1) Do your Research and Get Recommendations
Start by asking your friends and family for recommendations and do your own research online.
2) Interview Prospects Over the Phone
Once you’ve assembled a short list (5-7) of contractors with positive reviews and recommendations, make a quick call to each and ask them questions like:
- Do they take on projects like yours? How many?
- Are they willing and able to provide financial references?
- Can they give you a list of previous clients that you can contact?
- How many projects do they usually have going at the same time?
- How long have they been working with their employees? (High employee turnover is a very bad sign)
3) Meet Each Candidate in Person
Based on each phone interview, limit your list of home remodeling contractors to three or four and meet them face-to-face for additional conversation. It is absolutely crucial that you communicate well with each other, as this person will be in your home and around your family for a long time.
4) Ask Questions
Now that you’ve narrowed your list, put your research to use.
- Check in with your state’s consumer protection agency and your local Better Business Bureau.
- Make sure contractors don’t have a history of disputes with past clients or subcontractors.
- Call up people on the former clients list to find how their project went and if they are satisfied.
- Visit a current job site and see how the contractor works.
- Is the job site neat and safe?
- Are workers courteous/careful with the property?
5) Make Your Plans and Receive Bids
Ask everyone to break down their bid into a list of costs for materials, labor, profit margins and other expenses. As a general rule, materials should account for around 40% of the total cost; the rest covers overhead and the typical profit margin, which is 15 to 20%.
6) Throw Out the Lowball Bid
While we understand the desire to save money, lowball bids usually mean that the contractor is cutting corners or, worse, desperate for work and willing to say anything to get you on the line.
Tip: Because the most important factor in choosing a contractor is how well you communicate, it’s better to spend more and get someone you’re comfortable with.
7) Write it Out, All of It
Write out a detailed contract that covers every step of the project. This should include:
- Payment schedule
- Proof of liability insurance
- Worker’s compensation payments
- A start date
- The projected completion date;
- Any specific materials and products to be used
- A requirement that the contractor obtain lien releases from all subcontractors and suppliers.
- A lien release will protect you if he doesn’t pay his bills.