Questions to Ask Before Hiring a Contractor
Be sure to interview several contractors before hiring one for your renovation. Got the itch for some home improvement projects? Then hiring a contractor may be in your future. Before you get out the phone book and call the first ad that you see, be prepared with questions to ask.

The first step is to compile a list of contractors to call. The best bet is to get recommendations from people you know. Ask around at your office, in your neighborhood, and with your friends. Then, using the following questions, you can begin to call and interview the contractors on your list.
 

Questions

• How long has the contractor been in business? Obviously, the longer he (or she) has been around, the more likely it is a reputable business, and not someone who is going to take your money and split town.

• Does the contractor have a current license and registration in the state? Again, this helps you avoid trouble down the line.

• Has the contractor completed similar projects to yours? If so, how many and when did he complete them? You may not want to hire a contractor whose first attempt at renovating a kitchen is in your home.

• Does your project need a permit? If the contractor says that you are responsible for obtaining any necessary permits, watch out. If you obtain the permit, then the contractor may be able to avoid being held liable for his work. Also, it may be a sign that he is not licensed.

• Does the contractor have insurance? What types? Any contractor you consider using should carry worker’s compensation and general liability insurance. Be sure to see the proof of insurance.

• Will subcontractors be used? Does the contractor’s insurance also cover the subcontractors? You don’t want to lose your home because a subcontractor falls off a ladder and decides to sue you.

• Can you see a list of references? Any reputable contractor will be glad to pass these along to you. Make sure you actually call the references and check out the work. Maybe you can get more ideas for your own project by checking out the contractor’s work on other homes.

• What payment options are available? Can you make payments or will you need to pay in one lump sum upon completion? Think carefully before you finance through your contractor. You’ll often pay more than if you arranged your own financing through a home equity or personal loan.

A home renovation is a major project. Don’t cut corners with the most important ingredient – the contractor. Interview several, evaluate their answers, and go with your instincts in hiring the contractor for your renovations.

How to Work with a Contractor
Follow our tips to ensure that your home improvement project comes in on time and on budget. Follow our tips to ensure that your home improvement project comes in on time and on budget. Starting a home renovation project is exciting. But working with building contractors can mean big headaches: a two-week delay between removing your old bathtub and installing a new one; a kitchen island that ends up costing more than expected; or, worst of all, the contractor who disappears with your down payment and your dream.

Fortunately, there are ways to protect yourself from delays, cost overruns and outright fraud. Follow these tips for hiring and working with a contractor.

Where to look

• You can get matched with a prescreened contractor in your area through companies such as ServiceMagic. You submit a request online that includes details of the project or work you need done. ServiceMagic gets back to you with three or four service professionals, as well as ratings and reviews from customers, and you pick the contractor you want to work with.

• You can also ask friends or family members. Ask around, especially if you know someone who recently had a similar project done and is happy with the result.

• If you can’t get a referral, look for a contractor who is a member of a local builders’ association or similar industry group. Using the phone book as a source isn’t a good idea because some states only license electricians and plumbers, so anyone with a van and a toolbox could call himself or herself a builder.

• Get references and take the time to follow up on them. Ask the contractor’s previous clients whether their jobs were completed on time, if there were any surprises, and if they would use the contractor again.

• When you ask for quotes, be explicit about what you want done. The more specific you are, the more likely you are to get reliable quotes.

How to choose

• Get quotes from at least three contractors. It’s standard, and the competition will prevent contractors from giving you an estimate based on what they think you’re able to pay.

• Don’t automatically pick the lowest quote. Sometimes a low-ball offer indicates inexperience, and that can lead to cost overruns later on.

• Carefully compare the quotes, especially the description of materials. Be on the lookout for terms like "or equivalent." You should have the right to approve any substitutions if a material specified in the quote is not available.

• Be prepared to wait a few weeks or even months for the right person. It’s tempting to take the guy who can start right away, but good contractors are often busy.

• Pick someone with whom you have a good rapport. Remember, this contractor and his or her crew will be coming into your home -- maybe for weeks -- so you’re going to have to get along.

Get it all in writing

• Always draw up a contract before the work begins, and include a start date and estimated completion date. Often you can include a clause that gives you a discount if the work isn’t done on time.

• Make sure your contract specifies that any additional charges or expenditures must be authorized by you in advance. Cost overruns happen, but you should not be surprised when you’re presented with the bill.

• Ask if the contractor is fully insured, and ask to see the papers. Otherwise, you could be on the hook if one of the workers is injured on the job or if the crew damages your property.

• Specify that the contractor is responsible for getting the necessary permits for the work.

• Obtain a written guarantee of the workmanship and materials.

• Agree on who’s responsible for clean-up and garbage removal.

Paying the piper

• Your down payment is only an assurance to the contractor that you won’t hand the job to someone else before the start date, so it needn’t be larger than 10 percent of the total cost of the job, up to a maximum of $1,000. Some states limit the amount the contractor can ask for up front, so know your rights.

• Stagger the remaining payments and tie them to specific stages of the project, so you can hold back if the work is progressing slowly. Outline this payment schedule in the contract.

• Don’t pay cash. While sometimes paying cash can get you a discount, you should never do business with someone who insists on only cash payments. It’s recommended to pay by check and get a receipt.

As your project moves along, ask for regular progress reports and keep a good line of communication open with the contractor. If you don’t know one end of a hammer from the other, you might consider hiring a home inspector to keep an eye on things.