How to Choose a Contractor for Renovations or Repairs

When a new projects calls for the expertise of a contractor, how can you tell which professional to trust with your home?

Renovations are a big investment and choosing the wrong contractor can cost you time and money through project delays, subpar work, and even legal troubles. Finding a great contractor takes a bit of homework, but it’s well worth the effort if it means achieving the full vision for your project.

Like hiring an employee for a job, it’s all about assembling a list of the best candidates and checking their certifications and experience to narrow down who to call in for an interview. And like any good working relationship, a bit of gut instinct can help single out someone who’s a natural fit for you.

The following tips can help you through the process of finding a skilled and ethical contractor for your home improvement needs.

Get recommendations

A good contractor will have a reputation that precedes them, whether by word of mouth or the internet. Ask for recommendations from relatives, friends and neighbors, especially those who have recently had renovations. Be sure to get details on:

  • What made working with their contractor a positive experience
  • How their contractor handled problems on the project
  • Whether they would use the same contractor again

You can also try contacting your local chamber of commerce or building trade association for their recommendations on contractors in your area.

Follow up these recommendations by looking up each contractor online. Websites like Angie’s List and HomeAdvisor are great resources for verifying word of mouth recommendations and finding additional trusted professionals to consider. Be cautious of contractors missing an online presence or publically available information, like a website, social media, and reviews.

  • When looking at online reviews, be sure to take into account the number of reviews a contractor has how many reviews are from satisfied customers.

You might also consider asking your insurance company for recommendations, even if they’re not paying for the work. Most insurance companies have agreements with reputable local contractors and have already gone through the process of reviewing their qualifications. You might even get a price break based on the relationship between the contractor and your insurance company

Compare portfolios

Next you’ll want to compare the work of your recommended contractors. A contractor’s portfolio is a showcase of their best work and provides a visual demonstration of their areas of expertise.

A trustworthy contractor will have a portfolio readily available for you to review and should contain:

  • At least ten projects (too few can be a red flag)
  • Photos of each project (before the work began, during the remodel, and after completion)
  • Good quality images (watch out for grainy, hard-to-see pictures that make it difficult to see the details of the work)

It can help if there are blueprints, sketches or other plans to get an idea of how the contractor approaches their work. Also keep in mind that contractors only include their best work in their portfolios. If any completed projects in the portfolio do not look up to your standards, the contractor’s average work quality is likely even worse.

Check licensing, insurance, and certifications

Making sure your contractor has all their necessary licensing is possibly the most important step in your search.

Licensing protects homeowners by ensuring contractors meet the minimum insurance requirements of their city and state. Additionally, a license shows that a contractor has proven they know building codes and is usually a minimum requirement for pulling permits at your local building department.

Websites like HomeAdvisor can help you look up your state’s particular requirements so you know what licenses and insurance coverage to look for in a reputable contractor. In general, a contractor’s liability insurance should cover:

  • Any bodily injury or property damage accidentally caused by the contractor’s work to you, your family, or your property
  • Workman’s compensation for injuries caused to themselves or their employees. (Though not all states require this for small contractors, in which case ask to see a policy certificate)
  • Accidents involving the contractor’s own equipment, such as falling off a ladder. (Using your equipment can possibly lead to an insurance battle or lawsuit in the case of an accident and is best avoided)

Ask every contractor you are considering for their trade license number (not to be confused with their business or occupational licenses) and copies of their certificates of insurance, making sure they are all current. Also ask to see their insurance policy so you can review their coverage.

You can usually find this information online (through Angie’s List, Better Business Bureau, or the contractors website) or by calling a contractor directly.

Verify that the contractor’s policy has not expired by calling the agent listed on the certificate. You should also check with your insurance carrier to make sure the workers’ compensation coverage provided by each contractor you are considering is adequate.

However, insurance will not normally cover the cost of repairing or replacing bad work. This is where bonds come in.

In many states, contractors are also required to be “bonded” to obtain a license, which traditionally means they must purchase a surety bond. This serves as another form of insurance to protect customers if a contractor fails to complete the job properly or pay for permits, subcontractors, or other financial obligations.

This may take some research to find out the rules for your area because bonding requirements vary from state to state and even city to city.

  • For state level requirements, check with the agency or board with “professional licensing” in its name or the description of its responsibilities.
  • For county or city level requirements, you check with the department responsible for commerce or consumer affairs.

Once you know your local requirements, ask each contractor for their bond number and certification if needed, making sure it is up to date.

It’s also good practice to check which certifications your contractor has. The abbreviations behind your contractor’s name can represent certifications from trade organizations, like the National Association of Homebuilders, that bind them to a strict code of ethics. Certifications are also given out for particular specialties, which contractors can earn through rigorous coursework and testing. For example, a contractor can get certified as a green builder who is qualified to create energy-efficient homes or offices.

Depending on the scope of your renovations, your state may have special certification requirements for your contractor. Check with you city’s licensing division to see if your project calls for any additional certifications.

Interview candidates

Now that you’ve checked each contractor’s legal qualifications, it’s time to call your remaining candidates for a phone interview. Remember you are hiring someone you’ll be spending a lot of time with making important decisions for your home. Getting along and seamless communication can go a long way toward the success of your project.

The right person for the job will be easy to talk to and ready to answer any question to your satisfaction. A good contractor will have plenty of questions on your needs, as well. Make sure you both see eye to eye on your goals and that they have the right experience for your type of project.

Here are a few tips to help evaluate whether you and a potential hire are a good fit:

Business experience

  • How long have they been in business? Ask for proof of their tenure.
  • What kind of vetting process do they use when hiring subcontractors?
  • How long have they been a member of any trade organizations?
  • How is your work guaranteed?
  • What does a typical work day on a project look like?
  • How do they handle disagreements on a project?

Working together

  • What timeline would they have for your project?
  • Do they have any other current or upcoming projects that could affect this timeline?
  • Will the same team of people work on your project every day?
  • Who will be the go-to contact person during the project?
  • Who will be on-site managing the work on a daily basis?
  • As the homeowner, what should you do to get you house or workspace ready?

At this point you should have a short list of candidates you could imagine happily working with.

End the interview process by asking each contractor you are considering for at least 3 homeowners references they have completed projects for over the last year.

Check references

Other homeowners’ experience with a contractor can help give you a clear picture on what working together will be like. This is also an opportunity to check out a contractor’s finished projects in person to examine the quality of work and how they have held up over time.

 A typical contractor reference list includes ten or more jobs with the name, address and telephone number of each customer. Be sure to double check the dates the projects were completed and choose the 3 most recent that are similar to your needs.

Too few references or big time gaps between projects can be a red flag, though don’t always assume the worst. A gap in a contractor’s calendar could possibly be due to injury or time off. Just be sure to follow up on your concerns and note the contractor’s willingness to provide information.

When contacting homeowner references, your questions for them should cover things like:

  • Were they satisfied with the outcome of their project?
  • How quickly did this contractor return their phone calls?
  • Were they on time and on budget? If not, what happened?
  • Was the job site kept neat?
  • Were problems on the project addressed in a timely way?
  • Were there any disagreements and how were they resolved?
  • Is there anything they wish had been done differently?
  • Have they needed any servicing or repairs since the project was completed
  • Would they recommend this contractor to someone in their family?

If a former customer had a good experience overall, they’ll typically respond positively about the contractor even if there were a few small issues during their project. However, if their experience wasn’t satisfying, you may notice some hesitations in their answers. The homeowner may not feel comfortable giving negative feedback, so try to read between the lines if you sense some avoidance.

If possible, schedule a visit with your references to assess their completed projects and get a feel for each contractor’s work.

Take notes of all the information you learn from your talks and visits with each homeowner. If you are satisfied with the feedback you’ve heard, it’s time to ask the remaining contractors for bids on your project.

Get bids for the job

Every contractor you are considering should provide you with an itemized bid on your project cost. In a bid style proposal, the contractor assesses the amount of work and materials needed for your project and then offers a price for the work.

An itemized bid should breakdown the cost of everything you’ll be paying for including:

  • Labor (including estimated subcontractor costs, if your project calls for them)
  • Materials (including specifics such as paint, drywall, and light fixtures)
  • Permit fees
  • Any other expenses, such as travel fees the contractor expects to bill for
  • Profit margin

Make sure each contractor is using the same set of plans and specifications for your project to base their pricing.

When comparing the prices of each bid, keep in mind the cheapest option isn’t necessarily the best. An extremely low bid can also be a sign of inexperience, cutting corners, or potential scams.

Compare what each contractor is charging against the services being provided on your project. There are several online resources available to compare estimates for similar projects in your area to check whether a contractor is overcharging or undercharging you.

If it’s necessary to make changes to your bid, add your updates on the original document and make sure that both you and the contractor sign it.

Be wary of any contractor who tries to pressure you into accepting a bid, for example, by saying the offer is only good for a limited time. You always have the option to think things over and a high quality contractor will let you take your time deciding.

Consider the overall goals for your project and the cost versus the value offered by each contractor to then choose the bid that’s best for you.

Draw a contract

Now that you’ve chosen a contractor and accepted their bid, they will draft a contract proposal with details on how they will complete your project.

As when comparing bids, give yourself time to review all of the details of a contract before signing. A contract should cover costs, brands or grades of items being installed, a timeline for the project, and the complete set of drawings being used with written specifications.

And make sure the legal agreement includes:

  • The contractor’s name, address, phone, and license number
  • An estimated start and completion date
  • A timeline for primary construction tasks
  • A site plan
  • The contractor’s obligation to get all required permits
  • The payment schedule for the contractor, subcontractors, and suppliers
  • A detailed list of all materials including each product’s color, model, size, grade and brand. (If some materials will be chosen later, the contract should specify who’s responsible for choosing each item and how much money is budgeted for it, also known as the “allowance.”)
  • Information on warranties covering materials and workmanship, with names and addresses of who is honoring them — the contractor, distributor, or manufacturer.
  • How change orders are handled (which are written authorization to the contractor to make a change to the work described in the original contract)
  • A dispute resolution clause
  • A waiver of lien (which prevent subcontractors and suppliers from putting a lien on your house if their invoices go unpaid by the contractor)
  • Whether site clean-up and trash hauling are included in the price (you can ask for a “broom clause,” which makes the contractor responsible for all clean-up work)
  • 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
  • A written procedural list for close-out for when the project is completed

Be wary if you are not given a timeline for the project, this could mean the contractor has several current jobs and may not complete your job in a timely manner. However, expect a contractor to be too busy to start right away as a good contractor will always have plenty of work.

Also make sure the contractor has worked out a fair payment schedule. You should never have to pay a significant portion of the cost up front. An initial payment on contract signing is generally no more than 10 to 25 percent of the overall cost.

No matter how carefully you and the contractor plan out a project, there will be surprises down the road that can add to the cost of the job. Expect to eventually spend at least 10 percent to 15 percent more than the price defined in your contract.

You are now ready to start your project

This step-by-step process will hopefully help you avoid the major pitfalls of working with the wrong contractor. When it comes to choosing someone to entrust with improving your home, a bit of research goes a long way in making sure your project is in capable hands.

Best of luck on your future home improvement projects!

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