The DuPree Team know if you’re planning or even just considering your next home renovation project, a few details probably come to mind: Your budget, your timeline and the contracting team who can make it happen. Finding the right person for the job is not easy and should not be taken lightly. It requires research and planning, it can be overwhelming, intimidating or just plain frustrating. The guide below will help to take the guesswork out of finding and hiring a contractor that will make your home renovation dreams come true!
Finding Good Contractors
The first question you need to ask yourself is what type of project needs to be done. If it is a small, specific project, such as cabinetry, your best bet would be with a contractor who specializes in what you need done. If it is a medium-sized project and doesn’t include any structural changes to your home, you probably just need a general contractor. If it is a substantially large project, you will need either an architect who can approve structural changes or a designer who specializes in doing what a contractor and an architect do.
Ask friend, family or colleagues to see if anyone you know and trust has any personal recommendations for contractors that they’ve used. Searching on the Internet is another way to find a contractor if you cannot get any personal recommendations. Be sure to check if the contractors you are interested in have professional, up-to-date websites and if they have any ratings or reviews of them on the web. There are several app available on your smart phone such as Angie’s List or Thumbtack which can also be a good source for potential contractors.
Phone Interviews
There’s no specific number of contractors that you should call, but there are plenty of horror stories of bad contractors so make sure you interview contractors until you have found 3-4 that you feel comfortable inviting to your home to quote the job.
When interviewing the contractors, focus on the way they speak to you and their specific answers to your questions.
- Do they answer the phone professionally?
- Do they speak to you with respect?
- Do they seem interested in and excited by your project?
- Do they answer your questions directly or do they give you the run-around?
Have a list of questions ready with a pen and paper to write down their responses and any notes about your discussion.
Here are a few important questions you should make sure to ask:
- Are they licensed? Some states require licensing, and some don’t.
- Do they have insurance and if so, what kinds of coverage do they have?
- Have they completed similar jobs to yours before? Be sure to have an outline of your project detailed out.
- Do they have a list of references you can contact? A good contractor should have plenty of satisfied customers as well as satisfied suppliers and subcontractors that you can call.
- When will they be able to start the job? A good contractor is also very busy, and you want to be sure they can fit you into their schedule when you need the project to be completed.
- Will they provide you with a detailed contract once you have both agreed to the terms of the project?
When you’ve finished calling all of the contractors on your list, select 3-4 that spoke with you professionally and respectfully, provided satisfying answers to all of your questions, and seemed excited to work with you. Call the contractors on it to request an in-person meeting to speak about the project further.
Meeting the Contractors
Here are some great questions to ask during the meeting.
- How long has their company been in business?
- What is their permanent business address? Don’t be alarmed if this is a residential address; a good number of contractors do work from home.
- Are they licensed to work in your area? How long have they been licensed?
- Are they insured? What kinds of insurance do they have? Can they provide proof of insurance?
- Will your project require permits?
- How many projects like yours have they completed in the past year?
- Can they provide you with a quote and any reasoning for price? Be sure the contractors you meet with give you similar quotes for pricing. If one gives you a quote that is much lower, this is most likely a scam.
- What do their payment schedules typically look like and are they willing to be flexible?
- Are they willing to show you a project they are currently working on?
When you’ve finished meeting with all of your selected contractors, review your notes and before you make your final decision, look up the company on the Better Business Bureau website to check for consumer complaints. Sometimes good contractors receive complaints, if your top choice has one, call them and ask how they resolved their customer’s issue. Was the complaint resolved quickly and professionally? Did the contractor finish the project with a satisfied customer?
Negotiating Terms
Once you have decided on a contractor, the next step is to negotiate price and payment terms.
There are two basic options for payment, each with their own pros and cons:
- Cost plus flat fee: The contractor will charge an agreed upon management and coordination fee (usually 13%-20%) plus actual cost of the project. The contract will lay out the estimated costs at each stage. This should closely match the total actual cost unless there are unforeseen circumstances, and it should be stated in your contract that your contractor will provide you with all receipts and accounting at regular intervals. This option allows for tons of flexibility, but it is much more difficult to estimate the final cost.
- Bid basis: You and your contractor draw up a budget for the entire project and agree upon a payment schedule, all of which will be in your contract. If you have a budget, this is the more attractive option.
Every contractor is different and will have different expectations for the price of the down payment. Some states have laws limiting the amount of money the contractor can request for down payment as well as limits for final payment beyond the agreed upon amount, so do some research for your particular state. It is a good idea to make your payments contingent upon timely and quality completion of specific milestones according to the terms of your contract. This way, if there’s a hold-up, you do not have to pay until the particular service has been rendered.
A few things to remember about payment method:
- Never pay in cash. If your contractor is requesting that you pay in cash, it is probably a scam.
- Smaller projects can be paid with a check or credit card. Paying with a credit card is recommended because you have more legal recourse options if things go bad.
- Larger projects can be financed. If you choose this option, be certain that your contract states that the contract is void unless and until financing is approved and obtained.
The Contract
It’s important that you cover every detail when drawing up a contract with your contractor. If something goes wrong during the course of the project and you have to seek legal action, your contract will be key to proving your case.
These are the things your contract should lay out in detail:
- Contact information of your contractor such as name, physical address (you cannot serve a subpoena without a physical address), phone number, insurance company, and account and license numbers.
- The project’s start date and end date, or its start date and the length of time until completion.
- Your payment and/or financing plan.
- A detailed schedule of the stages of the project including any electrical, plumbing and carpentry components.
- A detailed list of all required materials, who will choose them and who will purchase and/or deliver them.
- A guarantee that the contractor will file for all necessary permits.
- Potential time conflicts from other projects the contractor may be working on.
- Change order approval expectations. Sometimes unforeseen circumstances crop up and this may change the project schedule and cost. Change orders lay out what additional work may be done, what it will cost, and how it will affect the date of completion.
- All the names of the workers that will be on site and the start and end time of their work day.
- Names of companies your contractor will subcontract from.
- Names of suppliers.
- All information about warranties and who will be covering them.
- A “broom clause” that holds the contractor responsible for all clean-up including unforeseen messes.
- A termination clause. A good termination clause needs to include detailed information as to what factors can play a role in ceasing the project altogether, and any costs or consequences of termination for the homeowner or contractor.
During and After Your Project
During the project you should keep detailed records and accounts to make sure that reality is unfolding according the contract you both agreed on. Take plenty of photographs of the work in case you need evidence of wrongdoing or contract unfulfillment. Keep physical copies of the contract and of all change orders that happen in the course of your project. Write down any verbal correspondence you have with your contractor wherein you may have agreed upon things that weren’t laid out in the contract. Maintain an organized folder of all physical copies of payment receipts.
You will want to draw up a checklist as your project draws to a close. Before you give your contractor your final payment and sign on the dotted line for completion according to contract, your checklist will ensure that all of the details are taken care of.
Some items to put on your checklist:
- Every aspect of the work has been completed according to your contract’s standards.
- You have physical copies of all warranties.
- You have proof that everyone who worked on the project was paid. To avoid this, you can require every contractor, subcontractor, and supplier who worked on your project to sign a lien release or lien waiver.
- The job site has been completely cleaned.
- You have inspected and approved the work.
Problem Resolution
If you haven’t gotten through your project without any major issues, first try to resolve them with the contractor. Often you can resolve it at this level with some well-intentioned communication. Follow up any phone or in-person conversations with a certified letter and request a return receipt for proof that the company received your communication. Keep this with the rest of your files.
If direct communication fails, you can request assistance from other agencies:
- Your state attorney or local consumer protection office.
- Your state’s business and licensing office.
- Alternative dispute resolution programs.
- Contact the Better Business Bureau.
- Your local media, as a last resort.
The DuPree Team hopes that you and your family have a successful year and are so happy to have you as part of our real estate family. We hope that you found this information useful and look forward to providing you with curated and informative email blogs on a monthly basis. If there is any topic you think we should cover, please let us know! Please keep us in mind the next time you or anyone you know is looking to buy or sell in South Florida.
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