Finding a licensed contractor for your home renovation project should be an early priority in your planning process. It can help you avoid scams and opportunists who take advantage of homeowners after natural disasters or other emergencies. Licensed contractors also are hired by home warranty companies that have a track record of keeping good faith with homeowners. If you are asking, “What is a house warranty?” Consider educating yourself by researching more about home warranty.
1. Check Their License
A license is usually required to do any skilled work in another person’s home or property. This includes everything from drywall and painting contractors to design-build remodeling firms and plumbers.
Licensing requirements vary by state, but most require years of industry experience, passing trade or business exams and carrying insurance and a bond. When you meet with potential contractors, don’t be afraid to ask them to show you their license, proof of insurance and bond.
Some online contractor referral services may not properly vet their contractors or check for the appropriate licenses. Always visit your state’s licensing website to verify a contractor’s license and complaint history.
2. Check Their Insurance
Contractors must show proof of insurance as a condition for getting licensed. If you work with an uninsured contractor, your homeowners’ insurance policy could end up paying if one of their workers is injured while working on your project.
Additionally, it’s important for contractors to have workers’ compensation insurance for their employees. This insurance protects you if an employee is injured while working on your home or business renovation.
It’s also a good idea for contractors to have liability insurance, which can cover property damage caused by the work they do. They may also need to put your money in an escrow account or prove they have bond insurance to ensure their payment.
3. Check Their References
Having the right contractor for your project can make all the difference. A reputable contractor will be more than happy to provide you with references.
Online reviews can be skewed and tell only the good and bad, so request to talk to previous clients who have had projects done similar to yours. Find out what the experience was like, if there were any issues with scheduling and how the contractor treated their client during the project.
Also, ask to speak with material suppliers for financial clues. A long-term relationship
should indicate a sound fiscal background. A sudden change in business may be a red flag.
4. Check Their Work
When it comes to home repair, you want to be sure you are getting quality work. Using unlicensed contractors can cost you more in the long run because they are likely to do shoddy, substandard work that will have to be corrected later. They also may not pull the required permits, which could result in costly fines for you as a homeowner.
You should be able to verify a contractor’s license status through your local licensing board. Additionally, you should ask for references from past clients and a detailed contract that details the work to be performed, prices, time schedules and guarantees. This will help you compare apples to apples when obtaining quotes from several contractors.
5. Check Their Pricing
When choosing a contractor, it’s important to compare apples to apples when evaluating estimates. Ask each contractor to break down the cost of materials, labor and profit margins.
Also, be sure to negotiate a payment schedule upfront. Typically, contractors will require a down payment at contract signing and subsequent payments in increments throughout the project.
It’s important to keep in mind that licensed contractors are more likely to have a reputable work ethic than “guys with a truck.” They’re able to provide a written contract and a warranty on their work, which can protect you from costly mistakes down the road. It’s not worth the risk of securing a “cheaper” contractor without this type of protection.
6. Check Their License Status
Licensed contractors must pass trade, business, and law tests, present proof of work history and financial records, and have general liability insurance. They should also be well-versed in their trade’s best practices, industry regulations and local codes.
Unlicensed contractors can offer lower rates, but that is often because they cut corners and don’t carry worker’s compensation or liability insurance. This leaves you liable should someone be injured on the job, which could cost you significantly more than the “savings” you would have gained by hiring an unlicensed contractor. The bottom line is comfort should play a larger role than price when selecting a contractor.