13 guidelines to hire the best contractors

Be sure to read the entire contract before you sign. This helps ensure you know exactly what you're paying for. (Photo by Katie Jacewicz)

Be sure to read the entire contract before you sign. This helps ensure you know exactly what you're paying for. (Photo by Katie Jacewicz)

Homeowners are back to tackling home improvement projects this year, but too many are skipping two important steps in the hiring process. In a recent Angie's List survey, one-third of the consumers who responded admit they don’t verify a contractor's license status. Plus, 16 percent confess they don’t fully read the home improvement contract before they sign it.

These two items are crucial to a job's success. Trade licenses are important indicators of quality, reliability and the ability to cover any unexpected injuries or other problems. Contracts literally spell out what the contractor and the homeowner are obligated to do — if a job goes poorly, you'll know what was agreed upon to help protect yourself from financial loss.

Follow these 13 hiring guidelines to help make sure your project is problem-free and high-quality.

  1. Clearly define your project: Before you begin talking with contractors, read remodeling magazines, search the Internet for information on designs and materials. Even rough ideas on paper give a potential contractor a better sense of what you hope to accomplish and what is required to make it happen.
  2. Management issues: Large projects, especially those that may involve more than three different specialists (i.e. plumber, electrician, carpenter, mason) will go better if you have a general contractor to manage all the various tasks and timelines.
  3. Structural issues: Projects that eliminate walls, add rooms or otherwise impact the structural integrity of your home, should involve an architect or a structural engineer.
  4. Ask around:  Ask neighbors, friends and Angie’s List about good, local contractors, but don’t hire based on only one conversation.
  5. Check references: Get names of previous customers and find out if they were pleased with the work and the timeline of the project, and if they’d hire the contractor again. Get the names of subcontractors and ask if they work with the contractor often and does he pay on time. If your prospective contractor balks at providing references, find another one. Check with trade associations to learn how your contractor stacks up among his or her peers.
  6. Get estimates: Get at least three written estimates. Documentation is often the best ammunition you have if things go wrong.
  7. Where can I reach you? Be cautious of contractors who give you a post office box with no street address, or use only an answering service. Never hire someone who comes unsolicited to your door and can’t provide you proof of qualifications – especially if he or she pressures you to hire fast and pay cash up front.
  8. License for hire: Some states or cities have no licensing requirements for contractors, which can make it difficult for homeowners to check up on contractors before they hire. Don’t rely on the contractor’s word to know whether his or her license is valid: verify it through appropriate agencies.
  9. Insurance and bonding: Check the status of the contractor’s bonding and liability insurance coverage, too. A good contractor will come prepared with proof that he or she is covered.
  10. Budget and payment options: The typical pre-payment is typically between 10 and 15 percent of the total value of the project. Even the most carefully planned project can change, especially if hidden problems are found. Never pay for a project with cash; always use a credit card so you have recourse in case something goes wrong. Before you sign off and make the final payment, check that the work is complete to your satisfaction.
  11. The contract sign: Don’t assume your contract covers all your needs. Know the details of the contract, as well as how any change orders will be handled. Check that your contract includes a lien waiver, covering payments to all subcontractors who worked on the project. Never sign a blank contract.
  12. Punch list: This is how the contractor will deal with the list of small items remaining to be completed at the end of the job. A good rule of thumb is to determine the cost of those items, double it, then withhold that amount from the final payment, until the list is complete.
  13. Prepare your family for the stress: This is one of the most overlooked, but critical considerations. How will the project change your routine, especially if it’s a kitchen or bath? Where will materials be stored? What are the working hours for the crew?

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For larger projects, especially those that may involve more than three different service providers, a general contractor to oversee your project may be required.

Comments

Where do you find the good contractors if your friends have never done it before?

Mark,That's what Angie's List is all about! Our members rate and review service providers in more than 550 home, health and auto categories so they can help their friends and neighbors make the best hiring decisions. Members rate service providers in categories such as price, quality, punctuatlity, professionalism, etc. They also have the opportunity to tell their stories in their own words, letting others know all the details of their experience. If you're looking to join Angie's List, sign up online and use the promo code "ANSWERS" for 20% off an annual membership.

pam in simple terms a "punch list" is a list of things that are not up to ur likeing and that until they are fixed you wont pay flip side is once they have completed the punch list u cant hold off payment it acts as a buffer for the homeowner and the contracter by both partys agreeing that it is all that is required

yes candace if the contracter is listing you as the gc it probly meens he is not licensed to do the task you ask and is trying to skirt the issue also some citys require that the landowner be listed on the storm water runnof prevention plans. also if you are listed as the general that makes you liable for everything on the permit if they list you as the gc on it

We had our garage converted into 2 bedrooms, and a hall. A carport was added at the same time to make up for the loss of the garage. The best advice I ever got was to select a few good contractors in the area, then ask the local hardware & lumber yards if they had accounts and were current on paying their charges. I did that and got a great job.

Very surprised to see that no response about #10 "prepayment typically between 10-15% of total job". I have never experienced that low a deposit or prepayment. Always, I've encountered a request of 30 - 50% of the job up front where materials were in that range and a quick job less than 2 weeks labor. Anyone else?

Very surprised to see that no response about #10 "prepayment typically between 10-15% of total job". I have never experienced that low a deposit or prepayment. Always, I've encountered a request of 30 - 50% of the job up front where materials were in that range and a quick job less than 2 weeks labor. Anyone else?

Has anyone received a contact that states the home owner is the General Contractor, and the "builder" (the company you thought you hired as the general contractor)is the subcontractor for the project? Are there any risks to signing a contract with this statement?

I don't get number 7. I understand the PO box thing (kind of), but my husband is a licensed handyman/remodeler, but we don't have full-time office help, so he relies on an answering machine. He gives customers his cell number after he has a signed contract, but he can't keep getting interrupted on a job to answer every call the comes in from sales people and those 900 people that want to build us a website to increase our Google search rating. So don't discount the little guy before you give them a chance.

Steve - architects can't provide structural advice because they aren't structural engineers. We haven't had an architect yet that wants to take on that kind of risk. What is missing from this list, and very important, are allowances. Allowances are floating costs. If a contractor gives a bid on a set of plans, most all of the bid numbers should be fixed. There are some exceptions, of course. But if your plans are specific and call out or certain items and your contractor gives you an estimate with loads of allowances, that should be a red flag. Also, you can check bonding and worker's comp certs on the CSLB website. Evidence of liability ins. can be faxed directly to you at your request.

1. Do not accept proof of insurance directly from a prospective contractor. Ask for the name of their agent and request a COI from the agent. 2. Know what you want, put it in writing, and provide that "bid request" to each of your competing contractors. That way they are all bidding the same job. 3. About negotiating: It's not only about reducing the bid amount. If you want a substantially lower price, be prepared to eliminate portions of the work.

This is a good list and #13 is one people frequently overlook. Any size construction project is a very emotional experience. Judith - How can you possibly state that "Architects are not necessarily competent to provide structural advice." Some architects may not be as competent as others as with any profession. However every architect is extensively educated and tested in structures and should be beyond competent to provide such advise. This is why they are licensed to do so. AIA contracts are extremely though yet they are far from concise as thus rare in residential construction. It would be wonderful if every project used one, however it usually leads to the extensive use of lawyers which is in expenses most homeowners like to avoid.

Contractors are still accepting credit cards, however, they are beginning to shift the costs back to the customer. Our Heating/Air Conditioning company that we have used for years no longer accepts "reward" credit cards. Our roofer, highly rated on Angie's List, was going to charge us 2 percent of the job to use a charge card. We had no choice but to pay by check because we didn't want to add 2 percent to the cost of the job.

I had three contractors bid on pouring a concrete driveway & sidewalk. After talking to all three, I called the one I was most comfortable with and asked for a few references. Without a moment's hesitation, he gave me at least 10 names & numbers, just from projects he had with him there in the truck, and said if I wanted more he'd be glad to call me back from the office later that afternoon. We talked to several of those references, hired him to do the job, and have absolutely no regrets.

barry, what is EMR#

A punch list is just a list of items to deal with at the end of a project. For example, if you have a bathroom remodeled you might have the following list of issues the contractor should take care of: 1. Fix drip in tub. 2. Fix blemish above medicine cabinet. 3. Remove excess grout in tile above shower head. On a big project the list can be very long, even with a good contractor. On a big project you may want to build the punch list process into your schedule and the contractor may want you to walk through the items with him.

Re: Mr Katz inquiry, it depends. In the State of Washington you can find this info on the Department Of Labor & Industries site. They have a link called "Choose a Contractor" and shows a good deal of info about contractors. I think it varies State to State.

Residential contractors don't qualify for Surety or completion and payment bonds. A contractor may have a fidelity bond but it is unlikely to protect a third party unless there are extraordinary terms. Bonding does not apply to private residential contracts. Have a lawyer supply a contract form or get an American Institute of Architect contract form and withhold 10 or 15% until the job is complete. Get a 1 yr warrantee from the contractor and the warrantee on materials and appliances. Check referrals carefully.

It is very important taht the contractor is bonded.

Pam, A punch list is an itemized list of deficiencies. In other words, you would walk the site and write up a list of items that are not complete per your agreed expectations or the contract (ie: hardware not installed, wall has dings in it, caulk this or that.) The list usually occurs when the contractor is ready to turn over the site to the owner. If it is not at that point a punch list is premature.

I don't understand what a "punch list" is even with the comment. Can someone try to clarify it with perhaps an example?

In regards to pt. 9, is this information available on the web site prior to checking with the contractor?

You can also ask for the EMR # from the contractor's insurance company. This is a relative safety number and should reflect any insurance claims. A number below 1.00 is good and the lower the better.

Hire someone to do Phase Inspections for your project. If the work is being inspected by a Qualified Home Inspector, then most issues will be resolved. Also make sure all permits are pulled. Just because you have a well written contract, it doesn't guarantee that corners wont be cut or that the quality of construction will be what is desired. Hire a second set of eyes to look out for you.

It's also very important that if the work is going to disturb any painted surfaces in a pre-1978 residence, that the consumer ask the contractor to see their EPA lead-safe renovator certification, AND to ask how they will contain the dust in order to keep their family safe from lead exposures.

All 13 points are a good beginning for any project. I plan to refer to them on all my household projects. I would even go so far as to have these guidelines in plain view when talking to the contractor.

I agree w/ Judith's response to #9 and would add that you should check with the insurer and ask if any claims have been made during the current insurance cycle. Aggregate liability claims are deducted from the "aggregate limit". As for #3 an architect does have a license to protect. They are usually good at providing structural advice or can recommend a go P.E.

#3-Architects are not necessarily competent to provide structural advice. #9-Bonding and insurance certificates are should not be received directly from contractor--they are to be mailed or faxed from insurer directly to client.

These points were very enlightening. Thank you so very much.

These days a contractor do mine references (that is compensate in some way), raise prices, stop work and make you suffer etc. The legal recourse can take forever and often with money being tight in state enforcement agencies they are reluctant to take the cases. In the mean time if you get the job done by others so you can live in your place the state will only ask you to take the contractor to court which is another expensive proposition. Even people with all the 'credentials' can provide implied threats. Lack of timely response means that you end up yielding. This is the sad reality. One can write to Angies List who will negotiate on your behalf but the most they can do is to place the contractor in a penalty box. So the best suggestion is to get a few things done at a time, break a large contract into smaller ones and pay as you go.. Be prepared to find alternatives if things go wrong

You should always check the National Offender Registry before hiring someone to come into your home.

On smaller jobs I require half down and the rest after job is fully completed. Bigger jobs over $10,000 can be split into 4 payments. Payments can be split by time or at performance intervals. I usually make my own punch list near the end of the job then I ask the customer to look around and add any items I might have missed or certain tasks they would like to see finished. Then they add those items to my punch list. The punch list stays on the job for the customer to see the progress as each item gets crossed off after completion. Getting bonded is for jobs over a million bucks generally. A bond is insurance that covers the customer in case the contractor does not do the job or finishes the job. The bond will reimburse the customer with money allotted from the bond. I don't have office staff so I need an answering machine to collect calls for me. I also have a website and email where the customer can get a hold of me. I use my smartphone to text or email customers when need be. Talking on the phone during construction is not the best way to communicate because of safety and noise. Texting and email is more efficient.

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