23 / October / 2017
How to Hire a Contractor
You want to hire someone to improve a part of your home. Whether you're looking at a major project, such as adding an addition onto your house, or a smaller one, such as a bathroom renovation, knowing how to hire the right person has you lying awake at night. Well, have a cup of chamomile, read our tips for hiring a contractor, and relax. Though there are contracting nightmares out there, most of them can be avoided. Here's how.
Finding a good contractor
Where should you go to find the right person for your home renovation? You can begin looking at advertisements, online forums, or listings in the Yellow Pages, local hardware and home improvement stores in order to create a list of general contractors that might be able to do the job. Write down as many viable options as you can then start narrowing your list.
First cut. Make sure that the one doing the work fits the work you want done. A guy that is pretty handy at cabinet work or laying ceramic tile might be top of the line in their respective area of expertise, but not great at adding an addition onto your house. To ensure you're looking for the right people, know these terms.
- General Contractor: someone who manages all aspects of a project. If your project requires several different professional areas (plumbing and electricity, for example), requires permits, or takes more than one week to complete, then you should hire a general contractor.
- Specialty Contractor: someone who installs particular products like tiles or cabinetry.
- Architect: someone who designs houses, additions, and major structural renovations.
- Design-Build Contractor: someone who completes both the design and construction.
Second cut. Check online reviews. Giants like Yelp, Google, Angie’s List, as well as some forums local to your area, will provide these reviews. This should eliminate some names from your list completely and give you an idea of providers you're more likely to consider.
Third cut. Compare with friends, relatives and co-workers who have recently hired a contractor. They will be more apt to give an honest review and share real positive or negative experiences. Again, you will cross some names off you list to help you move forward.
Now it's time to do a more thorough check. Though you probably have pretty good advice already, it is a good practice to review references and background info of the names left on your list.
- Start with checking state and local licensing boards to make sure the contractor is legit.
- Review disciplinary boards like the Better Business Bureau (BBB).
- Look for litigation records in your local courthouse.
- Talk to subcontractors who have worked with the general contractor or vise versa.
After this step, you should have your list narrowed down significantly. You'll be ready to make some calls to set up interviews and begin the process of selecting the best contractor for you.
Getting Bids And Estimates
Though some might want to do an interview with several individuals before taking this step, it is really better to be well prepared and ready for estimates and bids before you speak to a general contractor. Honest individuals will appreciate someone who is well prepared, but a shady one (if you haven’t eliminated them already) will be scared off when held to a higher standard.
Know what you want before you start interviews and estimates. Have a very clear goal in mind and even crunch a few numbers to try to arrive at a decent budget. Firm up these ideas in your mind before doing interviews. Here is a quick list of items to consider:
- Demolition and trash removal
- Framing and finish carpentry
- Site work (if necessary)
- Electrical work
- Lighting fixtures
- Painting and finishes
- Type and quality of materials
- Permits and authorizations
- Insurance coverage
With these items already researched, you'll walk into your interview sessions with confidence.
Keep in mind that contractors are busy people. Be ready to present what you have in mind and ask questions that are specifically related to some of the items on the list you put together. Here are some things to keep in mind as you interview general contractors:
- Interview at least 3 individuals, but probably not more than 6.
- Expect the good general contractors to be busy and not able to get to your job right away. You will need to find a balance between waiting too long and getting the best person for the job.
- Make certain that the individual or company will be using his employees to do the job and inspecting the work themselves and not subcontracting out to someone else without supervision.
- Be wary of those who tell you that they can do your home improvement job without getting permits or authorizations.
- Be wary of those who are constantly pushing particular materials as a substitute for the ones you have researched.
Meeting with someone in person gives you a much better introduction than a phone call. Their eye contact, body language, and manner of speaking will help you gauge if they are trustworthy and genuinely interested in the project. After your interviews, you will have a pretty good idea of which individuals or companies are more apt to fit your project or not. There is one more thing to keep in mind before asking for bids.
Verify Insurance Coverage
Be certain that the individual or company is properly insured to cover any items which your homeowner’s insurance might not cover. Ask for a copy of insurance information and verify the coverage. Again, honest individuals will have no problem with this, but a shady one is apt to be hesitant, which could mean that coverage is lacking.
Give the general contractors who have impressed you and met with your expectations the opportunity to submit a bid or estimate. Expect up to wait up to two weeks to get a quality estimate. Be very conscientious when you review the bids. Look for itemizing and accuracy. Make certain that each bid you receive is using the materials you asked for in your bid or acceptable substitutes.
Note that a low, loose bid can cost you more with cost over-runs and changes in the long-run. It might also cost you in the quality of the finished project and workmanship. As a rule of thumb, the middle bid will probably be the best one, but don’t discount a highly accurate high bid, especially if the reputation and quality of work is superior. Remember, you get what you pay for.
When it comes to negotiating terms, a good deal of that will be included in your contractor’s bid and will be a factor in accepting the right bid. Keep in mind that paying less money to complete the project might not mean that it won’t cost you more stress in the process. Keep these criteria in mind as you consider terms:
Don’t pay more than 10% down before the job is started. Have a payment schedule that is based on a certain amount of completion or clear completion deadlines. Make certain that between 20% and 30% of the total contract is withheld until the job is completed. Be sure to require the completion of punch list in your terms of completion. These guidelines help keep the general contractor focused on your job and not moving on to the next one leaving you in limbo.
- Have an additional 10% to 15% more money left in your budget above the bid you decide to select. Things happen in the course of the work that neither you nor they were expecting or could have anticipated.
- Make some clear ground rules involving the facilities in your home, including cleanup, maintenance of your current property, and the use of the bathroom. Most general contractors will make provisions for these things, but they might have to be negotiated before signing your agreement.
- Make certain that proper permits and approvals necessary will be obtained.
- Set beginning and end dates for the project.
- Make certain that any materials or subcontractors are paid before completion to avoid having a lien placed on your house. This claim (often known as a mechanic's lien) can be made by contractors or subcontractors who have performed work on a property, and have not yet been paid. If the property is improved and the contractor hasn't been paid for that improvement, they can file a lien for the accomplished work if even if the job has been suspended.
- Have a paper trail of your payments. Create a means of payment through bank transfers, credit cards, or other means which provide a third party paper trail. Don’t use the cash and receipt method.
Once these details are negotiated and you have arrived at an agreement of terms, you can feel comfortable about establishing the contract.
Establishing the Contract
Regardless of whether you or your agent (attorney) writes up the agreement or the contractor’s agent writes it up, be absolutely certain that the agreement details everything included in your negotiation as well as the contractor’s bid. Do not leave things open ended. Changes and adjustments can be made through the use of change orders, which are essentially, addendum to the original agreement. Once you are satisfied that all items were handled in detail, you can sign the contract.
Communication During the Project
Communication is essential for making certain that your job is going the way you want it to and helps keep all parties on the same page. For larger jobs, you will want meet or talk daily and be sure to bring up potential problems the minute you see or are aware of them. If something was done wrong, it is easier to fix right away than it is later on. When you meet, be prepared and don’t waste too much time.
- Take notes of what you discuss.
- Write down questions.
- Write down items to check on.
- Write down complaints that need to be resolved on either side of the issue.
Remember who the professionals are. General contractors want your input, but they also want you out of their hair so they can work. Lingering, backseat driving, or getting in the way will cause problems. Keep those things in mind and try to be respectful of their time and space.
Create a Pleasant Working Environment
It is also a good idea to foster good relations by expressing your appreciation for the work that is being done. Here are a few things to consider that don't interrupt workflow.
- Provide an adequate place for the workers to sit in the shade or out of the wind, depending on weather conditions.
- Offer ice-water, lemonade or coffee once in a while.
- Spring for a snack once in a while.
- Be respectful. Don’t use abusive language (aggressive or passive-aggressive). Use the magic words: please and thank you.
General contractors and workers who are treated well, feel respected, and know your appreciation will be encouraged to do a good job. And everyone knows that motivated workers make the entire process run a lot more smoothly.
You should be available for making decisions all along the way. Most changes or issues that do not change the overall price of the job can be discussed and agreed upon within the terms of the original agreement, but there are two items to keep in mind when it comes to resolving issues.
Whenever additional changes require a difference in the overall price of the contract, those changes need to be laid out in a formal change order, which then becomes an amendment to the contract total. Just like the original agreement, these orders need to be itemized and signed by both parties.
When the project is beginning to wind down, your general contractor should ask you to do a walk-through of the project with them in order to do a punch list. This activity should have been included in part of your contract terms. Essentially, the two of you will do an thorough inspection of the project. Each of you will add input on what items still need to be finished, corrected, changed, or adjusted. Keep these three things in mind:
- Be specific.
- Put it in writing for a formal sign-off.
- Do not waiver on payment until all items are checked off of the list.
Dealing with general contractors does not have to keep you up at night. When you select the right individual or company, know what you want, and lay out solid contract terms for meeting the home renovation objectives, you can be a little more at ease about hiring the right person. Make use of our tips for hiring a contractor whenever you plan a renovation project and rest easy.
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