4 tips for hiring contractors (and 10 ways to avoid scammers)
To protect yourself — and your money — here are 4 tips to ensure that your next remodeling project goes smoothly.
We love building for ourselves, but some jobs just need to be subbed out. Unfortunately, a competent, honest remodeling contractor is no easy find. There are thousands of reliable, trustworthy contractors out there — but there are quite a few toolbox-wielding knuckleheads, too. Here’s what you should keep your eye on:
1. Avoid sleazy or shady tactics.
The first thing to do is make sure you're not being scammed. Beware these 10 red flags:
The contractor ...
- Provides credentials or references that can't be verified.
- Offers a special price, but only if you sign a contract today.
- Accepts only cash, requires large deposits or wants the entire cost up front.
- Asks you to write a check in his name (not to the business).
- Won't provide a written contract or complete bid.
- Refuses to apply for building permits, and asks you to get them.
- Offers exceptionally long warranties.
- Proposes to do most or all of the work on weekends and after-hours.
- Gives you a low-ball offer that sounds too good to be true.
- Has "Will work for beer" painted on the side of his trucks.
2. Check the construction work.
When you meet with contractors, ask each to bring photos or drawings of completed jobs that are similar to yours. When possible, ask to visit a completed project. Get in touch with the homeowners involved, says construction manager Amy Johnston, author of “What the Experts May Not Tell You about Building or Renovating Your Home.” Ask pointed, pertinent questions such as:
- What was the original construction budget?
- What was the final construction budget?
- How would you describe the quality of the work?
- Was the job site kept clean and organized?
- Was the project completed on time?
- Were any liens filed on your property?
- Would you work with this contractor again?
Vetting a contractor through customers works both ways — word-of-mouth recommendations have long been one of the most reliable means of finding competent contractors. Seek references from neighbors, friends, architects, colleagues and real-estate agents. You can also find local contractors, along with ratings and reviews, from online sources, such as Angie's List.
3. Check the paperwork.
Check to make sure contractors are licensed and insured. A good pro should volunteer documentation. If you have doubts, contact the Better Business Bureau and check for complaints. When comparing competitors' bids, make sure everything is spelled out. This includes the scope of the work, materials specified, warranties, references, time frames, cost overruns, payment schedule and price.
Once you have chosen a contractor, obtain a written contract that includes the items specified in the original bid, plus the final price, payment terms, sales tax, permit fees, the specific work to be performed, materials to be used, warranties, start and end date, change-order processes, final review and sign-off procedures and debris removal. Once the job is under way, make sure the necessary building permits are on display.
4. Check the bills.
When advancing money for materials, ask the contractor if you can pay the supplier directly. Always pay with a check, never by cash. Take a carrot-and-stick approach to completed work — pay incrementally as each significant phase of work is completed. Be careful about paying for work that hasn't been finished. Before making the final payment, do a visual inspection of the entire project and make a punch list of any repairs or uncompleted work. Put all change orders in writing; avoid verbal contracts.
A small but important technicality: Request signed lien releases from all major subcontractors and suppliers before making final payments. A lien release guarantees that the contractor has fully paid his materials suppliers. Former contractor Tom Philbin, author of "How to Hire a Home-Improvement Contractor Without Getting Chiseled," tells the story of a Memphis, Tenn., homeowner who had some work done on his house. "The job went smoothly and he paid the general contractor all the money for the job. But the contractor hadn't paid his supplier, who slapped a lien on the homeowner. The homeowner ultimately had to pay an additional $20,000, even though he had paid the contractor in full." Get those lien releases.
By Joseph Truini, Popular Mechanics
excuse the frustration , but as another point against this article that paints us descent Generals with the same brush! who have done there schooling pay their bills and do their part to stimulate the economy !
I am yet to see an article on the following topic - if you want to be a consumer watchdog the writer / editor might want to do another article. To point out to homeowners that if the CSLB comes to a home where unlicensed guys are used ( even if you have permits ) the fines are in the range of thousands of dollars , i believe $15,000 for the unlicensed G.C which at that point would be the homeowner and $5,000 per sub ! that would put a dent in the budget !!
Surprised to see so many G.C,s have the same belief as me , never mind the better business bureau there should be a better customer bureau !! an older contractor once told me he walked out of a interview with a potential customer as the customer said " what would we do in a case of litigation ". As i read below many customers are just looking for a way NOT TO PAY . We have been very lucky to spot these people coming and in 28 years have only been taken maybe twice.
As far as you get what you pay for some of these quotes below are so right on !! Apart from established and conscientious we pay our many insurances licenses etc and still beat out these clowns with no permits etc. People think they are saving a couple bucks going with someone nonlicensed etc , i have heard from my local inspector of stories of fires in homes after no permits pulled for electrical work and guess what " insurance co doesn't pay " .........they will find any reason you might want to look into this before you buy a flipper !! , we also recently had to redo work that an unlicensed contractor had done a terrible job and without any permits .. discovered during escrow and house fell out at that moment
basically you would think the type of cliental that can afford a licensed contractor would have the sense to weigh up the pitfalls
Allready Gone! I respect your right to comment here but I disagree! People are hungy for work now days! If you don't get a fully insured and bonded contactor you could lose everything that you own or every hope to own in your name if just one of those employees or workers falls off a roof or electricutes themselves on your property without insurance or making sure that your contractor is fully insured. People are so sue happy today that they want to sue you once and live off you for the rest of their lives or until another uninsured sucker comes along. I was burnt once by one of those private investors even though I had a sells contract in writing. Now I don't trust anyone! I never make verbal agreement with anyone,not even my own family members. Everything that involves money or accidental risk has to be reduced to writing. I maded the mistake of trusting people thinking that their word is their bond like mine but after being burnt in business as well as in personal life I have to have a contract in writing now. I would even marry a person without a prenuptial. No prenuptial no marriage, no insurance payout in the event of death for at least one year if its under suspicious circumstances. Its sad that you really can't trust people today not even your own family members where money is concerned! I grew up in a era where a man's word was his bond come hell or high water! No excuses were made and deal was done on a hand shake. No more! if you get sued or burnt now days because you didn't cover yourself with a contract and head the excellent advice in this article then you deserve to get burnt. Trust everyone but verify first! Remember there are con men women out there just looking for a sucker! That's their occupation 24/7.
Here is one quick tip about hiring the right contractor: Don't listen to the lying idiots at 'popular mechanics'. Unbelievable stupidity! What idiot wrote the stupidity above?
These idiots wrote: '8. offers exceptionally long warranties'
'All Precision Construction work is guaranteed for the lifetime of the material'. That is the warranty we offer and have backed for 31 years. ANY contractor that offers LESS than a lifetime of the material warranty is stating to you that he doesn't think his work will last! Go ahead and hire the shyster that offers a year, 3-year, whatever warranty. The real guarantee you just got is he knows his work will not hold up for long! If something goes bad during the manufacturer warren teed lifetime of the material, you had a bad builder. And Popular Mechanics just wrote an article supporting bad builders and they are too stupid to know it.
I had a roofing contractor, in business locally for 30 years, use a Mexican superintendent for illegals who couldn't speak English and couldn't do a decent roofing job either. The old shingles were shoveled off on top of my a/c and landscaping around the house.
I had to hold payment until the work was finished and trimmed properly.
Within a few months the shingles began to buckle and the manufacturer replaced the entire defective lot.
I hired a different contractor.
Great advice from MSN...THANKS MSN for the article!! You always come up with GREAT articles of advice to help people out from being scammed. That's one of the reasons I have
MSN.com as my home page NOT Google.
As a GC of 20 years, I have seen this business change greatly, especially these last few years. I find this entire string of contractor articles to at best one-sided and somewhat misinformed. We in the construction industry are not providing a public service, we are feeding our families and paying mortgages thru the fruits of our labor.
Since the recession has hit, I am finding a greater number of homeowners trying to take full advantage of the times, wanting the work done at little to no profit margin. Again, we don't do this just to keep from being bored, we do it to earn a living. It is amazing how many people sit behind a desk, thinking they deserve every bit of their salary and more, but when it comes to construction, think that the service providers are a bunch of morons that should be happy to work on their homes for nothing.
I can't just work for the hourly wage paid myself and my guys. I have other over-head that needs to be met in order to be in a position to provide the service (vehicle and tool maintenance, workman's comp., gen. liability insurance, licenses, etc.). If I can't make a modest profit, I don't do the job. In short, it cuts both ways, if you don't want to pay a fair price, you won't get good work or warranties.
Realtors and management companies: Corporate do-nothing shills taking the lion's share of the profits while contributing nothing. I won't work for them.
I know that this post sounds somewhat embittered, and it's true, times are very hard in our industry and articles like this that provide shreds of truth amongst suggestions that the majority in our industry are bad actors, do very little to bridge the gap homeowner/contractor relations. A good homeowner/contractor relationship is a two way street, with both parties being up front and honest with each other.
I agree there are contractors who are unbelievable crooks but most of them I think don't try to rip people off but they just don't care about their work ethic or quality. They just try to make the most money as cheap as they can. I think word of mouth is the best indicator of a good one.
I have been a contractor for 18 years and no longer am insured because of this economy. You should be ware of guys who need a lot of money up front but if a guy really cares about doing a good job he usually isn't making a lot of money. On the other hand the big contractors who are fully licensed and insured have to pay for that and they usually care more about quantity instead of quality.
Drywall contractor here. I have seen folk do their own work. LOL Then they call me to correct it. Now I have undo their mess first, turning what would have been easy 3 day job into 7. Thats typical. There are many flakes out there. The ones to trust are those who have SEVERAL reccomendations to back them up and are licensed and have been in business longer than 4 years. Myself, i work by reccomendation only, never advertise and stayed busy till last year.
Nobody is working now. Morning go to work traffic is very low.