 7) The signature of you and your contractor.
Before You Make the Final Payment
Make sure you are satisfied before making the final payment. It will be much easier for the contractor to forget about you if he is at home with your check. As long as you still have it in hand, you can call the shots. But be aware that lien laws in some states allow subcontractors and suppliers to file a mechanic’s lien against your home to satisfy their unpaid bills if you hold payment unnecessarily.
Before making the final payment, make sure that all work meets the standards spelled out in the contract; you have written warranties for materials and workmanship; you have proof that all subcontractors and suppliers have been paid; the job site has been cleaned and cleared of excess materials, tools, and equipment; and you have inspected and approved the completed work.