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Tips for Hiring a Home Contractor

Bathroom Remodeling
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Hiring a quality home contractor requires a plan.

  1. Get recommendations:
    • Ask your family and friends.
    • Ask a building inspector for home contractors who meet code requirements.
    • Query local lumberyards for contractors who purchase quality materials and pay their bills on time.
    • Query the National Association of the Remodeling Industry for local members.
  2. Compile a list of contractors to call and ask the following questions:
    • Do they work on projects of your scale?
    • Will they provide a reference list of past clients?
    • Have the contractors been in operation for 3 or more years under their business names?
    • How many other ongoing projects are they working on?
    • How long have they worked with their subcontractors?
    • Will they provide financial references from banks or suppliers?
  3. Meet with likely home contractors for further evaluation. Check with the Better Business Bureau and your state's consumer protection agency for disputes with clients and/or subcontractors.
  4. Check with your state’s Contractors License Board to verify that the contractor(s) is licensed. Ask for a certificate of insurance to verify he holds liability and workers compensation insurance. If he is uninsured, you are responsible for property damage and medical care for workers injured on the job. Call past clients to ask how their project went and if you can view the results. Visit a contractor's current worksite and see how he works.
  5. Plan your project when you have pared down your list of home contractors. Evaluate bids by asking the contractors to detail the cost of materials, labor, and other expenses. Materials make up 40% of the total cost. The rest accounts for overhead and a profit margin of 15%-20%.
  6. A low bid may indicate the home contractor is cutting corners. The most vital element in selecting a contractor is how well you communicate with him. It's worthwhile to pay relatively more and get someone you're comfortable with.
  7. Beware a home contractor who wants a deposit for half the cost. State law mandates that your down payment not exceed $1,000 or 10% of the total bill, whichever is less. A schedule usually opens with 10% upon contract signing, three payments of 25% over the duration of the project and the last 15% when the project is done. Verify that a city inspector has made final inspections and seek labor and material releases before tendering final payment. If the material supplier has not been paid, write a check to the supplier and deduct it from the contractor's bill.
  8. Beware a home contractor who requests you get the building permit, putting liability in your hands. Set up a contract with detailed items: a start date and estimated end date; payment schedule; proof of liability insurance; materials to be used; and lien releases from suppliers and subcontractors to protect you if the contractor doesn't pay his bills.

When hiring a home contractor, you must research to protect your home and your finances.

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