8 Best Practices for Hiring a Contractor

A homeowner and contractor shaking hands over a home improvement project.

Home improvement projects help make your dream home a reality, and to do that, you may have to hire a home contractor. A home contractor, or general contractor, is employed by the homeowner to handle the material, labor, and equipment of a home improvement project as well as oversee the day-to-day tasks. This is a huge responsibility, and as the homeowner, you want to make sure you hire the right person for the job. Here are eight best practices for hiring a professional contractor who you can trust.

Research prospects

First, think about what type of project it is, and set your goals.  Is it a small, medium, or large project? Are you making structural changes to your home? Asking these questions will help you narrow down qualified candidates.

Ask friends, family, or other professionals in the industry for recommendations and which contractors will give you the best service and value. Look into any previous home projects they performed and the outcomes. Do your due diligence and check with your state or province’s consumer protection agency or Better Business Bureau to see if they have any history of disputes.

Perform interviews

Since this person will be entering your home and bringing in subcontractors, they should be someone you trust. Complete a phone interview or do a walk-through of the project to vet your prospects and look for any red flags. Some common questions to ask are:

  • Have they worked on similar projects?
  • Can they provide references or a list of previous clients?
  • Are they licensed to work in your area?
  • Are they insured and bonded?
  • Can they provide a detailed contract?

When will they be able to start the project?

Get multiple bids

Getting multiple bids will give you more options and improve your chances of finding an ideal candidate. Assess building materials, timelines, and how they approach their work to see if they are a good fit. This process will also help you compare prices and make sure the contractor is providing reasonable and realistic quotes.

Even though you have a budget, remember that you get what you pay for. An unusually low bid could mean that the contractor is cutting corners, using low-quality materials, or desperate for work.

Get everything in writing

You and your contractor want the project to be successful, but that doesn’t mean there won’t be bumps in the road. A well written contract will clearly outline expectations and provide a protocol for handling disputes. It is a means of protecting both parties. Some items in a contract should include:

  • Milestones for the project
  • Proof of liability insurance and worker’s compensation
  • Start date and expected completion date
  • Specific materials and products
  • A requirement that the contractor obtain a lien release
  • Payment schedule
  • Change order provisions
  • A guarantee that the contractor will file for all necessary permits
  • A termination clause that details what factors will play a role should either party terminate the contract

Set a payment schedule

The payment schedule should be outlined in your contract. It’s common for a contractor to ask for about 10 percent up front, 25 percent payments throughout the project, and the final 15 percent upon completion. If they request large portions of the bid up front, say 50 percent, then this is worth discussing with them. They may have financial issues or have concerns about getting paid on time. Never pay in cash, and always ask for a receipt of payment.

Communicate

Schedule daily or weekly check-ins so that your contractor can keep you updated on their progress. Perform walk-throughs to inspect their progress and talk through any challenges they may experience. This is a great way to make sure that you both are on the same page and that they are meeting milestones for the project. If there are any misunderstandings, you’ll catch them quickly and be proactive about correcting mistakes.

Keep a job file

Maintain detailed records of the project, including verbal and written communication, milestones, photos, certificates of insurance, and payment receipts. Keep a physical copy of the contract and update it with change orders.

Before you make your final payment make sure they have completed the project according to the contract. Get physical copies of any warranties and payments to subcontractors and suppliers. Inspect the work and the job site and make sure it has been completely cleaned.

Be flexible

Despite hard work and all the best intentions, the contractor still may experience unforeseen circumstances during the project, and this can be frustrating for any homeowner. There may be delays in receiving materials, or they may encounter conditions such as mold or rot that add time to the project. This is where open and consistent communication will help both of you navigate these obstacles. Discuss and document new timelines or change orders.

Many great contractors are professional and take pride in their work. By being proactive from your very first meeting, you can work together to make your home improvement project successful and achieve your dream home.

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