If you own a home, then chances are at some point you will need to hire someone to do repair work on your home. At Kamm Insurance Group, we know that hiring a contractor or handyman to perform work on your home can come with risks. Below are nine things to consider before you hire a contractor.
1.Get recommendations. Ask your friends, family, and neighbors if they have recently used a contractor, handyman, plumber, HVAC company, or an electrician. If so, would they use that person or company again? Ask your friends and family whether their project was completed on time and within their budget. Find out whether the contractor’s estimates were accurate.
2. Consult the internet. Internet reviews from satisfied, or unsatisfied, customers can tell you a great deal about a potential contractor. Review several websites that rate contractors and see what others have said about contractors you are considering. Also, check with the Better Business Bureau to see if any complaints have been lodged against potential contractors.
3. Ask for references. Request the names and phone numbers of some recent clients for whom your contractor has completed a similar job. Ask the references if they were happy with the finished product. Ask whether anything has come up since the job was completed and if the contractor addressed the issue. Find out whether the final cost was reflective of the contractor’s estimate and whether the job was completed on time.
4. Find out if your contractor is bonded and insured. You want the contractor to show you proof of insurance. If they aren’t insured, refer them to us for an insurance package!
5. Get multiple estimates. Get two to four estimates from different contractors. Remember the old adage: You get what you pay for. This doesn’t mean that you have to hire the most expensive contractor. But if one estimate is significantly less than all of the other estimates, that could be a red flag. That contractor may plan to use lower-quality materials or cut corners. The contractor may have also intentionally underbid the job in an attempt to obtain your business, only to increase the price later.
6. Get it in writing. Never pay a contractor before you have a written contract outlining everything the contractor is going to do to your home. The more specifically the work is identified, the better. The contract should also specify the cost of all materials that will be used and provide start and completion dates. Find out whether the contract price is an estimate, which could change during the course of the project, or a total cost for completion. If the contract price is an estimate, then make sure the contract specifies that the job cannot exceed a specific amount. Additionally, specify in the contract that no changes can be made unless they are in writing. Make sure the contractor provides a warranty on labor and materials and that it is spelled out in your contract, including who you need to contact to make a claim under the warranty, any limit on the amount of the warranty, and the length of the warranty. The contract should also spell out all of the contractor’s duties. For example, if you are having flooring replaced, then the contract must specify whether the contractor will be moving furniture and putting it back once the job is complete. You will also want to specify whether the contractor is responsible for cleanup and disposal of all construction materials at the conclusion of the project.
7. Set a payment schedule in the contract. You never want to pay a contractor more than 50% up front. Depending on the size of the job, your initial payment will ideally be no more than roughly 30% of the total cost of the project. The contract should specify that each subsequent payment is only due after certain phases of the project have been completed and sets out a timeframe for each phase to be completed. If a bank will be providing a construction loan, make sure you have the right to approve each disbursement. If the time comes for your next payment, or your contractor demands a subsequent payment from you, but the previous phase has not been completed, then you have the right to refuse payment until the contractor completes the phase for which you have already paid. Always pay your contractor in a way that is traceable, i.e. with a check, credit card, or debit card. Do not make the final payment to your contractor until you have verified that all work is complete and acceptable.
8. Extras. Be aware that when you ask for upgrades or additional work, you are going to have to pay more for that additional work. Often, once a project gets started, it is tempting to ask for upgraded materials or some extra work to be done. If your contractor agrees, then you should find out how much the extra work or material is going to cost and get it in writing before they start that work.
9. Maintain good records. Keep a copy of your contract, all payments you have made, any additions or edits to the contract, and all correspondence with your contractor. Even if you have had a conversation in person or over the phone, make sure you document that conversation with an email or letter to you.
Hiring the right contractor will ensure that your project is completed successfully, as well as on time and on budget. This process can seem daunting. However, the time you spend researching and the detail you put into your contract will be reflected in the final product. It would be a headache to work with someone you can’t rely on. You could find yourself with an unfinished remodel or a maxed-out budget. Allow yourself the time to do your research and ask the necessary questions.
We insure many local contractors, and we would be happy to refer you to them. Just let us know what you are looking for and we can provide the reference. Once you have the updates complete, please let us know so we can update your homeowner’s insurance as well.