Hiring a Contractor

One of the biggest decisions you may make in your life is how to hire a qualified contractor for a big renovation job. It’s actually a very exciting time because your expectations of a beautiful new living space are high. This is why you should take the journey step-by-step and make sure you have the right contractor for the job.
 
In many states a contractor has to be a licensed journeyman who has passed an exam, whereas in other areas he or she need only need to get a business license. This diversity among the states may make it difficult for a homeowner new to the state to figure out who is qualified and who isn’t. However, the main thing to remember about contractors is that they have to be able to read blueprints, price a project accurately, pull the proper permits for the job, hire the applicable staff and see the job to completion. In basic terms a contractor is a project planner with a good business sense.

Organize Your Project

In many ways your project resembles a small business and so you should put yourself into that frame of mind before you begin. So get organized with file folders, address books, card files and software so that you can access all of your information in an instant. This includes brochures from home shows and building supply outfits. Do this even if you are just adding a deck as it will give you piece of mind.

Know What You Want

One of the keys to getting the best price for your project is knowing exactly what you want and sticking to the plan. The scope of the project will determine how detailed the plans should be so follow these steps:

• Draw out what you want (You don’t have to be an artist just get it down on paper)
• Figure out how much you can spend
• Take the plans to a professional designer or architect

Plan for Success

If you are building a room addition then, depending where you live, the permits may require that an architect both design and provide blueprints for the project. Many large contractors have in-house architects but it is always better to go to an independent company for the design and then pass the blueprints out to contractors for an estimate. In this way all contractors will get an equal set of plans and the estimates will be more accurate. In many cases the architect or designer can give you a ballpark price to take to the bank or to use as a reference.

The Right Contractor

Compiling a list of contractors can begin on the internet, looking at newspaper or ads or finding a contractor in the phone book. In many cases a referral from a friend is a good place to start.

Most contractors can do a variety of construction and renovation work but look for the ones who specialize in your project. For example, some contractors advertise that their companies are the best at attic renovations while others cite room additions or outdoor decks as their forté. These contractors may be able to build a room addition but may not have the experience or personnel in place for such an undertaking. The work, although good, may take longer and may be much more expensive in the long run than if the project was given to a contractor that specializes in room addition.

The Interviews

When you call a contractor you can find out a lot about them in a few minutes. Remember to treat you conversation like it is a job interview as you are making a short-list for receiving estimates. Next, go out to their place of business and see how their office operates. If they do not have a separate office then go visit one of the work sites and see how the contractor manages the tradespeople.

Here are some questions to ask or look for:

• How long has the contractor been in business?
• Are their any complaints with the Better Business Bureau or other trade organization?
• Do they have the proper insurance to cover their labor for the job?
• Do they hire licensed subtrades where applicable?
• Does he or she return calls promptly?
• Is the site orderly?
• Are the workers professional in their mannerisms?
• Would you work with this contractor if the price was right?
• Was he or she on time for the interview?
• Will they apply for the proper permits?

References

Now that you have your list down to about a half dozen contractors it is now time to check their references. Many homeowners love to show off a great job and, conversely, love to spout off about how unprofessional some contractor has behaved.

Also ask the homeowner:

• Was the project finished on time and on budget?
• Was the job site kept clean and cleaned up after the job was finished?
• Did the contractor settle disputes quickly and in a professional manner?
• Did the contractor stick to the estimate and provide all materials and labor agreed to?
• Did the contractor have someone come back to promptly fix any problems?

In addition, ask for references from building supply companies and check that the bills were paid on time and that there are no outstanding debts left to be paid. (Some companies pay their old debts with new money and you could get caught in a lien against the property)

The Estimates

If the project is large get four (4) estimates if it is possible. Remember, just like in finding a point on a map, it always takes three (3) to pinpoint the market price and the fourth can corroborate the others.

Being able to compare the estimates is difficult but essential in the hiring process. Make sure the bids include:

• A detailed account and lists stating the scope of the job
• Completion date
• Payment schedule
• A process for making construction changes
• Labor and material break-down (You want to know if the materials and labor are being priced properly.  This will help in comparing the bids)

Don’t automatically go for the contractor with the lowest bid. He or she may not have understood the scope of the project and could be underestimating the costs. In the end you could pay more than the highest bidder for a lesser job.

• Choose a fair price:
• Weigh carefully what the contractors are offering for that price.
• Consider the other things like reputation, interest in your job as well as your own feeling as to if you could see this person working on your home.

Payment

Successful contractors have good lines of credit with building supply places so there is no need for a large deposit. If the contractor requires a large, up-front payment then walk away. This is not a person you want to have on your project as he or she will be chronically short of money to pay the bills. For larger projects the payment should be in draws otherwise the contractor is paid the full amount at the end of the job.

The Contract

Get a sample contract online and make sure all of the details are included like the contractors legal name, address, phone numbers and tax number.. Depending on the size of the job get a lawyer to go over the contract with you so that you understand exactly what you are signing. If the job is large then a hold-back of 10% is not unwarranted. In many instances these liens are held in trust by the contractor’s lawyer.

Completion of the Project

When the job has been finished it should be cleaned up. If the contract called for the work area to be re-sod with grass then should be have been done. You and the contractor should do a complete walk-through of the whole area. If trim or paint is missing mark it with green painter’s tape so that the returning subtrades will see it and make note of it. Before allowing the release of the remaining funds everything should be finished. Remember, once they have their money it is really hard to get them to come back.

Sorting Out Disputes

Just because you have clear and very detailed contract differences of opinion can arise for a lot of reasons. Remember, most reputable contractors want to keep you happy because their business depends on satisfied customers. So, if you have queries make sure the contractor knows that you are concerned.

• Communicate: Keep a good line of communication open with the contractor.
• Letter of Complaint: Write a letter to the contractor stating what you think is a problem.
• Third Party Mediation: If the contractor does not respond to the letter, or answers it by saying that there is nothing wrong, approach a third party like a professional contractor group or consumer protection agency. In many cases just the act of calling a building organization will get results as groups know that complaints are bad for business.
• Small Claims Court: For a small renovation ($1500 or less) a small court action can be applied for for less than a $20 filing fee. This will put the spotlight on the contractor as it will be officially in the record.
• Lawyer: approaching a lawyer should be the last resort because it might prove to be an expensive and lengthy process.

The best way to avoid disputes is to have all everything clearly spelled out in the contract.