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7 Ways to Ensure that You Hire a Good Contractor

With a new year and a better economy, homeowners are more likely to renovate their home. Last year, $314 billion were spent on home improvements. In 2015, that number is expected to increase. With more people wanting to renovate their homes, more contractors are going to be hired for the job. As a homeowner looks to hire a contractor, it can be hard to distinguish between a good and bad contractor. Here are 7 ways to ensure that you hire a good contractor for your home renovation:

  1. The contractor should have a license.

    In 2013, according to a study conducted by the Consumer Federation of America (CFA), problems with construction when having a home renovated was the 2nd highest most complained about topic by consumers. Problems arise when there are unexpected expenses, bad construction work, renovations not being completed, and improvements not being started. With the number of people having issues with the contractors they hire, it is important to hire a contractor who has a license. Not all states require a license and the licenses that are required vary. In some states, commercial contractors must have a license while other contractors do not. Then, there are states where only contractors who have projects over a specific cost need to have a license. California is one of the states with the most strict contractor licensing laws, as well as New Jersey and Florida. California requires that contractors have a license if the job costs more than $500. Despite having rigid contractor licensing laws, California still has individuals and businesses that call themselves contractors without proper training or licensing. Be alert.

  2. Know the contractor’s history.

    Make sure to only hire the individuals and businesses with licenses, but don’t stop there. Contact past clients to ask for their opinion of the contractor. Go see some of the past and current work of the contractor in order to have a better idea of the quality of their services. Contractors have a large turnover rate. According to HomeAdvisor, each year, one third of contractors shut down their businesses because they choose to join a different firm, are too financially unstable to maintain their own business, or need to change their name and area because of business issues. Look for contractors that have been around for a couple of years. It demonstrates a stable business.

  3. The contractor should provide a detailed contract.

    Without a detailed contract, the contractor has the freedom to add or remove specifics from the overall job. For example, if you hire a contractor to build a deck, you may have an idea of what type of materials, design, and size you want the deck to be. But if that information is not included in the contract, the contractor could make and design a deck that does not fit what you want. Without a detailed contract, the likelihood of misunderstandings increases dramatically. As does the potential for corners to be cut and the overall cost to be higher than anticipated. The contract should include specific dates for different aspects of the job to be completed, amount of money to be spent on the project, and a thorough description of the materials desired.

  4. Have a safe payment schedule and method.

    Unlicensed contractors are more likely to want to be paid in cash and before the job is completed. If the unlicensed contractor is paid in cash, he or she can complete jobs, no matter how well the job is done, without record of the work he or she is completing. Then, if the contractor is paid up front, he or she loses the incentive to complete the job and complete it well. You do not want a contract that has a set payment schedule where the amount of money being paid far exceeds the amount of work being completed. If the contractor requests money up front, do not pay for more than 30% of the entire amount of the project. Then, save the final payment until the job is completely finished and meets your standards.

  5. Be wary of the lowest bid.

    Every homeowner should have a variety of contractors to choose from. Don’t limit yourself by simply picking the first contractor you find. By having multiple contractors to choose from, you increase your chances of having a good contractor for your home. You will want two or three bids for the specific project you have in mind. If one of the bids comes to you significantly lower than the others, be cautious. Bids should be relatively similar. If one is close to 10% different than the others, the contractor is either a scam or does not really grasp the project. Each contractor is looking at the same project, and the cost to buy the materials for the project and make it should not differ by much. A legitimate reason for contractors to have a substantial difference in the cost is if one contractor has an on-site project manager while the other does not. An on-site project manager will increase the cost, but in most situations, it is well worth the cost. The renovation is typically of better quality when there is an on-site project manager because it ensures that someone has a vision for the entire project, is on site, and communicates to put the pieces together. They act as a liaison between the homeowner and the subcontractors.

  6. See the contractors insurance.

    You do not want to hire a contractor who does not have insurance. A licensed contractor should have liability and workman’s compensation insurance. Ask the contractor for a copy of the contractor’s insurance to be sent from the insurance agency. This is a standard procedure. If the contractor does not oblige, be alert. No matter how big or small the project is, a homeowner should have a copy of the contractor’s insurance. A contractor has a chance of becoming injured on all sizes of projects. For extra protection, the homeowner can request to be an “additional insured” on the contractor’s insurance policy. By doing so, the homeowner will receive a notification if the contractor changes their policy. Knowing the contractor’s insurance policy is extremely important. Without it, the homeowner risks losing a substantial amount of money covering any damage done to the contractor and potentially being sued by the contractor.

  7. A meticulous contractor is a good contractor.

    The majority of homeowners are not likely to know a vast amount of information about home improvements. A typical homeowner is not going to know the ins and outs of roofing, tiling, or installing new electrical outlets. Because of their lack of knowledge, it can be easy for a contractor to cut corners without a homeowner realizing it. For example, a contractor can buy cheaper materials, skip properly constructing unseen areas, or ignore structural problems. If you do not have the expertise to know whether the contractor is actually doing a good job, look at the areas you do know. How is the contractor treating your home? Are they keeping the area clean and safe? If a contractor is not taking care of the basics, then do you really want to trust them with a large project? License contractors are going to have building permits for remodeling projects. This requires that inspections be conducted on the project, insuring that the project is done well. However, with an unlicensed contractor, you are not going to have that benefit. Feel free to ask questions and supervise some of the work. You are the one funding the project and have the right to have more information on how the project is completed. A reputable contractor is going to find pleasure in expressing the quality of their work.

As you come up with your next home renovation idea, the last thing you want to do is decide on a plan, become excited about that plan, then have the end results of the plan be disappointing. A contractor is going to make or break your next home renovation. Make sure you hire the right one for the job!

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