Essential Rules for Hiring Contractors

Posted by The Cascade Team Real Estate on Saturday, March 23rd, 2013 at 12:01pm

Make sure you investigate pros before you hire them. Check their references. Read the paperwork. Get agreements in writing. (Photo credit: Thinkstock)

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By Daniel DiClerico |

The Better Business Bureau has just released its latest Top Ten List of services with the most inquiries from consumers. Half relate to home improvement: roofers and general contractors, which take the first two spots, respectively, as well as plumbers, heating and cooling contractors, and remodelers. An inquiry is different from a complaint, so the news isn't necessarily bad. But it's a reminder to do your homework before tackling a home improvement project. Here's how:

Don't chase the low ball. The tight remodeling market has forced some contractors to lower their profit margins. But at a certain point, they'll have to make up the difference in other ways, for example by cutting corners during the installation. That's why you should get at least three estimates, to gauge the going rate for your project.

Check the references. Reputable contractors will be happy to provide names and contact information for satisfied customers. Then check the work to see how it's holding up. In past surveys, we've found that people who hired contractors they had worked with before were happier and had fewer time and cost overruns than those who hired someone new. Word-of-mouth references are the next best thing. And always check the Better Business Bureau for filed complaints before making your final decision.

Click HERE to see the Estimated Cost of Home Repairs Worksheet

Review the paperwork. That includes up-to-date license and insurance and workers compensation policies. (The Contractor's License Reference Site has information on licensing requirements in your state, as well as a list of licensed contractors.) The contractor, not you, should get permits and give you a lien waiver when the job is done. The latter will keep suppliers from knocking on your door for unpaid bills.

Insist on a written contract. This should specify what will be done to complete the job, associated costs, and the payment schedule. Don't sign a contract with a lot of open-ended amounts for products and materials (called "allowances" in contractor speak). Once the work is underway, try to stick to the original terms of the contract, since changes are one sure way to blow your budget.

Pay by check. Write out the check to the contracting company rather than to an individual. A reasonable down payment is 30 percent of the total project cost to be paid upon initial delivery of materials. Make final payments only when the work is completed to your satisfaction. A reputable contractor will not threaten you or pressure you to sign documents if the job is not finished properly.

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