The Constructor

What Should You Know Before Hiring a Contractor?

What Should You Know Before Hire a Contractor

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Selecting the right and competent contractors is critical for completing any construction, repair, or improvement projects.

First, the owner needs to set a clear and detailed plan for the project. Then, a licensed contractor should be hired as they possess all the essential knowledge required to perform the work. At least three bids should be reviewed and the most appropriate one should be chosen and not the lowest-priced ones.

Usually, lower price estimates do not necessarily provide a good final product. So, make sure to review all prices and question higher prices as the contractor may give reasonable explanations.

The contract document is substantially significant since it is a binding document between you and a contractor. It protects you and compels the contractor to carry out the job as per the contract terms. Therefore, project phases and steps should be clearly stated in the contract document to avoid any disputes in the future. Additionally, payments and deadlines have to be agreed upon and written in the contract.

Reputable contractors are proud of their previous works, so they are happy to provide references which is a good sign. However, you should be alarmed if a contractor or salesperson pressures you to sign a contract or you cannot verify the contractor's license. 

What Should You Know Before Hiring a Contractor?

Planning the Project

A detailed plan should be prepared for a project that specifies precisely the size of the work, finished appearance, and project cost. Careful planning will help the owner to receive accurate bids from the contractor. Therefore, determining the kind of work you want to do, what it takes to do it, and the professional hired to do the job will eliminate most problems and headaches that may arise during the work.

Selecting A Contractor

Licensed contractor possesses the required knowledge and experience to carry out the work properly. In addition, licensed contractors are bound by the laws and regulations that are designed to protect customers. So, in case of improper conduct, a customer is eligible to get monetary compensation from a contractor’s transaction recovery fund.

There are licensed general contractors and specialty contractors to carry out public, and specialty construction works. That is why a client needs to hire a contractor with the right specialty and experience. The contractor's license should be checked as the license number on business cards does not necessarily mean that a contractor has a proper license.

Finally, ask a contractor for local references and contact them to see how they were satisfied with the contractor's work. You may also speak with subcontractors, material suppliers, and financial institutions to check the contractor's financial responsibility that you intend to hire.  


Bids are offers to carry out a job. An owner should get a minimum of three written estimates or bids using identical plans to compare the prices and contractors. Lower prices do not guarantee a good outcome for your work; therefore, do not blindly accept lower prices.

Discuss each bid with contractors and ask for an explanation regarding higher prices as they may be worth it. Conversely, an offer with lower prices may not contain all the works described by other competitors.

The Contract

Any document or estimates you may sign would become a contract permitting a contractor to do the job. Therefore, do not sign any document until you correctly understand and agree to all terms. Before signing it, it is good to discuss the proposed contract, plans, and specifications with an attorney.

The contract for residential works must be a written document. Therefore, be as specific as possible. A written agreement eliminates disputes and problems. A good contract should contain the following terms:

  1.  All the terms that a contractor and the owner agreed on and the extent of the work to be carried out.
  2.  If you want to hire another subcontractor for part of the job or intend to do it yourself, mention it in the contract.
  3.  Write financial terms like total cost, payment date, and (if present) penalties clearly in the contract.
  4.  Oral promises and guarantees such as the start and end date of the project should be written in the contract document.
  5.  Specify material types, for instance, quality, quantity, color, size, weight, and brand name.
  6.  Mention anything important to you, such as complete and adequate cleaning, removing debris and materials, saving lumber for firewood, etc.
  7.  Any change in the plan, alternative materials, change of completion date should be written and signed. The date of project completion might be affected by weather conditions and material availability.
  8.  A good and reputable contractor should be able to front the cost of supplies without a large sum of up-front money from the owner. Commonly, an initial deposit for home improvement should not exceed 10% of the total project cost. However, an initial deposit of 30% is acceptable if work needs special orders and custom-made items. So, do not accept to pay a large deposit upfront.
  9.  A contractor may ask for periodic payments (draw). Mention specifics of draws, and it should be based on work progress, not a date. So, if the work of a contractor gets delayed, your payments would be delayed as well. Do not make 100% payment until the project is completed and all necessary checks are made.

You should keep files of all papers related to the project. Additionally, keep files of all subcontractors working on the project. Keep the record of all subcontractors working on the project. For instance, the work carried out and the length of time on the job. Additionally, record the name of the material supplier and the date and type of materials delivered.

Project files may include:

Permits, Plans, and Specifications

The contract should clearly state that all works should be done per applicable building codes. The building codes set minimum safety standards but do not protect you from poor-quality works.

The contract should also oblige the contractor to apply for necessary permits; otherwise, you may be legally responsible in case of failure to gain essential permits. Do not agree to any verbal changes in the plan which the contractor suggests. Everything should be written and signed.

Signs of Problems

You should be aware of the following signs of problems while hiring a contractor:

  1. The contractor’s name, telephone number, address cannot be verified.
  2. You cannot verify the license of the contractor.
  3. Salesperson coerces you to sign a contract through intimidation, threats, and scare tactics.
  4. The company or salesperson tells you that your house will be used for advertising purposes and hence you will be offered low prices.
  5. The salesperson tells you this is a special price available only if you sign the contract today.
  6. The contractor is reluctant to provide references, or references have reservations about the works that the contractor has conducted.


How to select the right contractor?

1. Look for a licensed contractor
2. Verify license status through the website of the organization responsible for issuing licenses
3. Check references and examine past works of the contractor. Reputable contractors are proud of their previous works
4. Get a minimum of three bids, and choose the best one, not the lowest price
5. Demand a written contract and do not agree to anything, and you understand the terms
7. Restrict the deposit to a maximum of 10% and up to 30% if custom-made items are required
8. Do not accept pressure from salespeople to sign contracts without understanding it
9. Good contractors should listen to your suggestions and follow your demands
10. After checking all your concerns, you may accept and sign the contract

How much money should you give a contractor upfront?

The maximum deposit is 10% of the total project value and up to 30% of the whole project value when custom-made items are ordered.

Is it normal to pay a contractor half upfront?

No, it is not normal. Good contractors should be able to buy materials without asking for large amounts upfront.

How should contractors be paid?

Contractors should receive their payment based on work progress, not a date.

When should a contractor receive 100% payment?

A client should not make 100% payment until the entire project ends and necessary checks are made.

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