Most contractor horror stories start the same way: one quote, a handshake and a big check up front. Here’s how to do it differently.
Licensing, permit, lien and tax rules vary by state and city and change over time. This guide is general information, not legal or tax advice; check with your local building department, state licensing board or a professional for your situation.
Checklist
- Get written bids from several contractors for the same scope of work.
- Check the license, insurance and recent references before you choose.
- Put everything in a written contract, including a payment schedule tied to progress.
- Never pay the full price up front, and avoid paying in cash.
A good contractor can make a project painless. A bad one can cost you money, time and sometimes your safety. Most of the difference shows up before any work begins.
1. Define the job
Write down what you want done, in as much detail as you can: rooms, materials, finishes and any must-haves. A clear description makes bids comparable and prevents arguments later.
2. Find candidates
Ask neighbors, friends and coworkers who’ve had similar work done. Check online reviews, but read them critically and look for detailed accounts rather than star ratings alone.
3. Get written bids
Ask at least three contractors to bid on the same written scope. The Federal Trade Commission advises getting written estimates from several firms, and notes that the lowest bid isn’t always the best deal.
4. Check the basics
Before you choose:
- License: confirm it with your state or local licensing agency. See how to check a contractor’s license.
- Insurance: ask for proof of liability insurance and workers’ compensation where required. See what insurance your contractor should carry.
- References: call two or three recent customers and, if possible, look at the work.
- Permits: ask who will pull them. See do you need a building permit?
Red flags
Door-to-door offers, cash-only deals, pressure to decide immediately, requests to get the permits yourself, and large payments before any work starts.
5. Sign a written contract
Everything you’ve agreed on belongs in the contract: scope, materials, price, schedule, payment terms and what happens if plans change. Our contract checklist covers what to include.
6. Pay as the work progresses
Tie payments to finished stages of work rather than dates. Keep the last payment until the job is complete, inspected and cleaned up, and until you have lien waivers for the work you’ve paid for. Paying by check or credit card leaves a record; cash doesn’t.
7. Keep records
Keep the contract, change orders, receipts and messages together, and photograph the work at each stage. If something goes wrong, these records are what you’ll rely on; see when a contractor job goes wrong.
Homeowners ask
Is the lowest bid the best choice?
Not necessarily. Compare what each bid includes. A low bid can leave out materials, permits or cleanup, or come from someone cutting corners.
How many quotes should I get?
Three is a common rule of thumb for larger jobs. Make sure each contractor is pricing the same scope so the quotes are comparable.
What if the contractor wants to start right away?
Good contractors are often booked weeks ahead. Pressure to sign today, or a crew that ‘happens to be in the neighborhood,’ is a warning sign.