Feature Articles - Housing
Hiring a reputable contractor
Adapted from articles written by Kandace Fisher, MS, Housing & Environmental Design Specialist, & Lisa Hamilton-Hill, former Graduate Student, University of Missouri Extension
With homeownership comes the inevitable — repairs will need to be made. Although most contractors are trustworthy and fair, home repairs remain one of the most common types of consumer complaints. Hiring a contractor to do those repairs can sometimes be confusing and overwhelming, but if you prepare an action plan in advance, the process of hiring a contractor can be smooth and without surprises.
The following guidelines will help you find a reputable contractor who will perform repairs in a timely manner and for a fair price.
- Decide exactly what you want done.
- This will help you communicate to the contractor so he or she can prepare a realistic estimate of the time and costs involved to make the repairs.
- If you need more information before gathering estimates, consult your library or local hardware store with questions.
- Ask friends and neighbors for recommendations.
- If you know someone who has had a recent repair similar to the repair needed in your home, ask what their experience was like. Did the contractor finish the job within a specified time? Was the job on budget according to the contractor’s estimate?
- Don’t be afraid to ask the contractor for references. If contractors are reputable, they will provide references from past customers.
- Get at least three estimates.
- While this is always recommended for large jobs, you might consider doing the same for smaller projects. How do you determine when to get an estimate? Consider how big a financial risk you are willing to take. For some people that might be $500 or more but for others it might be less.
- Read the estimates carefully — the lowest estimate is not always the best estimate. The lowest bid may not include all labor and materials necessary to complete the job correctly.
- Also consider how well you communicate with the contractor.
- Beware of contractors who pressure you to sign a contract.
- Make sure the estimate is detailed.
- What work will be performed? What materials or equipment are needed, and how much will they cost? By what date will the contractor begin and complete the work? Is a building permit required? When will payments from you be made? Will the contractor be responsible to clean up, remove debris and protect landscaping?
- Get all this information in writing. If there are conflicts later on during the project, you can point to the written estimate as your source for resolving those conflicts with the contractor. Verbal estimates or promises are difficult and may even be impossible to enforce.
- If you are unsure about the wording, have someone with legal knowledge review the contract before signing.
- Check out the contractor’s credentials.
- Does the contractor have a permanent business address? Be wary of contractors who give you a business card with only a cell phone number. How long has he or she been in business? Is the contractor licensed in the city or county where you live? If he or she is a member of the Better Business Bureau, have there been complaints? If so, were they resolved satisfactorily? Have you seen previous work and talked to previous customers of the contractor?
- Did you seek out this contractor, or did he or she knock on your door or phone you with an offer to do repairs? Be wary of contractors who seek you out. Although some legitimate businesses seek customers this way, this is a common signal of a fraudulent contractor.
- Make sure any contractor you hire has both general liability insurance and workers’ compensation insurance. General liability insures the contractor for damage to your property due to faulty workmanship and injuries to persons as a result of the contractor’s operations or negligence. Workers’ compensation provides the contractor’s employees with medical and disability insurance for on-the-job injuries.
- Set a payment schedule.
- Beware of contractors asking for the entire payment upfront. Never give a contractor full payment for a job before starting.
- Some contractors ask for advance partial payment (usually one-third of the total bid) to purchase materials for the job. Do not pay the rest until the job is completed to your satisfaction.
- When working out the initial contract, be sure to set a clear timetable of when and in what amounts payments will be made to the contractor. For example, you might pay one-third of the total when the job begins, one-third halfway through the project, and the final one-third upon the project’s completion.
- Get a lien waiver.
- A lien waiver states that a contractor has received payment from you and waives any rights to your property in the event that the contractor does not pay sub-contractors or materials suppliers. Lien waivers protect you against having to pay for the job twice, or from having to pay more than your contract amount for the job. In Missouri, sub-contractors and materials suppliers can put a lien on your home if your contractor has not paid them.
- Discuss the need for a lien waiver when you get estimates. Get the lien waiver signed upon your first payment on the project. Most Missouri attorneys and banks can provide a sample of a proper lien waiver.
If you’ve been the victim of a scam, contact:
- The contractor’s trade association
- Missouri Attorney General’s Office, 1-800-392-8222
- Your local Better Business Bureau
HomeWorks: Maintaining Your Housing Investment. University of Missouri Extension.
Last update: Monday, January 23, 2012