Are you getting ready to do some remodeling? Maybe spruce up your kitchen or upgrade your bathroom? You’re not alone. Homeowners who put off small projects are now feeling more confident about the economy and are therefore starting to spend more freely. The industry is starting to benefit from the rehabilitation of foreclosed properties (we’re on track for a projected 1.2 million foreclosures this year alone – a record high). As a result, spending on remodeling could rise 4-6 percent this year, according to Harvard University’s Joint Center for Housing Studies. But before you jump on the renovation bandwagon, here are a few things you need to know about choosing a contractor.
Check credentials and disciplinary history
Here’s what you are looking for: Someone who has been in business for a while, is licensed and registered (every state has different rules; check yours on contractors-license.org or ask your local building inspector), has insurance (liability; worker’s comp), and has a solid reputation and a clean bill of health from the Better Business Bureau and from your state’s consumer protection agency.
Once you’ve talked to friends, family, and neighbors (did the contractor show up – and finish – on time? Were there any unexpected costs?), and separated the good from the bad, get bids from your top three, tossing the lowball offer. Yes, we’re all looking for value (!), but if someone comes in several thousand dollars below the others, he’s probably cutting corners somewhere (think: cheaper materials) or may start the project only to tell you down the line that it’s more complicated than initially assumed, and therefore more expensive. Don’t invite trouble.
Think beyond price
You’re going to be spending a lot of time with this contractor, so not only do you have to feel comfortable with the price that you’ve been quoted, but you should also feel comfortable with their personality, background, methods, and communication skills. Is everyone clear about the project at hand? Everyone on the same page? If not, you could end up disappointed, frustrated, and possibly out several thousand dollars beyond what you budgeted for.
Contract, contract, contract
Every project should have a contract, no matter the size of the project. And every detail about the project should be included in this contract — from a work timetable (start and finish dates) to description of the work, to materials that will be used (right down to the brand/make of the fixtures) to the payment schedule and everything in between, including a time limit for fixing defects. That way, if a dispute arises, it’s not endless.
How you pay a contractor is as important as how much
Don’t pay a contractor more than 30 percent upfront. Make periodic payments as the contractor completes certain portions of the project (expect to make an average of three payments per project), dangling a significant amount – at least 10 percent – to be paid only when the job is completed to your satisfaction. This is the best way to ensure that the work gets done when – and how – you want it.