All this week, we’re exploring the top 7 tips to successfully choosing a contractor. Read on to learn about our recommendations in making a sound decision!

Tip #1: Follow your gut

More than once, I have found that an inkling about a contractor, supplier or provider has proven to be right. You know that feeling I’m talking about: that twinge in the depth of your stomach that tells you when something is amiss. If the contractor you are selecting checks out, but you still don’t feel “right” about it, don’t do it. Get more bids, do more research, ask for more references. If you’re feeling like something isn’t quite right, you’re probably right!

And, the old adage applies: if it’s too good to be true, it probably is! Follow the tips in this article and your gut to make the best possible choice for your new home or renovation project. You’ll be glad you did!

Tip #2: Get more than one quote!

If you want to be sure you’re choosing the right contractor, be sure to evaluate more than one for your project. Unless you’ve worked with one you like in the past, it is in your best interest to start with a list of 3-5 potential contractors to check out and ultimately narrow down to one.

From meeting these individuals and discussing a few of the key questions outlined in this article, you’ll be able to get a good sense of what the contractor is all about and how you might be able to expect the job to go. Your gut instinct will also guide you in weeding out contractors who are not a good match to you and your proposed project.

This step also helps you to ensure that the quote you receive, while not necessarily the least expensive, is at least in line with a reasonable cost for your project. Be sure to read tip #4 on getting a good value!

Shop around and consider your options. Be a cautious buyer and make sure you’ve evaluated your options before selecting the successful candidate!

Tip #3: Check the records!

So, you know what you want and you’ve talked to a couple of potential contractors. Ready to go? Not quite! Before you hire anyone, you need to verify that they are licensed, bonded and insured to do the work proposed. Sound daunting? It’s actually pretty easy to get this information.

In Oregon, you can ask the Oregon Construction Contractors board to verify this information. It’s readily available online [click here] 24 hours a day, 7 days a week, 365 days a year. You can see the responsible individual for the company, the carriers for their bonding and insurance and the amounts for which the company is covered. It also tells you if they’ve had complaints against them in the past and if they are certified for special jobs such as removal of lead-based paint.

For this information in other states, check with your state’s licensing agency.

Protect your most valuable asset and check the credentials of anyone you’re considering hiring!

Tip #4: Good value is not necessarily cheapest

When planning your project, one of the main concerns anyone has is cost. Deciding on floor plans, choosing architectural features and selecting finishes is such fun and excitement. The obvious follow-up to all this, though, is always the dreaded question…”How much is this going to cost?”

While, in most cases, you want the product for the lowest possible price, construction takes a little different perspective. Let’s say you received bids from three separate contractors to remodel your bathroom. The contractor’s bids varied from $6,200 all the way up to $9,000. At first, if you’re like me, you’d say, go with the contractor with the $6,200 bid. Right? Maybe. Maybe not.

What you have to drill down deeper to determine is what each contractor has actually included in the bid. For example, does the bid include the estimated expense of permits? And, what about change orders? If you decide part way through that the half wall next to the toilet should instead be glass bricks, what will that mean in terms of the bottom line?

You should also look at the craftsmanship you’re getting. A home can be built in a number of ways to create the same end product. What is different are the methods, materials and craftsmanship making up those homes. One contractor might sheath your home in MDO while another might use plywood. Both products will be a suitable choice for the job; however, let’s consider the following scenario.

Let’s say your roof was damaged during a windstorm and created a leak that allowed water in under the tar paper on your roof. The MDO could swell up to twice its original size, losing its structural integrity and causing waves in your roof. Now, you must remove the roofing, replace the MDO and reinstall the tar paper and roofing. With plywood, you could pull up the section of roofing with the problem, ensure that it dried adequately (to avoid trapping the moisture under the tar paper and roofing) and reinstall the roofing.

Service is also key to a good value. Sometimes products fail. For example, a few years ago one of the lines in our air conditioner failed as a result of a manufactures defect. It caused the unit to freeze and, as a result, the conditioner to shut off. Of course, it was a Friday night during the heat of the summer and we had an infant in the house. Yikes! Amazingly, the company who installed the unit made a special trip at 11:00 PM on a Friday night to determine the problem, create a workable solution in the meantime and correct the problem as soon as the parts arrived (overnighted, I might add!). What more could we ask for? Nothing, really.

So, case in point: Choosing the $6,200 contractor may not be the best value in the end. Will you get a high quality product? Will the contractor be dependable to do the job as described? If there is a problem, will they graciously return and fix it, or will you be left holding the bag?

In summary, Value = Price + Quality + Service.

Tip #5: Don’t pay upfront!

Be leery of anyone asking you for a full payment on up front for your project. Be it a general contractor, a landscaper or even a door-to-door peddler, you’re best protected by holding your final payment until the completion of the job.

Now, this isn’t to say that paying a deposit isn’t appropriate. Many businesses, whether they provide a product or a service, will require a down payment or deposit of some kind when dealing with significant monetary amounts (generally, I tend to think of $500 as a benchmark for this purpose).

A contractor usually requires this deposit for two main reasons: One, it demonstrates to the contractor that you have intentions of actually having the work proposed conducted. You can think of this in the same way that real estate offers require an escrow payment or promissory note.

The second main reason for a deposit is often times to assist the contractor in securing the materials he will need for your job. Many of the pricing quoted to you is based on materials pricing that can fluctuate, such as lumber. Contractors usually have price guarantees for a short period of time from suppliers, but in order to lock in your pricing for the proposal, they must commit to the supplier with an order.

So, you ask, how much is a reasonable deposit? I recommend no more than 50% – MAX! Something closer to around 30% deposit would be much more in line with what the contractor would really require in order to get the job started for you.

The contractor may also require payments on the project as completion nears. This is okay. Just be sure not to make the final payment until the job is entirely complete to your satisfaction. If there is a difference of agreement on whether or not the job is complete, you can withhold the final payment until you reach agreement. (As an aside, be sure to make your correspondence in writing regarding your concerns and reasons for this withholding payment!)

And, finally, don’t forget: always get a receipt for your payments!

Tip #6: Get permits!

Dealing with the hoops and hassle of getting building permits can be a drag. However, think of the hassle of dealing with a building project later that went awry because the proper inspections weren’t conducted. By securing permits, you are ensuring that your contractor is doing the job by the books and not taking shortcuts that will cost you later.

For example, just a few weeks ago, we ran across a commercial building that had electrical work completed on it prior to our job. Upon initial inspection, we found numerous code violations, including residential grade wiring. We had a licensed electrician review the property for full disclosure of the problems. Upon further investigation, it was determined that the improvements had been made by an unlicensed individual and that no permits had been obtained.

At this point, the responsibility of correcting the problem lies with the client. He is without recourse and will now be out of pocket the expenses to make the proper adjustments to the facility via a licensed electrician. Had permits been obtained and a licensed electrician hired the first time, this building owner wouldn’t have this problem.

So, if I’ve said it once, I’ve said it a million times – Protect yourself and get permits!

Tip #7: Ask for references

Any reputable contractor will gladly provide you with names of individuals they’ve worked for in the past. Of course, these will be the names of jobs that went well and where the client was happy with the project.

Do a little more homework:

1. Ask for addresses of projects you can go see to inspect the craftsmanship yourself.
2. Speak to the references the contractor provides you with and ask those individuals how they got acquainted with the contractor you’re considering hiring.
3. If these individuals were given the contractor’s name by someone they know and trust, ask for that person’s name and number and give them a call!

Delving deep into the contractor’s history and reputation will give you a clear look at what you can expect. These are the same tactics human resource departments use to inquire about potential candidates for their businesses; do the same! This will be a business exchange between you and the contractor; make sure you know who (and what!) you’re getting!

Tune in all this week to learn what you should be looking for in selecting a high-quality, reputable contractor! Get the tips in your inbox by subscribing to our RSS feed, friending us on Facebook or following us on Twitter!