Choosing a Contractor for Your Home Remodel

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For many people, remodelling their home is one of the most exciting and overwhelming projects they will ever undertake. It’s thrilling to work with the architect and see all of the wonderful possibilities and the future transformation of your home. But, to make those drawings a reality, you will need to find a reliable, honest contractor that will work within your budget and ensure your dream home is built.

1. Ask for recommendations

Ask friends and family for the names of contractors with whom they have personal experience. Your architect is a great source of referrals and the building inspectors in your city’s planning department can also offer recommendations. Check the National Association of the Remodeling Industry (NARI) for contractors that are members in your area.

2. Conduct Phone Interviews

Once you have a list of contractors, take the time to make a quick call to each and ask for some basic information. The answers to these questions will reveal each contractor’s reliability, availability and their workload.

  • Do they take on projects of your size?
  • How many other projects do they work on at once?
  • Will they provide a list of prior clients?
  • Will they provide financial references from banks and suppliers?
  • How long have they worked with their subcontractors?

3. In Person Interviews

Based on the information you’ve gathered from your phone calls, choose three or four contractors and arrange to meet them in person for ballpark estimates and to ask more in-depth questions. The contractor should be able to clearly answer each of your questions. Some questions to ask are:

  • How long have you been in business?
  • How long do you feel my project will take?
  • Do you provide a project timeline/schedule?
  • What is your communication process?
  • Who will be my main point of contact?
  • Can I visit an in-progress project?

This is also a great time to assess whether their personality will mesh with yours, a key factor since you will be working closely as a team and this person will be in your home for an extended period of time. Although personality is important, don’t let it be the overriding factor.

4. Do Your Homework

Armed with references and the information each prospect has provided, its time for some background work. . It is crucial to check each contractor via the Contractor’s State License Board, ensuring that they are in good standing. Any contractor with a lengthy history of disputes should immediately raise a red flag. Do a search online and see what pops up on Yelp or other websites. Call and speak with each reference, asking how their remodel went and ask to see the finished product. Visit an in-progress job site to see how each contractor works. Is it tidy and safe? Are workers courteous and cautious with the homeowner’s property? All of this information gathering will assist you in determining which contractors are dependable, have a solid work ethic and best fit your needs.

5. Get Bids

Now that you’ve further narrowed your list of prospects, now is the time to get detailed bids on your project. Each contractor will need a complete set of construction drawings as well as what the homeowners expect from their project and an idea of their budget. To be sure you can compare apples to apples, have each contractor break down the cost of materials, labor, profit margins and other expenses. Materials typically run 40% of the total cost and the average profit margin is 15 to 20%.

6. Throw Out the Lowball Bid

Price should never be the determining factor when choosing a contractor. Often, the person coming in with an extremely low offer is cutting corners or desperate for work, possibly resulting in additional costs over the duration of the project. The single most critical factor in choosing a contractor is how well you communicate. All things being equal, you are much better off hiring someone with whom you have an open, honest and communicative rapport than choosing based on price alone.

7. Payment Schedule

Once you’ve chosen the contractor with whom you wish to work, it’s time to arrange a payment schedule. Generally, there is a 10% up front payment at contract signing, then three 25% progress payments spaced equally over the duration of the project. The final 15% should be paid only after the project is complete, signed off by the inspector and all of your punchcard items have been checked off. Red flag warning: Steer clear of contractors who ask for a significant amount up front as this can be indicative of financial problems.

8. Sign the Contract

A contract is a key component of your newly forged relationship with your contractor. It should detail:

  • Proof of liability insurance and worker’s comp payments
  • Requirement of contractor to provide lien releases from subcontractors and suppliers (this protects you if he doesn’t pay his bills)
  • High level work schedule
  • Payment schedule
  • Start and completion dates
  • Specific materials and products to be used

Remember that each modification you make to your project that deviates from the initial bid results in a ’change order’ and a subsequent increase in your cost.

Click here for additional advice on choosing a contractor, especially weeding out those who are less than upstanding. The Federal Trade Commission also has a great site with useful information on hiring a contractor.

When all is said and done, you should walk away from your home remodelling project with a sense of satisfaction and accomplishment as well as a wonderful, new space.