How to Find a Reliable Home Contractor
For most homeowners, the hardest part of any home renovation project isn't the work itself -- it's finding a competent and reliable contractor to do the job. Installing kitchen cabinets, knocking down walls or retiling floors are straightforward tasks compared with the struggle of hiring a quality contractor who will perform at a high level from start to finish.
Everyone knows stories of horrendous contractors who tore apart the kitchen and never returned or projects that ended up costing three times the contractor's original estimate.
"Those are the nightmare kind of stories I hear all the time," says Angie Hicks, who in 1995 started the company that would become Angie's List, a go-to resource for reviews of contractors and other service providers.
Even with a good contractor, home renovation can be stressful, expensive and involve unpleasant surprises, such as rotted subfloors that are revealed when tile is removed or dangerous electrical wiring or leaking pipes behind walls.
Here are some tips to find the right contractor while still keeping your budget -- and sanity -- under control.
-- Know what you want before you get estimates.
-- Ask friends, relatives and co-workers for references.
-- Interview at least five contractors.
-- Be realistic about availability.
-- Ask what work will be done by subcontractors.
-- Choose the right contractor for the right project.
-- Check licenses, complaints and litigation history.
-- Don't pay more than 10% of the total before the job starts.
-- Don't sign a contract for your entire renovation budget.
-- Talk to the contractor frequently.
-- Get lien releases and receipts for products.
-- Don't make the final payment until the job is done.
[Read: 7 Living Room Renovation Ideas on a Budget]
Know What You Want Before You Get Estimates
First things first: "Start with a plan and some ideas," Hicks says. "Don't start by talking to contractors." You'll get a more accurate estimate if you can be specific about what you want done and the materials you would like to use to make it happen.
Ask Friends, Relatives and Co-Workers for References
People in your neighborhood who have done similar projects are great resources. If you know anyone in the building trades, ask them as well. Employees of local hardware stores may also be able to provide contractor referrals.
Interview at Least 5 Contractors
Ask a lot of questions and get a written proposal with an estimate from each. When you compare bids, make sure each one includes the same materials and the same tasks, so you're comparing apples and apples. Dan DiClerico, smart home strategist and home expert for HomeAdvisor, recommends reaching out to as many as 10 contractors, but a detailed conversation and estimate from at least five will help you feel more confident as you compare options and make decisions about the project. "It really is such a valuable part of the process from an education and experience perspective," DiClerico says.
Be Realistic About Availability
A contractor's availability can depend on the time of year and where you live, but the best contractors have consistent work, so expect to wait a few months for your project to start. "Three months is going to give them time to hopefully finish up their current project and get yours on the calendar," DiClerico says. "But if you can plan it six months out, that's even better."
Ask What Work Will Be Done by Subcontractors
A large renovation may require the contractor to bring in subcontractors for specialized work such as electrical, plumbing or detailed carpentry. You'll want to know when outside workers will be in the home, and you also want to know that your contractor will manage and supervise their work. "(Homeowners) really should have as little interaction with the (subcontractors) as possible," DiClerico says.
Choose the Right Contractor for the Right Project
Someone who did a good job tiling your neighbor's bathroom isn't necessarily the right person to build an addition to your home. Aim to find a company that routinely does the kind of project you want done. "You don't want them to use you as a guinea pig," Hicks says.
Check Licenses, Complaints and Litigation History
General contractors and most subcontractors should be licensed, though the procedure varies by state and municipality. Check your state disciplinary boards, Better Business Bureau and local court records for problems. Ask the contractor for a copy of his or her license and copies of the licenses of the subcontractors who will be involved in the project.
Check References
Talk to both clients and subcontractors, who can tell you if the contractor pays them on time. Ask previous clients if the contractor's estimate was close to the final cost, if they got along with the project manager and if it's possible to see closeup photos of any completed work.
Read Online Reviews
Read reviews on sites like Angie's List, HomeAdvisor, Yelp and Google to make sure the contractor is the right person for your job and will work well with you. Keep in mind that reading reviews is not a substitute for checking references. While a series of negative reviews over a long period of time should raise a red flag, one negative review or particularly nasty comment may not provide an accurate picture of the business.
[See: 12 Home Decorating and Design Tips From Experts]
Sign a Detailed Contract
Make sure your contract spells out exactly what will be done, including deadlines, payment schedule, the exact materials that will be used down to the model number and who will provide which materials. If the builder's contract is not detailed enough, write up your own or provide addendums. Any change in the project, whether you change your mind about products or request additional features, should generate a written change order that includes the new work, materials and cost.
Get the Proper Permits
Nearly all home renovation projects require permits. Many fly-by-night companies, as well as some licensed contractors, will suggest that the job can be done without permits to save money, or they may not even broach the topic. Not only could that violate local ordinances and subject you to fines if you're caught, it means the work will not be inspected by the city or county to make sure it's up to code. Unpermitted work can also cause problems when it's time to sell your home. Be wary of contractors who ask you to obtain the permits -- that's the contractor's job.
Don't Pay More Than 10% of the Total Before the Job Starts
You don't want a contractor to use your money to finish someone else's job. The contract should include a payment schedule and what triggers each installment to ensure you're not paying for work on schedule when the contractor is behind the projected timeline. Expensive materials needed early on may require more deposit upfront to cover the cost, but that should be laid out in your payment schedule.
Budget for Unexpected Costs
No matter how careful you and the contractor are in preparing for the job, there will be surprises that add to the cost. "They can't see through walls," Hicks says of contractors. Expect to spend at least 10% to 15% more than what is estimated in your contract.
Negotiate Ground Rules
Discuss what hours the contractor can work at your home, what kind of notice you'll get, what bathroom the workers will use, where they will park and what will be cleaned up at the end of every workday.
Talk to the Contractor Frequently
Regular talks with your contractor are typical, and you may even speak daily when discussing a change order. If you see a potential issue with the work, speak up immediately. Something that is done wrong will be harder to fix later after your contractor has packed up and moved on to the next job. But you don't want to micromanage -- DiClerico stresses that you should hire a contractor you can trust to give honest updates and oversee work.
Verify Insurance Coverage
In case of accidents or weather events that cause damage to your home while work is being done, know what is covered by your homeowners insurance and what is covered by your contractor's business insurance. Get a copy of the company's insurance policy.
[Read: How to Choose Energy-Efficient Windows for Your Home]
Get Lien Releases and Receipts for Products
If your contractor doesn't pay his subcontractors or suppliers, they can put a mechanic's lien against your house. You want copies of receipts for all the materials, plus lien releases from all the subcontractors and the general contractor before you pay. You can ask for some of those when you make payments that cover completed subcontractor work.
Don't Make the Final Payment Until the Job Is 100% Complete
Less-reputable contractors could finish most of the job and then move on before they get to the final details. Don't make the final payment until you are completely satisfied with the work and have all the lien releases and receipts. Make this clear in your payment schedule.
Teresa Mears writes about personal finance, real estate and retirement for U.S. News and other publications. She was previously the real estate blogger for MSN Money and worked as the Home & Design editor for The Miami Herald. During her journalism career, she worked on coverage of immigration, religion, national and international news and local news, serving on the staffs of The Miami Herald, The Los Angeles Times and the St. Petersburg Times. She has also been a contributor for The New York Times and The Boston Globe, among other publications. She publishes Living on the Cheap and Miami on the Cheap. Follow her on Twitter @TeresaMears.
