10 Tips from the BBB on How to Hire a Home Improvement Contractor

The Better Business Bureau (BBB) has long been a resource for consumers. The BBB is one resource that consumers can turn to in trying to resolve a problem with a company. In addition, the BBB maintains complaint records on businesses, so that consumers can investigate companies such as contractors, so consumers know the track record of the business before becoming a client.

#1 Check the History

To search the BBB records, visit the organization’s website at www.bbb.org. Start by inputting the zip code of the company you are looking into, or you can enter your own zip code if the company is local. This pulls up the local branch of the BBB that covers your area. Click on the “Check Out a Business or Charity” button and type in the business information that you have. This search will pull up the listing for the company and any complaints against the contractor.

#2 Compare Cost Estimates

Before deciding on any one contractor, you first have to continue doing some investigation into the company. Once you check out the contractor’s track record, then it’s time to get an estimate from each contractor you are considering. Obtain at least three estimates. Also, make sure to get the estimates in writing and have the contractor itemize the costs, so you can contrast and compare on a line by line basis.

#3 Check on Licensing

Contact the county business licensing office. Verify that the contractor has a current license with the county. Without a license, it is illegal for the contractor to do business in the county.

#4 Verify Insurance Coverage

You also want to verify that the contractor carries the proper amount of liability insurance coverage. The contractor can typically provide you with a copy of the insurance certificate issued from its insurance company. Liability insurance coverage protects you in the event there is damage to your property.

#5 Check References

Ask the contractor for past client references. Try to obtain references for work that is similar to your project. Also, obtain recent clients; ideally within the last few months. After you obtain the references, contact the clients to talk with them about their experience working with the contractor.

#6 Obtain a Written Contract

Once you work out all of the details with the contractor, it is time to get your agreement in writing. When the contractor provides you with the written contract, read it carefully—especially the fine print. The contract should contain all of the details that you discussed and make sure that you have a full understanding of all of the terms and conditions before you sign it.

#7 Create a Payment Schedule

Another way to protect yourself when working with a contractor is to have the contract include a divided payment schedule. Associate the payments with the contractor meeting milestones. It is customary to pay an upfront deposit, but make the next payment after 30% of the work is done, the next when 60% of the work is done and the final payment when the work is 100% complete (or some schedule like this). Avoid paying the contractor in cash, but rather create a payment record by paying with checks or a credit card.

#8 Warranty

In addition to the terms and conditions of the work as it is getting done, you also want to find out about the warranty. Get the contractor to put the warranty on both the materials and the work in writing.

#9 Bonding

In addition to insurance, ask the contractor if they are bonded. If so, obtain proof. A bonded contractor with bonded employees protects you against theft and damage during the construction or home improvement project.

#10 Criminal History

Run a background check on the contractor. Find out about the records of any people you will be inviting in to do work on your home.