Hire contractors who are licensed and insured.
Check for qualifications. ?Texas does not require general contractors to be licensed or bonded, but they are required to be a state-registered business. Check with your local building department or consumer protection agency to find out about additional licensing requirements in your area. If your locality has licensing laws, make sure the contractor’s license is current. Ask the contractor for proof of insurance.
Get contractor recommendations from people you know and trust.
Find out how long they’ve been in business. Look for an established company and look into their record and reputation.
Check with the local Home Builders Association and consumer protection officials to see if they have complaints against a contractor.
You also can search online for the company’s name with words like “scam,” “review,” or “complaint.” Check online rating websites you trust to see what others say about the contractor.
Get multiple estimates.
A written estimate should include a description of the work to be done, materials, completion date, and the price.
Don’t automatically choose the lowest bidder. Ask for an explanation if there’s a big difference among the estimates. Most of the legitimate bids should fall into a fairly close range. Beware of the "low-ball" bidder whose price is much lower than everyone else's.
Question the quality of the materials that will be used and the work that will be done. A very low bidder may not plan to include all the specific tasks you might expect, and may use inexperienced labor, or second-rate materials.
Read the contract carefully.
Ask for a written agreement. Most home repair and remodeling work is performed under contract. Legitimate businesses will usually insist on having a contract for their own protection, and a well written contract should protect the homeowner, too.
Carefully read and understand every word of the contract before you sign.
Take your time and do not allow anyone to rush you into signing a contract. The sales person should be willing to leave the contract with you so you can read it carefully. If anyone rushes you or tries to make you sign on the spot, or will not leave a copy for you to study, you should be suspicious of that person and the contract.
Make sure all blank spaces in the contract are filled in.
Get and keep copies of everything you sign at the time you sign it.
Before you sign a contract, make sure it includes the following:
- The contractor’s name, address, phone, and license number (if applicable)
- An estimated start and completion date
- Any promises made during conversations or calls related to issues such as the scope of work and the cost of labor, special orders, and materials
- A written statement of your right to cancel the contract within three business days, if you signed it in your home or at a location other than the seller’s permanent place of business
- The payment schedule for the contractor, subcontractors, and suppliers
- The contractor’s obligation to get all necessary permits
- How change orders are handled. A change order is a written authorization to the contractor to make a change or addition to the work described in the original contract, and could affect the project’s cost and schedule.
- A detailed list of all materials including each product’s color, model, size, and brand. If some materials will be chosen later, the contract should say who’s responsible for choosing each item and how much money is budgeted for it (this is also known as the “allowance”).
- Information about warranties covering materials and workmanship, with names and addresses of who is honoring them — the contractor, distributor, or manufacturer. The length of the warranty period and any limitations also should be spelled out.
- What the contractor will and won’t do. For example, is site clean-up and trash hauling included in the price? Ask for a "broom clause" that makes the contractor responsible for all clean-up work, including spills and stains.
Keep all paperwork related to your project in one place. This includes:
- Copies of the contract
- Change orders
- Any correspondence with your home improvement professionals
- A record of?all?payments
- Keep a log of all phone calls, conversations, and activities.
You also might want to take photographs as the job progresses. These records are especially important if you have problems with your project — during or after construction.
Use a Sign-Off Checklist. Before you sign off and make the final payment, be sure that:
- All work meets the standards spelled out in the contract
- You have written warranties for materials and workmanship
- You have proof that all subcontractors and suppliers have been paid
- The job site has been cleaned up and cleared of excess materials, tools, and equipment
- You have inspected and approved the completed work
Don’t pay cash.
If the job is expensive enough that you will need to finance it, be sure to shop around for the best terms on the financing. This is separate from taking bids on the cost of the work. When choosing your source of financing, consider the rate of interest, finance charges and the terms of the pay-out. As with any financing agreement, you should calculate the entire cost of interest and charges over the term of the loan.
A home improvement company may offer financing, but this is not necessarily the best option, even though it may seem easy to arrange the financing and the work contract at the same time. Be aware that some contractors will have you sign a credit contract to pay a certain price for the work plus a finance charge, then immediately sell the right to collect on the contract for 20-50% less than the contract price. That usually means you could have gotten the work done for 20-50% less by paying cash or arranging financing yourself.
If you are asked to sign a credit check application, read the form carefully and make sure it does not bind you to anything. Make sure it really is a credit check and not a contract. If you do not understand everything in the document, do not sign it until you have had someone else explain it to you.
Don’t pay the full amount for the project up front.
Set up the contract so that you only pay for work that has been completed.
