6 tips for hiring a great contractor

Ginger Dean

May 12, 2016

By: Ginger Dean, Home Finance Specialist

In: Finance and Legal

Taking on home renovations is a big decision. It's a great investment, but it also requires a lot of money and a lot of work. If DIY is not your style you may hire a contractor to oversee the project, but how do you know who to trust?

Your home is probably the biggest purchase you'll ever make and it's where you lay your head at night, so you want to hire a reliable contractor who can get the job done on time and within your budget. However, with the marketplace flooded with so called experts, how can you tell the professionals from the crooks?

Here are six things to keep in mind when hiring a contractor:

Make sure they are licensed

The last thing you want to do is hand over a check to someone who's not licensed. All professional contractors should be registered. Feel free to ask for copies of a license and certificate of insurance.

Do a background check

Before entering into an agreement with anyone -- especially when it involves your home and your money -- do a background check to make sure there are no pending litigations. Contact your local state authority to check out the contractor's professional history.

Go online and Google them

Not everything we read on the internet is true, but reading reviews on the contractor's work history is a good place to get references. You can also see which type of projects the contractor has worked on in the past. If you're renovating your basement but the contractor really specializes in kitchens, you may not want to hire them.

Ask if they have insurance for workers

Having a worker injured on your property can cost big bucks. Make sure your contractor has insurance for all workers on the site. You don't want to be held liable for an unfortunate accident.

Don't pay under the table

Even though paying cash can sometimes cut down the price, it's a bad idea when it comes to home renovations. When fronting money for materials, you want a record of where the money goes. You'll also want guarantees on the work completed and that only happens with proof of payment. If something goes wrong and you end up filing a lawsuit, having an itemized invoice can be very helpful in proving your case.

Sign a contract

This should seem like a no brainer, but it doesn't always happen. A signed contract should outline all the details of the job including a payment schedule and how monies are to be allocated between materials and labor as well as timelines and financial penalties for delays.

Finding a contractor you trust means you've got someone to talk to about all your home improvements in the future in addition to whatever project you're tackling now. It's a relationship that can last years, so do all your homework up front!


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