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How to Hire a Home Contractor: Tips and Best Practices


A home construction or renovation disaster can easily happen if you hire the wrong contractor. We’ve all heard the horror stories about contractors who don’t show up to the job site, spring unfair fees on you at the last minute or can’t seem to finish the project anywhere near the deadline. To keep yourself safe from these types of situations, it’s important to follow certain guidelines when hiring a contractor. Keep reading for tips and best practices for hiring a contractor.

Make use of your state’s consumer protection agency and the Better Business Bureau

Even if you meet face-to-face with a contractor you feel comfortable with and think will get the job done, it’s still advisable to double check their background. Look up their name through your state’s consumer protection agency and with the Better Business Bureau to make sure that they don’t have a record of disputes with other clients they’ve worked with. 

Ask for references 

Always ask for at least three references of clients that the contractor has worked with in the past. The contractor should give you a list of their past clients’ names, addresses and phone numbers. Ask the references if the work was completed on time, if the workers were punctual, if there were unexpected costs and if they were happy with the quality of the work. 

Ask for their insurance information

Depending on the type of home project you need completed, the contractor should have the appropriate insurance to do it. Otherwise, you could be on the hook for on-the-job injuries and other liabilities. Some examples of the type of insurance the contractor should have are workers’ compensation, personal liability and property damage coverage.  

Drop in on their current job sites

If you really want an accurate read of a contractor’s performance, drop in on one of their current job sites and have a look for yourself. If you find disorganization, sloppy workmanship or safety hazards, this is a clear sign not to work with this individual.  

Payment demands and lowball bids are red flags

Typically, the client pays the contractor about 10 percent of the total cost upfront and then makes individual payments of 25 percent of the cost throughout the completion of the project. However, if the contractor asks you for a lot of money upfront, this is a clear indication that they may be desperate for cash. 

Also, be wary of lowball bids on your construction project. If a contractor makes you an offer that seems too good to be true, it often is. It’s a red flag that this person doesn’t have a lot of work right now because they can’t get hired for one reason or another. 

Ask about credentials 

First and foremost, the contractor you hire must be licensed. Don’t work with anyone who isn’t. It is also advisable to work with a contractor who has additional credentials such as a certified graduate remodeler or membership in organizations such as the local Building Industry Association or the National Association of Home Builders. Holding these designations means that they adhere to strict guidelines put forth by these organizations. 

Put everything in writing 

Everything must be in writing. All the minute details that you and your contractor discuss about the way in which the work will be completed should be included in a contract. For instance, any agreements made in conversation about whether the contractor and their crew are responsible for cleanup are items that should appear in the contract. And, of course, you need the basics: your name and the contractor’s, addresses, phone numbers, subcontractor information, payment schedules, start and end dates, and more. 

For more tips and advice about home renovation and construction projects, feel free to give us a call today.

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The information provided in this email newsletter is for general guidance only, and does not constitute the provision of legal advice, tax and accounting advice, real estate investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional real estate, tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Home value estimate calculators provided herein are general estimations based on publicly available data and should not be used as a substitute for a professional appraisal. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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