How to Choose a Contractor

Choosing a Contractor

Are you thinking about remodeling a portion of your home? Before you do, you have to make sure you are hiring the right contractor for the job. To make sure you have the perfect person, follow these steps.

1. Get recommendations

First things first, get recommendations from trusted friends and family. Afterward, look at the National Association of the Remodeling Industry for a list of members in your area. In addition to these two sources, you can talk with a building inspector or your local lumberyard. They will know who meets code requirements and who buys quality materials.

2. Phone interviews

After you make a list of possible contractors, call each one for a preliminary interview. Ask questions such as:

• Do you take on projects my size?
• Can you give me a list of previous clients?
• How many other projects would you have going on at the same time?
• How long have you worked with your subcontractors?

These questions will give you a sense of the company’s reliability, availability, and how much attention your project will be getting.

3. Face to face meeting

After your phone interviews, narrow down your list to four or five companies and meet them face to face. During your face to face time with these companies, you should be able to get an estimate and ask them any additional questions you have. It’s crucial that you can communicate well with the contractor. After meeting with a contractor, check the company’s profile with the Better Business Bureau to see what other customers thought about working with them. You may also want to perform a background check. To do so, make sure you have the full company name and address. The background check will help ensure that the firm as a current state license and insurance coverage. It will also help determine any formal complaints or legal action taken against the company in the past.

4. Look at the facts

Call up former clients and ask how their project went and ask if they can send photos of the finished product. You may also want to consider visiting the job site of a current project to see how the contractor works. Look to see if the job site is clean and safe.

5. Get bids

To compare bids, ask each company to break down their price in terms of cost of materials, labor, profit margin, and other expenses. Materials generally cost about 40 percent of the total cost, 15 to 20 percent is covered by profit margin and the rest covers overhead. However, the price shouldn’t be the be all end all decision maker. In fact, if you get an extremely lowball bid, you shouldn’t consider it. Often, these bids mean that the contractor is cutting corners or just desperate for work. The most important factor in choosing your contractor is how well you two can communicate.

6. Set a payment schedule

A payment schedule is how you will pay your contractor for their work. Typically, for a large project, 10 percent is given at the contract signing, followed by three payments of 25 percent throughout the duration of the project, with the final 15 percent given once everything is complete.

7. Put it in writing

Now it’s time to sign the contract. Make sure that your contract is very detailed and includes every step of the project, including:

• Payment schedule
• Proof of liability insurance
• Worker’s compensation payments
• A start and projected end date
• Materials and products to be used
• Requirement for the contractor to obtain lien releases from subcontractors and suppliers

In your contract, you may also want to set some boundaries for the work site. Establish ground rules for smoking, bathroom use, and any other issues that may be of concern to you.