Everything You Need To Know About Hiring A Contractor Part 2 Of 3

Part II: Research Your Strongest Prospective Contractors

Start your homework to pare down the list you compiled after reading Part I of this series.

Ask the key questions.

Getting satisfactory answers to these questions will help you narrow down your search:

• How long have you had your business? You want to hire a company that is well established. You should also check out any company you are considering with consumer protection services in your area. You can find out if there are any consumer complaints that haven’t been resolved. Just remember, that finding no registered complaints doesn’t mean that there were not previous problems. People may not have reported them or the contractor may have several different names for his/her business.
• How many projects of the same type as mine (i.e. how many kitchen renovations) have you done in the last year? Ask the contractor to list them. That way you can see if the contractor is experienced in the type of project you are planning.
• Are you registered and licensed in this state? Most states require that plumbing and electrical contractors be licensed, but licensing and/or registration are only required of contractors, specialty contractors, and remodeling agencies in 36 states. You can find out whether your state has licensing statutes by checking with your state consumer protection agency or your local building department. If your state does require contractors to be licensed, ask your contractor to show his/hers to you and check the date to make sure it’s not expired. All credentials must be active during the period your work is being done—check after you've hired your pro as well. Don’t just accept a license or registration number—that doesn’t tell you that it's active.
• Can you please give me a list of references? The contractor should be able to provide the names and contact information (addresses and phone numbers) of at least three people who hired him/her for a project like yours. Ask when each project was finished and ask if you would be able to go see it. Also ask to see jobs that are currently ongoing.
• Does this job require a permit? Building projects (even simple ones like a deck) require a building permit in most states and localities. The contractor should get the required permits before beginning the job. If the contractor suggests that you get the permit yourself, this should arouse your suspicions. The contractor may not be licensed or registered according to the laws in your state or locality.
• Are subcontractors going to be used on this job? If the answer is yes, meet the subcontractors and check that their licenses (if required) and insurance coverage are current. Also ask them about their experience working with this contractor and if they have gotten paid on time. If the contractor does not pay the subcontractor or a supplier on time for your project, this could result in a “mechanic’s lien” being put on your home and the unpaid subcontractors or suppliers could force the sale of your home in order to get the money for their work. In order to protect yourself from this, ask the contractor and all subcontractors and suppliers to sign a lien release or lien waiver prior to starting work on your project.
• What types of insurance do you have? The contractor should carry property damage insurance, personal liability insurance and worker’s compensation. Ask the contractor to give you a copy of his/her insurance certificates. Check the date on them to make sure they are not expired. Do not hire contractors who don’t have all of the insurance listed above or you could be liable for any damages or injuries that happen during the work on your project.
• Will you give me a written estimate? Be sure to get estimates from more than one contractor—three is ideal. If the bids are widely different from each other, get more bids. The lowest bidding contractor is not necessarily the best one for your job, so don’t choose your contractor solely based on the lowest bid. Do not decide on a contractor merely because he/she bid the lowest. Taking bids on your project won’t necessarily get you the best contractor, but it could give you a ballpark number for what your project may cost.

Do a "gut check."

In addition to the tangible information you gather, consider these intangibles after meeting with each prospective contractor:

• Think about whether you feel you will be able to communicate openly with the contractors you are considering hiring.
• Think about whether you feel he/she will take the time to listen to what you have to say and really find out what you want.
• Find out how many other jobs he/she is currently working on and then decide if you think he/she will be able to start and complete your job on your timetable.

Check references.

Hearing about former customers’ experiences with the contractor can help you decide if this is the right contractor for you and your project. Some helpful questions include:

• Was the job finished on time?
• Were you happy with the work?
• Did you feel like you were kept informed throughout about the progress, the status of the project and any problems that arose?
• Did everyone show up on time?
• Did the workers clean up when they were finished?
• Were there any costs you didn’t expect and what were they?
• Would you hire this contractor for another project?
• Would you recommend this contractor to others?
• May I visit you and see the finished project?

Know the warning signs of a disreputable contractor.

Here are some signs that the contractor may not be legitimate, may not follow the letter of the law and may be trying to scam you:

• The contractor goes door-to-door, trying to solicit business.
• The contractor asks for full payment in advance.
• The contractor does not have a listed business phone number.
• The contractor asks that you get the building permits yourself.
• The contractor tells you that your project is a “demonstration.”
• The contractor offers you a “better deal” or a discount if you help him/her find other customers.
• The contractor pushes you to make a decision on the spot.
• The contractor will only accept payment in cash.
• The contractor offers guarantees that sound really long.
• The contractor suggests that he/she can use materials that were left over from another project he/she has finished.
• The contractor suggests that you could get a loan from a lender he/she knows. This could be a home improvement loan scam that could cause you to lose your home.

Once you've selected a contractor for your project, nailing down the contract specifics is essential—we detail contractor contracts in Part III.