Hiring a Contractor Checklist: What to Consider

When planning your next home improvement project, selecting the right contractor is an important first step. It is important to check the quality of the work before you hire a contractor. You should also agree on the scope of work and specify the work that you would like done.

Here are the top 10 important tips for selecting a contractor.

1. Get multiple estimates

Speak to at least three contractors and ask for written estimates. Compare apples-to-apples when comparing multiple estimates. Consider the differences in building materials, methods of work, timelines, and other factors between contractors. Estimates that are either too high or low should be avoided.

2. When possible, hire local licensed contractors

Local contractors will be easier to reach if there are any problems with the job in the future. They are also more likely to know the building codes of your area. You can ask the contractor to provide their physical, local address. Anyone who refuses to leave the contract overnight or goes door-to–door should be viewed with suspicion.

3. You can check their past work

What has been the outcome of their previous work? Are they specialized in the type of work that you need to be done? Referrals can be a good way to find out about their quality, workmanship and customer service. Ask about their business history and professional reputation with the Better Business Bureau. It is best to choose a contractor who has more than five year’s experience.

4. Make a sound decision slowly

Before making a final decision, get multiple bids. Do not be rushed into making a decision, especially when it comes to signing a contract. When asked to make a large upfront deposit, be cautious. Be sure to read all contracts and estimates. Ask your family, friends, or neighbors if they’ve had good experiences with emergency services contractors if you need emergency repairs and don’t want to spend the time researching a contractor.

5. Verify their insurance and bonding

Contractors should have adequate insurance. Contractors are legal entities in their own rights (whether sole traders or companies incorporated) and the majority of liability policies owned by business owners will not cover their liability.

It is a good way to manage risk by obtaining insurance certificates from contractors. To ensure that contractors maintain appropriate and current insurance, it is recommended to implement a system to obtain insurance certificates prior to the expiration of their policies.

Many contracts stipulate the types and levels of insurance that contractors must possess before they begin their work depending on your business.

Verify that the contractor has adequate insurance and bonding. You can ask the contractor to provide a Certificate of Insurance (COI) that should include the name of the insurer, the policy number and the policy limits. Contact the insurance company to confirm the coverage. Also, make sure that the policy is in force. Avoid doing business with contractors who do not have the proper insurance. You may be held responsible for any accidents that happen on your property if the contractor does not have insurance.

Contractor Insurance protects not only their business, but also yours. It ensures that you will be compensated if the project results in property damage or injury.

6. Write everything down

Before work starts, secure a contract that is comprehensive. Make sure you have everything written down and that the contract is well-written and clear. If the project is expensive, you may want to have a lawyer review it before signing. The contract should include the following:

The price for each item and a detailed description of what is to be done.
Payment schedules – For example, a half-down payment and a third when the work is completed and the remainder due at completion.
Estimated start and completion dates for larger projects.
The contract should include any applicable guarantees. These should clearly specify what is covered, who is responsible, and for how long.
Both parties must sign. Never sign a contract that contains blank sections.

All parties should acknowledge changes to the contract in writing. You should ask the contractor to confirm that all building permits have been obtained. You should always follow the cancellation clause in a contract if you want to cancel it. You should send a written cancellation notice by registered post to be able to prove the cancellation.

7. Understanding your right to cancel

You may be entitled to a cooling-off period under federal law, during which you are able to cancel your contract without any penalty. To understand your rights, check with the Federal Trade Commission as well as the laws in your state. Be sure to adhere to the applicable rules throughout the cooling-off period. Send the cancellation notice by registered mail if you decide to cancel. This will provide you with proof of your cancellation.

8. Do not pay up front

Do not pay the full amount before the project is complete. Pay with checks made payable to the company and not to an individual. Do not pay cash. It is common practice for larger projects to pay a third of the estimated cost as an initial payment. You can keep your cashed-in check as a proof of payment. You can put yourself in a better position for negotiation by maintaining a professional presence.

9. Anticipate delays

Delays can happen and they may not be your contractor’s fault. Weather conditions, for example, can cause delays in the completion of your project despite the time frame outlined in the contract. Be realistic, and be prepared to change your plans if necessary.

Even a short delay can allow you to realign yourself and improve the quality of project deliverables. Be proactive, anticipate risks, and communicate more often.

10. Keep a job record

Keep all documents related to your contract in one file. You should also include any change orders, specifications and plans, invoices and bills, canceled check, certificates of insurance, letters, notes or correspondence from the contractor.

If you want your business to remain profitable and flexible, keeping accurate records should be top of mind every day. You will be able to keep track of the financial status of your business if you maintain accurate records.

Written by Billy Guteng. November 28, 2023

Billy is a content writer for Kukun. He was born in France, and has lived in multiple cities around the world ever since. He loves art, design and architecture as well as construction and real estate.