12 biggest mistakes when hiring a contractor

Many homeowners wanting to increase the value of their home are interested in the safest, cost-effective, professional approach. Hiring the right general contractor also means trusting their team. Statistics lend to bad horror stories of deception and their repair money gone without a completed project when hiring a contractor to make improvements. These are the top mistakes that are commonly made when hiring a general contractor:

1. Are they legitimate?  Do they have a web site and email account? Is the company on LinkIn ? Look for them on Facebook. Thankfully bad people have a hard time hiding from social media in todays world. You’ll want to know what kind of person is in your home. Are they honest? Do they have integrity? Sometime throughout the repair process they will probably be in your home alone. You’ll want to work with people of good character to avoid trouble. There are tons of stories of contractors showing up drunk, or high, or smoking in your home while your away.

 2. Hiring the lowest bidder - Imagine choosing the cheapest surgeon to do a triple bypass. It’s possible you’ll get what you pay for. Go for a contractor that has a realistic bid. And if he can instantly start on your project, there is probably a reason that he has no other work. An amateur repairman can cost you thousands of dollars in making mistakes. Sometimes it takes a real smart cookie to overcome obstacles when things don’t go as planned.

3. Managing the costs. Many homeowners believe that a stated hourly rate is going to be a better deal than a fixed cost. The best proof of this: the state of California says time and material contracts are against the law, because they are the most litigated situations. You will usually come out better with a stated fixed cost because if the job takes longer than expected it will cost the contractor not the homeowner.

4. Not getting a written contract - While some contractors may balk at this, a written contract that is dated and signed by both parties is essential for details such as the payment schedule, the general plans, and completion date. What is their guarantee?

5. Do not pay upfront - 10% is a standard down payment; many times a large down payment indicates that a company is unstable financially. 50% payment after half the work is done is except-able. But don’t pay the rest until the job is completed. 

6. Callback turnaround - If you don’t hear back within 48 hours, forget them. You want someone who is responsive. If they don’t return a call promptly now, you can pretty much assume they’ll behave the same way when you’re mid-demolition, or if issues arise. Not a pretty picture.

7. How close are they? Look for contractors that are close to your job site. The closer they are, the more likely they will be there each day — and on time. If they cant be on-time to your first appointment or giving an estimate. Forget them.

8. Experience counts. Interview only contractors who have been in business at least five years — and under one name. Ask what is their specialty. For example, if Joe’s Contracting Service had problems, it may resurface a year later as Joe’s AAA Contracting Service. That’s a major red flag you don’t want to deal with.

9. Ask for references (and call them). Not old ones. If the reference is 3 years old there might be a reason. Ask for references of their last 3 jobs.

10.Insurance - Ask about general liability insurance from each prospective contractor. Then call the insurance companies to make sure coverage is current.

11. If the city permits - Go to the city building department and see if there are any complaints against your prospective contractor. It’s an extra piece of legwork for you, but you’ll sleep soundly at night knowing the person working on your home sweet home is the best in the biz.

12. Is “sub out” in their vocabulary? Which jobs does your contractor “sub out”? Do they hire a subcontractor for the plumbing or electrical? How is going to do the work and what does the “in-house” crew do? If they’re subbing out all the big jobs, it’s probable costing you more to pay for sub-contracting commissions.