How To Hire A Contractor and Not Get Screwed

One of the scariest things about doing a renovation is finding the right type of people to do it. Whether you're doing a one room reno or trying to flip an entire house for the first (or twenty-fifth!) time, after hearing so many horror stories about contractors, it's no wonder. There are several things you can do up front to keep from getting screwed. With over 30 full renovations under my belt, I've seen the good, the bad and the UGLY. I've hired, fired, been stolen from, been left with an unfinished home, had a home vandalized a day before going on the market, you name it. Don't hire the duds! DuhFinding a good contractor is not difficult if you're looking for the right signs.  

The Search

First we need some contractors to screen. This isn't the hard part. Ask around.

  • Ask your friend who flips houses! :)
  • Ask a realtor. 
  • If you're in real estate investment, ask a wholesaler. They often have a list of contractors. 
  • Post your request on Facebook. You'll get plenty of responses. 
  • Find one on Angie's List and/or check reviews of ones that have been referred to you.

--If they aren't on Angie's List, this doesn't mean they aren't good.--

You'll probably end up with a nice list to start with just by doing one of these options. Ask the people who referred them what they liked and didn't like about them. Remember, we all have different requirements and things we need or can let slide. We'll go deeper into this later. For now, we've got a number of people to call. 

Requirements

The next step is figuring out your requirements before you interview anyone. Remember, this is an INTERVIEW.

Do not hire a contractor just because someone recommended them.

So many times I have recommended a contractor and the friend or family member hired them on the spot only taking price into consideration. We all have different expectations. Figure out what yours are before they get there. My expectations as a house flipper will be different than a typical homeowner's. I'm not living in the house where the construction will be taking place. This person won't be painting near my bed, so I don't much care if they aren't the cleanest individual. Also, I can deal with someone not being able to get to my fence until 3 weeks from now on a Saturday evening. On the flip side, my cabinets must go in on X date or else the entire project down to the listing date will be affected. I have different requirements depending on the job I'm hiring for. You will have your own requirements. 

There are three criteria you'll consider when hiring the right contractor. You can't have it all. EVER. Always at least one of these three components will be sacrificed. ALWAYS. They are...

Price, Quality & Time

We all want great prices, great quality and speedy service, but sorry - you can't have it all. For instance, if you want the job done as cheaply as possible, no doubt you'll find someone that is wiling to do it for nuthin'.  But, not paying much will get you a contractor who squeezes you in when they can every other week for 4 months. Something must give, and in this case, it's time.  If you want to have the job done yesterday, you'll either pay more OR receive lesser quality as they try to satisfy the time expectation. 

quality, time and price forumulas

You'll have to decide what is important to you, as well as consider that of the person who recommended the contractor in the first place. You may not be on the same wavelength. If your coworker is referring their brother-in-law who has a full time job and does this as a side gig, expect time to be the first thing you'll be sacrificing. Great pricing might be in your favor, however. Which part of the equation are you willing to lower you expectations?

Meeting

So, now you're going to meet them. You'll want to evaluate them on a few key points.

  1. Availability
  2. Qualifications
  3. Interest In the Job
  4. Price
  5. Money Up Front
  6. Contract
  7. Expectations

So, now you've called some candidates and are waiting to hear back. If they don't call you back immediately, don't write them off just yet. The good contractors will be busy...WORKING. High demand individuals are usually excellent at any of the three job factors we previously discussed. If they don't call you back in a timely manner however, don't waste your time. Take this as a sign that they are too busy or disorganized and move on.

When you do get them on the phone, check their availability. Why waste anyone's time if they can't fit you in. Remember, contractors will be working at break neck speed during high times, like the summer in many areas. The good ones will only take on what they can actually do and do well. The bad ones will say they can take on anything ("Oh yeah sure! No problem!") and then....you guessed it. You're screwed. Pretty soon you have one guy showing up a couple times a week to satisfy you enough to not fire them. On the flip side, if time is not one of your priorities, then you may choose to deal with a delay. Or, perhaps you are willing to wait until the winter when their schedule dies down. Check your options.

Qualifications

Ask for their license information if it is required for the job. In Ohio, it is not necessary to have a general contracting license. Specific trades are a different story. The requirements are different in each state. Secondly, ask for a copy of their insurance and workman's comp. They should be able to provide these pretty easily. If not, you decide if it is worth the risk. 

Interest in the job

Now that you've deemed they can fit you into their schedule and they are qualified to do the job, invite them over to take a look. During your interview, you'll want to assess a few things. The balances of their Yes's and No's to your requests. Too much of either is a red flag, in my opinion (anyone watching Good Wife?). 

Let's say you're doing a kitchen remodel and you're listing all of the changes you want to make. If the contractor continues to say, "Oh no you don't want to do that." or "You sure about that?", don't hire that downer. Do they see a problem that is justified or do they just not like your idea? Don't get me wrong, you should listen to their reasons why something won't work. Perhaps they'll have a good reason. But, too many negative remarks is a bad way to start a job. I've stopped in middle of an interview and said, "Listen, I've been doing this a long time and I know what I can do and I know what I want." In my head I was thinking, "Peace out." You don't want to be treated like a doormat. 

Girl boss.

(Or boy boss.)

Either way. You da boss.

On the flip side, you don't want a contractor who YES's everything saying, "Sure! I can do anything! Weeee!" That's the sound of money pouring out of your pocket. They should be looking out for the integrity of the home. So, if taking a wall out is a bad idea structurally, they should be pointing that out. A good balance of enthusiasm and warnings makes for a good contractor.

Price

At this point, you've met with a few contractors and you have some estimates. You're ready to choose. Odds are there is one you are drawn to just because of their demeanor. Maybe they were a good listener, had great ideas and you just got a good vibe. If their price isn't exactly what you had in mind don't count them out just yet. Contractors will almost always negotiate their price. Let's hope they gave you a detailed estimate. If not, ask for one. If they will not provide you a breakdown of costs, do not hire them. You have right to know what you are paying for.

Go through each item and decide whether or not you are willing to pay what they are asking. Google "labor costs tile floor install" and check it against industry and location standards. Talk with them about how they came up with that number and if they can come down a little. Be fair. Remember, this is how they make a living. 

If the cost is still way off, consider changing the scope of the project. Maybe it's you, not them. Maybe you're expecting too much. Maybe you can use a different material that is easier and more quickly installed. Maybe you can paint your cabinets instead of purchase new ones. During your initial interview, ask for cost projections for different scenarios such as laying new hardwood flooring vs. refinishing the old.

Money Up Front

This is the scariest part! You like a certain contractor, but they want some money up front. This is not uncommon, but I'd still shy away from it. They will need to purchase some materials for your job. This is the truth. But, will they? Who knows. There are two ways to go about protecting yourself.

  1. Have the contractor put a material order together at the supply house, then you pay for it yourself. Purchase all of the materials and have them delivered to your house. Clear some space in your garage or rent a storage container for a month. 
  2. Purchase just the finish materials such as cabinets, vanity, mirrors, faucets, etc and have them delivered to your home (more help with this to come in a future post). Have your contractor pick up the building materials needed for the project. This should greatly reduce the cost they will incur. Reimburse them for the materials after they have brought them to the project. Promise to pay them at the end of each week, and do so. Any decent contractor should be able to foot the bill for a few hundred dollars in materials. Don't expect them to have to pay for too much, though. Most contractors are not rich, although their nice truck might fool you into thinking otherwise. Be fair. 

If the materials are taken care of, then what do they need to be paid for upfront? NOTHING. If they haven't done anything yet, then they SHOULD NOT GET PAID. Labor SHOULD NOT be paid up front. If they claim it should be, then this is a huge warning. It's likely they are trying to pay this week's payroll on another job with your money. Sadly, they're in the hole and trying to make up for it. This will only snowball and turn ugly very, very soon.

Contract 

Sign a contract! Signing a contract is not just for legal reasons. It also explains the expectation for the job. So much goes into a remodel that it is easy for a contractor to forget that you decided to put a fan in the master bedroom instead of just a light. "Install fixture" is not good enough. A good contract has a detailed scope of work and spells out everything that will be done. Make sure it is specific so there is no discrepancy. Spend time with this so mistakes are minimal. Getting a contractor to come back and fix things is incredibly frustrating and time consuming. 

If any changes are made during the renovation, put them in writing. You may discover some plumbing had to be fixed unexpectedly and were not told how much it cost until the final bill shows up. Surprise bills at the end are an easy way to go over budget.  You as the homeowner should know how much you are going to spend beforehand so you can accept a fair price.  Get all changes in writing before the work begins.  Plus if you are worried about them padding the numbers, an undocumented change would be a good place for them to hide it.

Expectations

We've already touched on this in the contract, but let's take it a bit further. We don't want to insult the contractor, but we need to let them know our expectations. They work hard and are proud of their work. That's not to say their crew is, though. Sometimes corners are cut, whether it is known by the general contractor or not. If you are a neat freak about straight grout lines or you're especially worried about the hinges on your doors being painted (this happens), let them know. I typically start this conversation out like so, "I'm really worried about a few things because I've seen it done before and I want to make sure we're on the same page. I don't want the hinges or doorknobs painted." They might give you a look like, "WTF? Who would paint those things?" to which I say, "I know, I know. You probably wouldn't do that, but I needed to say it just in case." Remember, you are the boss. Get what you are paying for. Fixing things after mistakes have been made is infuriating for both parties. 

Ready, Go.

Start asking around for some referrals. You don't need to be ready to tear your place apart tomorrow or even a few weeks from now. Give yourself some time to find the right candidate for the job. Give yourself the time to make a decision, as well as find a good time slot for your contractor to schedule you in. 

Ok, so that's it. You're ready. You've got this. 

Do the dang thing.