How to Vet a General Contractor

Thanks to video-sharing websites like YouTube, it takes less than 10 minutes for a homeowner to learn how to replace a toilet, install a window or build a secret passageway behind the bookcase in the study.

If only it were that easy to hire a general contractor.

It takes time to find the right fit for a major home renovation project. But hiring a contractor without thoroughly vetting him or her first is like giving a complete stranger a wad of $100 bills and hoping they come back with groceries.

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You might think it would get awkward as you pepper a prospective builder with questions about his or her work history and safety practices, but there are answers you deserve to know before any money changes hands.

Hesitance or reluctance to answer your questions is also a sign that you might be dealing with an unscrupulous crew. Start with these questions as you embark on your quest to find the right contractor for your home renovation project.

What can you tell me about your company?

While internet reviews of a company can be helpful, they could also be written by employees or rival businesses. Give the company a fair shake by meeting with the owner or project manager. Ask for a few customer testimonials, preferably something recent and another from a few years back. Ask how long the company has been in business and find out if the company is a member of the area chamber of commerce.

Can I see your license?

Ask for proof that the contractor is licensed, bonded and insured. If a contractor is unable to produce these documents, do not hire him or her, said Maureen Mailloux, an insurance agent for AAA Northeast. “It’s a risk you don’t want to take,” she said.

The contractor should have both general liability insurance, for damage to your home, and workers compensation insurance, in case a worker gets hurt on your property. If the contractor does not have insurance, you could be held liable for damage to the house or an injury to a worker. Your homeowners insurance might pay the claim, but that could result in higher rates or make it difficult for you to get insurance in the future.

How much?

Obviously, price plays an important role in the contractor you choose, but don’t let it be the only factor, said Steffanie Finkiewicz, senior public relations manager for HomeAdvisor, a home improvement website. “What you want is someone who can do quality work at a fair price,” she said. Seek at least three bids and ask each company to provide an itemized list of expenses so you can see exactly how your money will be spent. Confirm that the list accounts for every aspect of the project, including building permits and trash removal. Homeowners can also use resources like HomeAdvisor’s True Cost Guide to view the average price of what other homeowners have paid for similar projects in your area.

Can you give me a timeline?

Unexpected issues might come up, but an experienced contractor should be able to give you a timeline for the job. Ask for firm start and end dates and make sure they account for change orders and cleanup, too. If you decide to hire the company, verify that the dates are included in a formal legal document. You should also establish how the contractor would contact you – and vice versa – during the workday, after hours and when you need to make a decision.

What permits are required?

In most states, building permits are required for everything from demolishing a wall and changing a window to replacing a roof and installing a fence. A permit is essentially an agreement that the builder will adhere to construction codes. The contractor should offer to pull all the necessary permits for the job, which will save you time and the headache of answering complicated questions from the building inspector. If a contractor gives you a hard time about the permits, consider someone else.

Who will be in my home?

Big projects take time, and during those days or weeks, workers may be inside your home when you are not. If the contractor is not the foreman who will run the project, ask to meet that person and make sure it’s someone you trust in your home when you are not there. Ask what an average work day is like and if they will have other projects going on while working on yours. It is not unreasonable to ask for a set schedule of the hours they plan to work as well as regular progress reports as the project moves along.

Do you stand by your work?

Ask what kind of warranty the contractor provides for his or her work. Insist on a written warranty – rather than a verbal agreement – for parts and labor. An average warranty for labor is a minimum of one year, according to HomeAdvisor. Many contractors will visit your home six months after the project is complete to fix anything that has gone wrong. Some will visit again in a year.

What is your payment schedule?

This will likely depend on the size of your project. For smaller jobs, where the contractor and homeowner have agreed on an hourly charge or fixed fee, it is normal for the payments to be made upon completion. For larger projects, the contractor should provide a detailed payment plan (known as a draw schedule).  The draw schedule lists when payments will be due based on when certain phases of the project have been completed. Be leery of a contractor who asks for a huge advance to begin the project. For large jobs, contractors typically require a down payment of 10 percent, according to HomeAdvisor. Never pay more than 50 percent up front. Never pay with cash, either. A check or credit card is a much better option.

With these questions answered, you should be able to make an informed decision about the contractor you want to make your home renovation project a beautiful reality. Of course, before you sign anything, make sure everything you agreed upon is in writing in the contract.

Have a question about how a home renovation project could affect your insurance? Go to AAA.com/Insurance.