The North Coast Builders Exchange magazine recently shared an infographic with some great reminders about hiring a contractor. I thought I’d expand on the subject.
Whether you need someone to replace a plug outlet or build a whole new house, I strongly encourage you to go through the time and effort to select the right person for the job — and to document agreements with details like scope, timeline, and budget to reduce misunderstandings.
Hire a state-licensed contractor and verify credentials
If you want to hire someone to address a construction-related issue and the project costs more than $600, the state requires a contractor’s license. The contractor should also carry an insurance bond and if the contractor has employees, he or she must also carry workers’ compensation insurance. In addition, you can request a completion bond, which is different than the insurance bond. The completion bond guarantees your job will be completed on time and in a workman-like manner.
Before you hire anyone, confirm these basic requirements. While these are important, they don’t tell you whether the contractor is a good one. So your next step is to ask for referrals, just as you would for a Realtor, doctor, lawyer or accountant. While Yelp and other online review platforms are fine, in my mind nothing beats talking to people you know and trust.
I once talked to a friend about hiring a pool contractor he had recently used. I was shocked when he said, “If you hire this idiot, I’ll never speak to you again.” Apparently, the pool contractor had been wholly unqualified. I got an earful about how the bottom of my friend’s pool dropped out when they filled the new pool with water because the contractor used the wrong materials. Then the contractor refused to fix the problem. This is why we talk to friends.
Define the scope of work and get a couple of bids
You’re more likely to find the right contractor if you know exactly what kind of work you want done. Are you looking for a kitchen remodel, a room addition, or a steel commercial building? As in other fields, contractors specialize. If you want a bedroom addition and the contractor’s only references are for commercial buildings, consider other options. Even if you find a contractor with the right credentials, I always like to get a couple of bids (in writing).
Create a contract that covers the work and any contingencies
Depending on the complexity of the work, you’ll need architectural plans drawn up. Invite your contractor to suggest changes to the plan to make it more efficient and/or cost-effective. Not all architects are as in tune with customer needs as contractors who work directly with clients.
Once the work is outlined, ask for a contract that specifies what you’re paying for, the timeframe, and the payment schedule. A fair payment schedule outlines how much a contractor will charge as an up-front deposit and when other installments will come due (based on completion of certain tasks). For example, when building a home the contractor may ask for 10 percent up front, then additional deposits upon completion of the grading, framing, weather-tightness (roof, siding), rough wiring, plumbing, etc. All told, there may be a half a dozen draws to complete the whole house.
If the contractor asks to be paid before the tasks are completed, I’d recommend you refuse. I also recommend withholding the final 10 percent until you are 100 percent satisfied with all work.
A few years ago, I needed a simple deck refurbishment. One of the two contractors bidding on the job said it would only take him two weeks because he had a crew ready to go. I made the mistake of not putting this in writing. The job took a year because that summer, the contractor’s carpenters walked off the job when the temperature was over 100 degrees for weeks.
So, a word to the wise, keep a record of everything – contract, summary of conversations, final approval from the building department, warranties, everything. Keep it all for 10 years in a file you can find. After a decade whatever was going to break probably has.
If you have questions about property management or real estate, please contact me at [email protected] or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.
Dick Selzer is a real estate broker who has been in the business for more than 45 years. The opinions expressed here are his and do not necessarily represent his affiliated organizations.
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