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With the economy stabilized and home prices rising in much of the U.S. market, homeowners who spent the recession watching home remodeling on TV may now be ready to do some real-life work on their homes.
That can mean wading into a world both alien and expensive. The contractor you hire will make all the difference to the success and affordability of your project.
Rip-off artists and incompetents aren’t in the majority, but they are common enough that Spike TV has built a reality show, “Catch a Contractor,” around homeowners’ complaints of botched home construction and remodeling jobs.
So, how do you set up the best outcome for your job? Outside of TV, contractors come in all shapes, sizes and skill levels. Most are professionals who are trying their best to make a living doing work they can be proud of. A few, though, can’t be trusted to cross the street in a straight line. Follow these 13 steps to separate the pros from the bad eggs, avoid misunderstandings and expensive missteps from the outset and get the most for your money:
The absolute best way to find a reputable and competent contractor is to ask friends, colleagues and family for the names of contractors with whom they’ve had a great experience. Send your network an email: describe your project, perhaps including your price range, and outline what you hope for in a contractor. Or just phone friends or ask people for recommendations as you run into them.
Assemble a list of the most-promising names you’ve received. Chat a bit with those who made the recommendations to find out:
When you have narrowed your list to two or three contractors, ask to see their business licenses. Make photocopies and verify they are current by contacting the board or agency that licenses contractors in your state.
Resources:
When calling your state’s licensing agency, ask how to find complaints and government disciplinary actions against contractors.
“What You Should Know Before You Hire a Contractor,” a consumer publication by the Virginia Board for Contractors, has plenty of information for homeowners everywhere. In some states, you can check a contractor’s status online. Washington state, for example, lets you verify that a contractor’s workers’ compensation insurance is paid up and find out if the contractor is registered, bonded and insured or has state licensing infractions.
Look for lawsuits involving a contractor:
Contractors need two types of insurance:
Regardless what a paper policy says, call the agent or state agency to confirm that the premiums are paid up and the policy is in force. If industrial insurance is not paid up, depending on your state’s laws, you could be liable for the unpaid premiums in case of an accident.
Ask each contractor you are considering for a copy of evidence of his or her liability insurance, including the phone number of the agent who sold the policy.
Sit down for a half-hour or more with each contractor you consider. Talk over the job, the problems, their expectations, their credentials and experience. The Federal Trade Commission has a detailed list of questions to ask.
It’s terribly tempting to hire unlicensed or uninsured contractors. Doing things by the book costs money, and contractors who skip the formalities can charge less.
You might get away unscathed if you hire an unlicensed business. Many homeowners do. But here are a few of the risks:
Ask each contractor you’re considering for three references; take the time to check them, confirming that the contractor really did do the jobs he claims he did. Find out when the work was done, how long it took and if it was finished on time. You can learn plenty by also asking open-ended questions like, “What was it like to work with Linda and her crew?”
Building trades contractors often carry photos to show the quality of their workmanship. It’s fun to see them, but also ask the contractor’s references if you can see the work. An in-person look affords the chance to confirm quality in a way you cannot with photos.
Make sure that you and your contractor have the same understanding of the work to be done. Ideally, you or the contractor should write a detailed list of each task with steps to be completed and dates for milestones.HouseLogic explains how to draw up the contract and what to include.
Your contractor may ask for a portion of the payment upfront. That’s potentially reasonable. But agreeing on too large an upfront payment presents a risk for you. If you are asked to cover the cost of materials, see if you can pay the supplier directly. This keeps you in control of the money and lets you know if the contractor is sharing any discount with you or charging you a mark-up on materials.
Contact consumer protection authorities in your state to find out about any restrictions or rules contractors must abide by. Some states regulate what a contractor may charge upfront. In California, for instance, it’s no more than 10%, according to US News.
A payment schedule of 30 percent at the start, 30 percent in the middle and 30 percent upon completion is not unusual. However, it is safest for you to link payments to milestones of work completed.
HouseLogic offers these guidelines:
Money Talks News founder Stacy Johnson suggests waiting a couple weeks before closing your books on a job. “Make sure you like it and then make the last payment,” he advises.
When asking several contractors to make competitive bids, be wary of any that come in far lower than the rest. A little lower is fine, but the “too-good-to-be-true” rule applies here: There’s probably something wrong with a radically lower bid. It often means there will be expensive surprises later in the project.
It’s not unreasonable for a contractor to juggle more than one project at a time. But this can get out of hand, leaving homeowners waiting and waiting for their job to be completed.
To ensure prompt completion of your job, build a penalty for late completion into your contract. In fact, you might add an incentive payment for an early wrap-up.
This post originally appeared on Money Talks News.
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