If the idea of interviewing contractors makes you think that shiny new doorknobs and flowers in the yard is all the fix-up your investment property really needs, stop worrying; the process of landing your ideal home renovation contractor just got easier. Take it step by step and that process will go smoothly.
- Your first step is to list what you’d like to have done, and prioritize. This will help you make choices when the numbers get real. Then start asking for referrals. Do not assume that the contractor who did the gorgeous job on your neighbor’s deck is the ideal contractor for your project. It’s possible your neighbor’s bald patch came not with age, but from tearing his hair out. Plan to have real conversations that go over your list with at least three licensed contractors until you’ve found the perfect person for your project. This will ensure a sense of well being as you entrust this person with major renovations or simple replacements.
- Before any conversation gets under way, ask if the general contractor is both licensed and insured. These are table stakes without workarounds. If this cannot be proven, walk away. Some contractors are one, but not the other.
- Perform due diligence. Check their history of litigation, or complaints about their services. Utilize the Better Business Bureau, contractor state license boards, as well as Angie’s List. Even ask around the hardware stores to see if they’re familiar with this contractor. They may know who has the most stellar of reputations. And don’t be afraid to ask the contractor for their references, and then personally speak with them.
- As you move into point-by-point conversations regarding why you need to hire them, be realistic. Of course you’re on a tight schedule and budget; you know that and so do the contractors. But the contractor who is available to start immediately may not be the contractor you want to work with. Do you walk into the restaurant that no one else is dining in – or move along to the one with the crowd? There’s a reason a contractor is busy, and it may work to your advantage. The busy one may be the best one.
- Don’t assume that the busiest contractor is the cheapest, or the most expensive. That contractor may be the fairest. The busy contractor may know exactly how to budget a job so that he and his laborers can make an honest wage without sending a homeowner’s budget into the cosmos. When you get quotes from any general contractor, understand that an element of guesswork goes in. Don’t expect a professional contractor to issue quotes for labor only. Requesting this may repel the better contractors.
- Budgets can and should be detailed. The project should be broken out, with general figures attached, and an estimated end date. State that money will be deducted from the agreed price each day that work continues beyond the determined date of completion. This could be, for example, $50/day, or $100/day. Keep it fair, but keep it firm. And include this in your written contract.
- Once your prices are set, keep your contractor motivated by not paying them too much too early. You want to ensure they’ll finish, and do an excellent job. 10 percent of the job total is recommended as the cap to pay before the job begins. An exception to this would be when more expensive materials are being used, in which case 30 percent up front is reasonable.
- Since some changes are inevitable, include a change order clause in your contract. If you change your mind about an element as you see it being executed, placement of a lighting fixture or the style of door, for example, have an added cost that is agreed upon in advance by both you and the contractor.
- While the work progresses, check in with your contractor regularly. The person whom you have selected to work with should be a proactive and clear communicator. Note this from initial contact and be proactive yourself on keeping the lines of communication open. Surprises and misunderstandings will be minimized if you stay in touch.
Whether you are renovating for fix and flip*, or sprucing up your family’s long-time home, the end outcome is designed to be positive. Keep this in mind and lay the groundwork to ensure it will be.