Just because someone can remodel a home doesn’t mean they can run a business. Attractive pictures of previously completed projects are great, but it’s also important to look into the stability and longevity of a contractor’s business. Find out how long the contractor has been in business and make sure they offer a physical business address. For smaller contractors, it is not unusual for this to be their home address, but steer clear of contractors only willing to offer a phone number or PO Box mailing address.
Also, be wary of working with contractors who show early signs of being unprofessional, such as being late for appointments or pressuring you to sign a contract immediately or pay more than a 33% deposit upfront. (If a contractor doesn’t treat his prospective customers well while competing for their business, it is unlikely he will treat them better once he has been paid!) It can also be helpful to ask how many projects the contractor typically has in active construction at once. A contractor who is stretched too thin may have difficulty adhering to agreed upon timelines for completion or making sure your project gets the attention it deserves.
Cast a wide net. Seek a minimum of three competing bids and compare them, line by line. Notice that one includes a charge for a particular material or service, but another does not? Ask for clarification on why. It’s important to make sure that at the end of your bidding process, you feel confident in the investment you are making in your home and go with the best value, not just the lowest price.
Know what you’re getting and make sure it’s in writing. Get a detailed scope of work and, if it contains anything that seems unclear to you, get clarification. Once you are comfortable with the scope of work, make sure you also thoroughly read the construction contract before signing. A standard construction contract should clearly spell out:
- Responsibilities of both the contractor and the homeowner. (Typically, the contractor will be required to provide materials, tools, labor and expertise, while the homeowner must provide payment and access to the home and its utilities, like electricity or water).
- Payment terms.
- A timeline for completion.
- Local authorization. (In other words, it should specify that your contractor is responsible for securing the necessary building permits from local authorities and that this is included in the price of the project).
- Detail on costs of labor and materials, as well as subcontractors to be used, if applicable.
- Insurance and licensure requirements of the contractor.
- A termination clause that states the circumstances under which either the homeowner or contractor can terminate the contract without financial penalty.
Additionally, it is in the best interest of the homeowner to discuss adding additional protections to the contract, like penalties if the contractor does not adhere to the timeline for completion or a lien release, so the homeowner will not be liable in the event the contractor fails to pay any subcontractors involved with the project. Make sure not to agree to payment terms that ask for more than a 33% deposit or do not allow the homeowner to withhold some of the payment until completion. And, when in doubt, have your legal representation review any contract before signing.
Next week: Part 3 – Tailoring the Job to Your Needs
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