How to Find A Contractor Who Will Get The Job Done (For Real!)
As housing prices continue to rise and inventory contracts, home buyers in the hottest markets are finding that “the perfect home” may be harder to afford. One option is to buy a “fixer upper,” which allows you to create your own version of a HGTV-worthy pad at a more attainable purchase price.
Of course, few home buyers are feeling flush when they’ve just scraped together their down payment, which means a mortgage that wraps in home improvements might be an ideal solution. Two options to consider are the FHA 203 (K) and Fannie Mae’s HomeStyle Renovation Mortgage, which allow borrowers to repair and improve their home by rolling renovation funds into the loan balance.
Surprisingly, in many cases, financing your improvements may end up being the easy part. While you’re mentally moving in to the completed home, there’s one other challenging hurdle yet to tackle — overseeing the improvements.
The process starts with finding a contractor whom you trust, which can be a project in itself. Take San Diego-based Jody Costello: Her website ContractorsFromHell.com just sort of hints at her experience, doesn’t it? Her contractor abandoned her home mid-project, leaving behind leaking windows, a failing roof, and decks that had not been properly flashed, which allowed rain water to pool back into the walls. Oh, and he had $60,000 of her money.
The best way to avoid contractor woes is to do plentiful research upfront. We turned to Costello and other experts to find best practices for a deep dive into your contractor’s business practices before the project begins.
Don’t skimp on your background check.
The first thing to check is that they are licensed, bonded, and insured. Ask your contractor to share the papers, then double check the license through your state’s Construction Contractor Board database, (Google to find yours) which will show whether it is active and verify they are bonded.
Then you’ll want to check out their online reviews and references.
Unfortunately, typically this is where homeowners stop their research, says Costello. “Having a license does not mean a contractor will be honest, competent, and reliable, and referrals alone should not be the sole way you choose a contractor,” she says. “You’ve got to roll up your sleeves and do some serious checking if you want to reduce your chances of hiring a bad contractor.”
Costello recommends contacting their suppliers, who will be quick to dish on a shady type, and searching for any “mechanic’s liens,” which are legal claims filed by subcontractors on remodeling projects they have worked on. A simple Google search also can turn up any lawsuits involving your potential contractor.
Look over the contract with a fine-tooth comb.
While the blueprints will be your contractor’s guide to complete the work, the contract will be your guide to make sure you’re protected financially. Pay special attention to these areas:
It’s easy for contractors to gloss over details, which can create confusion and conflict. For example, a vague scope of work might say “cabinets, plumbing, tile, finish wood, and painting,” says Cindy Carey, co-owner and COO of Starburst Construction in San Jose. But, she asks, “What type of cabinets? How many cabinets? Is the tile for the shower, counter, and backsplash? How many coats of paint? Vague orders can become a battle of ‘he said/she said’ and lead to costly change orders and project delays.” Make sure the scope includes an itemized list of materials, fixtures, and finishes.
Make sure the contractor agrees to milestones along the way, along with a set finish date, possibly with monetary penalties attached if it extends.
And remember, the lowest quote is not always the best; it could mean the contractor is desperate for work or might be cutting corners.
- Payment schedule
Whatever payment schedule you agree to; for example, 20 percent up front and then a certain amount each month, make sure you are tracking payments in relation to progress. “Never let the rate of payments exceed the amount of work that has actually been performed,” suggests Bodrozic. And, he cautions, always keep about 25 percent of the total contract as the last payment, which you should release only when all the work has been done to your satisfaction. “Withholding some payment until the end ensures your leverage to get the contractor to actually finish the project in order to get their final check.”And, adds Carey, never pay in cash to a salesperson: Use a check or money order to the company itself so that you have a paper trail should you need it.
Make sure they have a plan for permits.
The person who pulls the permit is responsible for the project, so make sure that is the contractor, not you, says Carey. “If they have you pull the permit, then you will be considered the employer if someone gets hurt on the project or there is an undocumented worker.”
And make sure they have the permits ready in a timely manner: Building departments are busy, and an inspector could shut down a project and cause delays until the issue is resolved if permits are not ready when work begins.
Meet the contractor in person.
You want to size up their communication and demeanor, so let the questions fly freely; an ethical contractor won’t mind, says Costello. She recommends asking them how much they’ll be involved in your project; how they handle problems when they come up, as they are bound to; and how often they will communicate with you during the project.
Jim Kabel, president and owner of Case Design and Remodeling in San Jose, Calif., suggests getting into details. Here are some sample questions you might not think about, but could matter to you:
- How do you control dust?
- Where will you place the temporary trash bin and for how long?
- What hours will you work?
- To what extent do you clean up your workspace at the end of each workday?
- Are you and your subs all licensed and insured?
- Do you play music while working?
- Will everyone take the same lunch hour?
- Are you available after hours if there is a problem related to your work? (For example, leaking water, collapsing wall, etc.)
- And for pet owners, are you or your crew afraid of dogs or allergic to pets?
And finally, while you’re not going for style points, meeting them in person can help you spot a potential red flag. Wilkins nixed one contractor who was wearing shorts and sandals because he didn’t appear to be as professional as a contractor in slacks with his company name on his shirt.
“You’ll be spending a lot of time together,” says Bodrozic, “so you need to know that your communication styles and expectations mesh.”