7 Tips for Hiring Contractors
Published May 2, 2013 | Updated May 30, 2013
The cost of some home improvement projects can be more than the price of a car. But according to contractor licensing boards, most consumers spend far less time choosing a contractor for home improvements than they do choosing a car. The following steps can help you choose a contractor and avoid costly mistakes and misunderstandings:
- Get referrals from family and friends. A contractor's previous work gives you a good idea of both the quality of the work and the working relationship. You know how much error or delay your friends and family will tolerate, so their recommendations will be useful.
- Decide what you want done. Be as specific as possible to avoid any misunderstandings. Think through all the details of your project(s) and if applicable, talk with an architect or an engineer to make sure you understand any infrastructure issues behind your vision.
- Get competitive bids. Compare bids from at least three different contractors. Make sure they're bidding on the same services and quality of products, and keep in mind that the lowest bid is not necessarily the best bid.
- Check referrals and licenses. Ask for references aside from your friends and family. Ask them specific questions about the work they had done and their satisfaction level. Also make sure the contractor is licensed with a current license in good standing. While Texas does not require a state license, individual boards license HVAC and plumbing.
- Get everything in writing. Read the contract carefully before signing. It should not only include costs, payment terms and schedules, but also list all materials, brand names, models, warranties and lumber grades for the materials. Do not sign anything until you completely understand the terms.
- Don't let payments get ahead of work. Most contractor boards recommend putting down no more than 10% or $1,000, whichever is less. Don't pay cash. Checks or credit cards give you a paper trail. Keep records of your payments and make sure that you're satisfied with the quality of work before you release the next round of funds.
- Secure your financing. How you will finance your improvements is another important consideration. You want to have your financing lined up before you start talking to potential contractors so you'll know how much you have to spend. Be sure to hold some back for those unexpected costs that are the norm in these types of projects. Amplify has affordable options, including Home Equity Loans and Lines of Credit that offer competitive rates. The interest on your home equity loan may be tax deductible. Contact your tax advisor to find out if you qualify for the deduction.