How to Hire a Contractor - 8 Easy Steps

contractor.jpg

Choosing a contractor can sometimes feel like being lost in a fog. Your building project, large or small is an important part of your life, making your home just the way you like it. Knowing who to trust is the key and here are 8 ways to determine through some advanced planning on your part in how to choose the right contractor for your project.

1. Start with Friends, Family and Colleagues.

Check with those you know first. Find out about their experience and add those contractors to the list of those you want to interview. Check with the National Association of the Remodeling Industry for a list of members in your area. Talk with local building inspectors who know local contractors and may refer you to those that consistently meet code requirements. Check with your local lumberyard to learn which contractors buy quality materials and pay their bills on time. Check with your local Realtor for a vetted referral - they likely have several kinds of contractors for different size projects to meet their client needs.

2. Ask Questions. 

Find out about how reliable they are, how much attention they will pay to your project, how available they are to complete your project to determine how smoothly your project will go.

  • Do they take on projects of your size?
  • Can they provide a list of previous clients to check for references?
  • Who are their subcontractors and how long have they worked with them?
  • How many projects will they be working on while working on yours?

3. Get Estimates. 

During the estimate process make sure you are comfortable communicating with each contractor to judge how it will be to work with them. Don't just go with personality alone. Check with the Contractor's State License Board to make sure their license is in good standing and with the Better Business Bureau to make sure their is no history of disputes with clients or their own subcontractors.

4. Snoop Around.

Visit the contractors current job sites to look for neatness and safety and judge the courtesy of the workers. Call up the references and check with former clients to see how the project went and ask to see the finished product if appropriate.

5. Break it down. Compare bids.

Now that you have a short list, connect with the contractors who want to review your set of blue prints and discuss your budget and expectations for the project. Ask for bids with a break down of the cost of materials, labor, profit margins and other expenses. Materials should account for roughly 40% of the total cost. Profit margin is 15-20% and the remaining covers the contractors overhead and other costs. A contractor willing to spend time reviewing the most important details and answer all questions is a good indication that they will also deliver as promised.

payment.jpg

6. Set the Terms.

Most contractors begin work with a start payment of 10% at contract signing and progress payments of 25% each during the project paid at key points or inspections. The final payment of 15% should be made when everything on the final punch list has been completed.

7. Beware of Low Ball Bids.

The lowest bid may indicate a contractor who is cutting corners on materials or labor and may be desperate for work. Communication is the key to your comfort level in choosing a contractor whom you will be spending time with and who will be in your home for the duration of the project. The lowest bid isn't always the best. An old adage, "You get what you pay for".

construction contract.jpg

8. Get a Signed Contract.

Make sure you have all the details for every step of your project outlined in your contract.

Include:

  • Payment Schedule/Terms
  • Proof of liability insurance and worker's compensation payments for employees
  • Scope and outline of the project
  • Start date and completion date
  • Materials and products to be used
  • Ask for lien releases (which protect you if he doesn't pay his bills to suppliers or subcontractors)
  • Ask for change orders from your contractor for any problem that is discovered or change you may make to the original bid to keep everything in writing.

For 35+ years, Patty Rogers has been previewing and matching stylish homes to satisfied Bay area homebuyers and breaking sales records with her listings. She is known for finding and selling unique homes with a "Modicum of Charm" and is a shrewd negotiator who understands how to successfully orchestrate deals.