Hiring a contractor to work at your home can be daunting because your money, home and health are all at stake. Finding the right contractor is like finding a doctor or lawyer or other professional whom you can trust with your life or your most valuable assets.
Problems can range from escaping pets or loud music, to stolen valuables, damaged furniture, or over billing for work that was never done. Should a crew member not follow installation guidelines, it could result in a major lawsuit or leave behind a big toxic mess.
Clearly, hiring a contractor can be risky business. For most homeowners who have little knowledge or experience, this is the time to do some serious homework so that you become familiar with the tradespeople who will be working in your home. The more knowledge and experience you have, the better the hiring decision you will make.
During the days or weeks ahead, you and your contractor will essentially be business partners. Therefore, it is vital that you choose someone with honesty, integrity and experience--someone who listens carefully to all your needs and who can communicate clearly. Make sure he/she passes the used car test. If you wouldn’t buy a used car from this person, don’t hire him or her to build or remodel your home.
Choose a person or a company that fits your style, personality and budget. If you prefer a warm, personal approach, working with a handyman may be best for you, especially if it’s a smaller job. However, if it’s a larger or specialized remodel and you need to get the job done quickly and efficiently, hiring a general contractor may be the best way to manage a more professional crew.
In either case, we recommend that you sit with the contractor in your home and have a heart-to-heart discussion about all your special needs. If you have health issues, make sure he/she understands the rules of the house: no toxic products shall pass through these doors, and all your mess gets cleaned up and ideally recycled or re-purposed. It is up to you to articulate clearly just what you will and will not tolerate in your home. If they feel uncomfortable with that, they probably won’t agree in writing; so look for someone who will. Better to find this out sooner, rather than later.
Where do you find honest, responsible and competent contractors?
- Start by asking neighbors, friends and family who’ve had recent work done for them.
- Visit jobsites in subdivisions where homes are being built or remodeled.
- Check your local building department for licensed trades people.
- Check national building and trade associations such as nahb.org (National Association of Home Builders), or nwfa.org (National Wood Flooring Association), which has certified installers. A few other online sources include: Angieslist.com, HomeAdvisor.com, Thisoldhouse.com and consumer.ftc.gov.
- Check with lumber yards and hardware stores to see if they know of trustworthy contractors who pay their bills.
- Call architects, other local contractors, and building inspectors. Word travels fast within an industry, and most tradespeople know of others with good reputations in their area.
- Check with the Better Business Bureau to see if there are complaints from customers or subcontractors.
Rule #1: Don’t Assume.
Many contractors don’t speak English very well. That doesn’t make them unreliable, untrustworthy or incompetent. Don’t judge others based on their language skills. Remember, you are not looking for an academic; you are looking to hire someone with skills to fix a leak, paint a wall, install a floor, install a kitchen, fix a door or window, etc. And don’t be fooled by the size of their truck. Yes, a big clean Dodge Ram may look nice in your driveway, but it doesn’t indicate that someone is honest, competent or can follow your instructions. Remember, some of the best rip-off artists drive big fancy cars.
Finally, don’t assume they are suitable just because they have 20 years’ experience. They may have installed a certain product for 20 years, but they may have zero experience with your new eco-friendly product that has different application instructions. There is always a learning curve with new products and often younger contractors are better suited.
Rule #2: Trust, but verify.
Here are some questions to ask your neighbors, local associations and other contractors:
- Questions for homeowners that were referred to you:
- Was the work completed satisfactorily? If not, what could they have done better?
- How long did the project take to complete, and was it completed on time and on budget?
- What made that project a positive or negative experience?
- Did the workers show up on time?
- Did they use the materials that you requested?
- How did the contractor handle problems?
- Did the workers clean up after they left?
- Would you hire them again?
- Questions for trade associations, city/town hall building department:
- How long has the contractor been a member of your association?
- Does this contractor hold a valid license?
- What type of coursework or testing have they completed?
- What are they certified to do?
- What type of permits do I need?
- Question for other local contractors, architects or inspectors:
- What is the contractor’s reputation around town?
- Have you ever worked directly with the contractor? If so, what was your experience in terms of honesty, integrity, job performance, cleanliness?
- Would you hire them to work at your home?
Rule #3: Interview at least three contractors.
- How long have you and your company been working in this community?
- Are you a member of any trade associations? For how long? Any special awards?
- How many jobs like mine have you done since you started working?
- What type of eco-building materials have you used so far?
- Will you be willing to discuss any new eco-building products with the manufacturer or retailer before using to make sure they are applied correctly?
- What techniques will you use to minimize waste, reduce dust and toxins from the work environment?
- Have you ever worked with a chemically sensitive client before? Explain how you would act differently at this jobsite?
- Do you carry insurance that protects you and me from liability in the event you or your subcontractors injure themselves or my property? If so, will you provide me a copy of that insurance policy so I can give it to my insurance agent?
- Provide the name, address, and phone number of at least three projects like mine that you have you completed recently?
- Will this project require a permit? Most states and localities require permits for building projects, even simple jobs like decks.
- How many other projects will you be working on at the same time as mine?
- How long have you worked with your subcontractors?
- How often will you be on the jobsite to handle issues that might arise?
- Will this job be bid or will it be based on time and materials?
- How much do you require up front? What does the rest of the payment schedule look like?
Rule #4: Visit current job site of three contractors.
One of the best ways to know how a contractor operates is to visit him or her at their work. Ask if they would not mind your stopping by for a few moments to see their crew in action. No big interruption, just a brief visit. Most won’t allow this, but it’s a telling sign if they do.
When you visit, check out how the other contractors work. Is the jobsite neat and safe? Are the workers courteous and careful with the homeowner’s property? How they manage this job probably won’t be much different from how they treat yours. If it’s shocking, messy or smelly, better ask questions now to avoid the suffering later.
Rule #5: Get Bids in writing from three contractors.
Make sure everything to be done is spelled out in writing. The contract is one of the best ways to avoid problems before you begin. It protects the contractor and the homeowner. To avoid miscommunication, make sure all concerns are addressed. Do not accept vague proposals written down on the back of a business card.
Ask each bidder to break out the cost of materials, labor, profit margin and other expenses. Generally materials account for 40%, and the rest is labor and overhead. Typical profit margin is 15-20%.
The bid should include the following items. If it does not, then insist that they be added.
- A list of the names of all subcontractors working on this project
- Details of precisely the scope of work to be done
- Detailed list of all materials used and where they are purchased from. This step is essential if you want to be sure the materials are acceptable to you. The more you can buy up front, the better. If you rely on the contractor to do your purchasing, do not expect them to buy products that are safe or non-toxic. They will typically buy what they are used to buying without regard for your special needs.
- The contractor’s obligation to get all the necessary permits
- A sequence of primary construction tasks
- Details of how change orders will be handled
- An express limited warranty
- How to handle disputes
- Payment schedule
- Proof of liability insurance and worker’s compensation payments
- Expected start date and completion date
- A list of what the contractor will and will not do. For example, is site cleanup and trash hauling included in the price? A broom clause requires all contractors to be responsible for all cleanup including spills and stains.
- Lien releases from all subcontractors and suppliers
- A written statement of your right to cancel the contract within three business days if you signed it in your home or at a location other than the seller’s permanent place of business.
Rule #6: Don’t choose the lowest bid.
Almost everyone agrees that choosing the lowest bid is a bad idea. While it may be tempting, a low bid, often means that the contractor has left something important out of the bid and you’ll probably end up paying for it later. To save money, the contractor may cut corners or may eventually walk off the job. He may also try to make up the difference with inflated change order charges.
What is more important than hiring on the basis of price is hiring someone you can trust and feel comfortable with. How well you communicate with your contractor is one of the most important factors in a successful relationship. All things being equal, it’s better to spend more money and get someone you are comfortable with who will do the job correctly and to your satisfaction.
Payment schedules can sometimes speak to the contractor’s financial status or work ethic. For smaller projects, pay by check or credit card. Never pay with cash. If they want half the bid up front, they may have financial problems or be worried that you won’t pay the rest after you’ve seen their work. For large projects, a schedule usually starts with 10% at signing, three payments of 25% evenly spaced during the project and a check for 15% when every item on the punch list has been satisfactorily completed. Some state laws limit the amount of money a contractor can request as a down payment. Contact your local consumer agency to find out.
Rule #7: Don’t make that final payment until you’re satisfied.
Although this article is about hiring a contractor, it’s just as important to know how to close the deal with your contractor. Do NOT make final payment or sign an affidavit of final release until you’re completely satisfied. In addition to being satisfied with the actual work, you also need to know that the subcontractors and suppliers have been paid in full. Laws in your state might allow them to file a mechanics lien against your home to satisfy their unpaid bills, forcing you to either pay up or sell your home to pay them. The only way to protect yourself is to insist on receiving a lien waiver from each and every subcontractor and supplier BEFORE you make your last payment to your contractor.
Know your rights. Some states or local laws limit the amount by which the final bill can exceed the estimate, unless you approve the increase. Also, should you disagree with the merchandise or services charged to your credit card, you have the right to contact your credit card company and dispute the charge.
Sign-off checklist
Before you sign off and make the final payment, be sure that:
- All work meets the standards specified 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 up and cleared of excess materials, tools and equipment
- You have inspected and approved the completed work
Choose your contractor carefully because no other decision will have a greater impact on the success or failure of your project. Find someone whom you can trust and feel comfortable working with. If you have to pay a little extra to hire the right person, you won’t regret it. There will always be problems along the way, but a person who works cooperatively with you will help you find the best solution.
How to make your contractor run away:
- Stand around and watch everything they do
- Tell them how you have a brother-in-law that is a contractor too, and he knows everything about building
- Let him know how many attorneys you have in your family
- Keep track of his/her hours on a bulletin board so everyone can see it
Imagine a contractor dies on a fishing accident on his 40th birthday and finds himself greeted at the Pearly Gates by a brass band.
Saint Peter runs over, shakes his hand and says "Congratulations!"
"Congratulations for what?" asks the contractor.
"Congratulations for what?" says Saint Peter. "We are celebrating the fact that you lived to be 160 years old."
"But that’s not true," says the contractor. "I only lived to be forty."
"That’s impossible," says Saint Peter, "we added up your time sheets!"