5 Steps to Hiring A Contractor

Sometimes projects are bigger than we anticipate.

Even the best DIYer knows there are some things best left to professionals.

Where does one even begin to find a contractor?
How do you protect yourself and your home?

These are big and scary questions!

For the past 12 years I have worked full time in an industry tied to construction.
I have seen many things through the years and below I will outline the best way to protect yourself when it comes time to hiring a contractor.

1.  Ask Around

Find out from friends and family a contractor they have used in the past. 

Don't stop there.  Keep asking around until you get a few names.

Be sure to ask them questions about the contractor's quality of work.

Did they stick close to the budget?  Or run excessively over?

Did they finish close to the estimated time?
Did they find the contractor easily approachable?

These are just some questions to ask when looking for feedback.

 

If you don't know of anyone who has used a contractor, don't be afraid to call your local building supply store.  
Contractors work closely with the local lumber yards and chances are they can recommend a few contractors for you to call.

2. Do Your Research

Now that you have a list of potential contractors, do some research online before contacting them.
Every state has an agency that oversees construction contractors licensing.
If you do not know the department for your state a simple online search of 
"Verify Contractor license for state of xyz" will bring you to the correct agency.
On the website you will be able to search by the name of the company.

Some states allow to search by the contractor's first and last name as well.

Although each state varies on what is reported, most will tell you how long they've had their license, license numbers, previous licenses, who is part of the entity's governing body (may only be the contractor), if they have had any violations or open lawsuits, and much more. 

Do you see several previous licenses listed?
Generally, there are 2 reasons for that.

1.  A developer will often get a license for each plot they will be developing and is a common business practice.

2.  A contractor will change their business name (get a new license) because their previous business went under.
Be cautious of any contractor associated with many previous licenses.
If I came across this situation, I would not hire them.

If you do not see a license listed for a suggested contractor DO NOT USE THEM. 

I can not stress this enough.
Do not hire an unlicensed contractor.

3.  Contacting Potential Contractors

Once you are armed with some knowledge on different contractors, call each contractor and ask to meet to discuss your project. 
Be ready with a budget amount and a good idea of what you want completed.
This will help the contractor put together the best proposal for you.

Don't be afraid to ask questions!
How long will the project take?
When can you get started?
Do you have any references for me to contact?
When can I expect a proposal?

 A reputable contractor will be able to answer these questions and have no problem giving you previous clients to contact.
The proposal should be presented to you with a breakdown of costs. 
Having more than one proposal allows you to do a side by side comparison.
A dollar discrepancy in bids may be due to a contractor leaving an item off the proposal - accidentally or intentionally.  A good contractor will have all items listed and broken down with a cost.  I've also seen situations where a contractor will leave items off from their bid to come in with a lower price only to have "unexpected" costs arise during the construction phase.

No one wants surprises and studying the bid ensures all needed work is accounted for and expected.
 

4.  Lien Rights

This is a biggie friends.
A real biggie.
If you get nothing else from this post, please, please, understand this one.

Anytime you hire someone to do work in your home and/or property they are acting on your behalf.  When product is ordered and delivered for your project the company supplying the product immediately has lien rights on your property.

What does that mean?

In short, if the product does not get paid for by the contractor the company has a legal right to place a lien on your property and can begin the steps to foreclose on your home - even if you already paid your contractor for the product.

You read that right.
 
Liens are only removed from the property once the product has been paid.  To avoid foreclosure, this leaves the homeowner with no other option but to pay the bill to the supplier even after they have paid the contractor for the very same product.

 This is one of the reasons why I wrote this post.  I have seen many contractors work themselves into a project, take the clients money and disappear only to show up with a different business name and different string of clients.

Some suppliers are required to send out an Intent To Lien.
This is not a lien and will say so on the paperwork.
An Intent to Lien is a supplying company's way of letting you know they hold lien rights on your property until payment is received on their product. 
It looks scary, but it is also a standard business practice and protects you - the homeowner - by keeping you informed.

5.  Protecting Yourself and Your Property

A reputable contractor will have no problem showing you the bill from a supplier.  
Some contractors will let you pay the supplier directly.
If the contractor prefers to pay the bill (after all, it is their business account) and asks you for a progress payment you have a legal right to write the check to the contractor and the supplying company.  
This is called dual paychecks and ensures the product is paid in full.

Anytime you do not pay the bill yourself you may require lien releases from the supplying company showing the contractor has paid the bill on your behalf.  This is a standard practice in the construction industry and you should have no problem securing one from any company through your contractor or from the company itself.

Do not issue any more checks until you receive a lien release for the previously paid product.   

Final Nuggets of Wisdom

Good contractors are busy.  Exceptional contractors are very busy.
When hiring a contractor do not use the one who states they can begin immediately on your project.
There is a reason they can start right away - and in my experience it isn't a good one.

All projects have hiccups and bumps and obstacles.  
Expect this.  There is no smooth sailing and that's ok.  



There you have it.  All my ways to help you find the best contractor around.

Keep your eyes on the finished project and enjoy this adventure!

Good luck!