Protect Yourself When Hiring a Contractor

Alison Kasch
Written by Alison Kasch
Updated September 7, 2021
Contractor talks with homeowners
kate_sept2004 / E+ via Getty Images

Protect yourself and your investment by following these tips before hiring a contractor

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Finding a great contractor isn’t as easy as a quick Google search—things can go awry if you don’t do your homework beforehand. To ensure you’re protected from start to finish, always follow these protocols before you hire.

Get Proof of Bonding, Licenses, and Insurance

Verifying licenses, bonding, and insurance is one of the most important guidelines for hiring the best contractors. Your contractor should have all of these:

  • A valid contractor’s license

  • Liability insurance to cover any bodily injuries and property damage that might occur during the job

  • Worker’s compensation insurance to cover employee injuries

Before signing anything, always ask your contractor to see proof of these necessary credentials. Be sure to double-check licenses online via the Better Business Bureau or your state’s licensing board. Bonding is verifiable by contacting the company that issued the bond and referencing the contractor’s (or contracting company’s) bond number.

Don’t Base Your Decision Solely on Price

Unlicensed and uninsured contractors don’t have the same overhead costs as reputable contractors. This allows them to offer a much lower price that the real pros can’t compete with. While it’s tempting to keep your wallet happy, be wary of prices that sound too good to be true. If you blindly go with a drastically lower bid, it could end up costing you way more in botched or unfinished work.

Ask for References

One of the best tips for hiring a home improvement contractor is to choose someone with a great reputation. If you know someone who recently worked with a contractor and was extremely happy with the work, get that contractor’s contact info.

Starting your search from scratch? No worries—many contractors will have reviews from happy customers on their website. You can also ask for the names and contact information of at least two previous customers who had work done similar to yours. If the contractor can’t or won’t provide these details, they may have something to hide, or they may lack the experience you need to get the job done right.

Avoid Paying Too Much Upfront

Ensure your contractor’s down payment is reasonable if they require one. Anything over 30% of the project’s cost isn’t a good idea to pay upfront. Instead, protect your investment by spacing out payments based on when the contractor meets project milestones.

Secure a Written Contract

As the homeowner, getting a contract in writing is essential for protecting yourself—and your hard-earned money. This will give you a legal leg to stand on if the contractor doesn’t perform the work you both agreed on. It will also eliminate the possibility of any surprise charges or additional fees. Reputable contractors will always be transparent about costs, but it’s still important to get it all in writing.

Be Wary of Pressure and Scare Tactics

Steer clear of any individuals who use scare tactics to convince you to hire them. If there truly is a serious problem, a quality contractor will explain the situation in a frank and honest way.

Consider Hiring Specialized Pros for Additional Guidance

There are other pros to consider when hiring a general contractor, especially when you’re taking on a huge project. Bringing on an additional architect, structural engineer, or home inspector will add an extra layer of protection to your investment. While they may cost extra upfront, they might save you thousands by detecting issues and ensuring everything is up to code.

Go With Your Gut

You’re going to work with your contractor a lot, so follow your instincts when it’s time to make a decision. There are a few questions a contractor shouldn’t ask—and you shouldn’t work with them if they offend you or make you feel uncomfortable. Even if they have the right references, licenses, and insurance, they might not jive with you personally. If that’s the case, continue your search until you find someone who checks off all your boxes.

At the end of the day, it’s your money and you deserve to be happy with what you get. Protect yourself by hiring someone who demonstrates that they’re well worth the investment.

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