Many mistakes are made by home owners when hiring a contractor for their home improvement or remodeling projects. Without a good proper screening and background check, you are taking a huge gamble with your project, money and your families nest egg. You hear nightmare stories all the time on how a contractor put the screws to a home owner... but in fact, it is the home owner that allowed this to happen because they did not do their due diligence. Doing a litle homework and background checking now can save you a lot of money and lost time later.
Get A Minimum Of 3 Bids
When looking for a home improvement pro you should always get at least three bids. There is no book written on how to bid home remodeling and some contractors will bid high when others are low. If you are not comfortable after three written bids, get some more. This is time that is well spent and you can learn more about your project from each contractor that you interview.
Always Hire A Licensed Contractor or Home Pro
We realize that in some states you don't need a contractors license, but in the ones that require it... there is a reason why. You will have little to no recourse in many cases if you hire an unlicensed contractor and he rips you off!
Don't Sign A Contract On The Spot
Many times you will be approached with a SPECIAL OFFER if you sign now! When a deal sounds "Too Good To Be True", then it usually is. Most legitimate contractors will not use "High Pressure Sales Techniques" to close a deal. It is impossible to sign a contract on the spot because you have not done any background check on this contractor. That may be the reason why they want you to sign so quickly.
Never Pay Cash For A Down Payment
If a contractor asks you for CASH as the down payment, you should run! Many states limit the amount that a down payment can be. You need a full paper trail for your project including a good written bid, then a detailed contract and record of all payment and what they are for.
Get A Detailed Contract In Writing
When signing a contract for your home services, you need to first make sure that everything you want is in writing. Many times a contractor will tell you "yes, that is included".. so if it is, it needs to be in writing. On the other hand many times a home owner will say "We talked about that" and the contractor will quickly tell you that the mere fact of talking about something does not constitute an agreement. Always get it in writing!
Always Background Check Your Contractor
You need to know the facts before letting someone into your home for the next several months. You should always do a full background check to learn more about the stranger that will be coming and going from your home. As most contractors are honest and do great work, there are always a few bad apples in a bunch. There are many ways to background check people now through the internet and service agencies.
Execute Lien Releases
Executing lien releases during and before the end of your project can protect your home from liens being placed against it. You should educate yourself about this more for the state you are in. This is a very important part of doing business. Many times you will use a "Conditional Lien Release" during the construction and then an "Unconditional Lien Release" before the final payment.
Don't be afraid to ask your contractors for references. You will want to call these references when the contractor is not around and ask them about all your concerns. The list of questions may be different depending on the work you are going to have done and the size of your project. Be sure to at least ask the common questions like (Was the contractor fair to work with and kept his price and finished on time?) and (Was the quality of his work good or better?) and (Would it be possible for me to meet you and see his work?)
Contents Of A Contract
It can be hard to give exact advise on this due to the size of the project. If you are getting a drain unclogged, then you would sign a one page estimate, get the work done and pay the guy all in one hour. But for larger remodeling projects you should get at least the following in a contract before signing (info about the contractor, his business address, phone and license number - pricing - scope of work - any exclusions - terms and conditions - estimated completion date - notice of cancelation - progress payment schedule - notice of lien rights - get everything in writing)
Get Legal Counseling If Needed
Don't be afraid to get help if needed. A contract that you will be signing will cost you a lot more if there are problems on the job that it would to have an attorney review it before you sign. Most contractors will have all the right stuff in your contract, but if you are one of those that does not fully check the background of the contractor... and does not get everything in writing... then you will most likely be one of those home owners that gets burnt by a "less than honest" contractor or unlicensed contractor!
Learn about preliminary lien notices and lien releases.
This document is for informational purposes only and is not intended to replace legal counseling.