More and more homeowners are deciding to remodel and renovate their homes
rather than move. Whether you are planning to add a small powder
room or a large master bedroom with a fireplace and vaulted ceilings,
selecting a reliable home improvement contractor is an important step
towards realizing a successful project. Before you sign a contract
or make any payments, review these simple pointers. They will give
you a good idea of what to expect from your building contractor and the
home improvement process.
An advertisement in the "home improvement" section of the Yellow
Pages does not ensure that a contractor is licensed and reputable.
Anyone can advertise in the Yellow Pages, and a Yellow Pages ad does not
indicate a contractor's reliability or the quality of his work.
It is best to get recommendations from friends, neighbors, or co-workers
who have had remodeling work done. Licensed contractors
often list their license number in their advertisements. Check out
the contractor with the Better Business Bureau as well as state and local
consumer protection officials. They can tell you if there are
unresolved consumer complaints on file. Of course, no record of
complaints against a particular remodeling contractor doesn't necessarily
mean that the contractor is reliable. Unreported problems may
exist, or the contractor may be doing business under several names.
Most, but not all, states require home improvement contractors to
be licensed. Check with your state licensing agency or consumer
protection officials to find out about licensing requirements in your
Your state licensing agency can verify that the contractor you're
considering has the appropriate licenses, if required, and that they're
current. You also can check with local building inspectors.
Contractors should carry personal liability, worker's compensation,
and property damage insurance. Avoid doing business with
contractors who don't carry appropriate insurance coverage.
Otherwise, you could be held liable for any injuries and damages that
occur during the project.
Comparison shopping should be based on each contractor's reputation,
price, reliability, and experience. These factors are crucial to a
quality home improvement project. Price alone is not an indication
of a remodeler's competence or ability to complete your project.
When comparing estimates, make sure each estimate is based on the
same set of plans and specifications as well as the same scope of
work. If your remodeler suggests alternatives, request that they
be presented as options.
You should expect to pay for a written project cost estimate.
Most remodelers will charge for the time they spend preparing a detailed
written estimate. The cost of the estimate will vary, depending on
the complexity and scope of the project.
A well-written contract should include the contractor's name,
address, phone number, and license number, if required. It should
specify an estimated start date and completion date, the cancellation
policy, and how change orders will be handled. The contract should
include the payment schedule for the contractor, subcontractors, and
suppliers. It should describe the work to be performed as well as
any notable exclusions.
A change order is a written agreement to change the work described
in the original contract. It could affect the project's cost and
schedule. Remodelers often require payment for change orders before
the modified work tasks begin.
In many circumstances, oral contracts are as enforceable as written
agreements. So it is prudent to get verbal agreements added to
your written contract.
If you sign the contract in your home or at a location that is not
the seller's permanent place of business, you have three business days
to cancel the deal. The Federal Trade Commission's
Cooling-Off Rule gives you three days to cancel the
You should expect to make payments when you sign the contract,
when you get a regular invoice (weekly, monthly, or at specified
milestones), when you sign a change order, and when you order a
Avoid making the final payment or signing an affidavit of final
release until you are satisfied with the work and have proof that
subcontractors and suppliers have been paid. Lien laws in your
state may allow unpaid subcontractors and suppliers to "attach" your
home through a "mechanic's lien." This means that subcontractors
and suppliers could file lawsuits to force you to sell your home to
satisfy their unpaid bills from your project. Protect yourself
by asking the contractor, and every subcontractor and supplier, for a
lien release or lien waiver.
If you get a loan for your home improvement project, you should have
the lender make the check out to you rather than to the contractor.
Otherwise, you lose control of the funds.
If you use your home as security for a home improvement loan, and you
don't repay the loan as agreed, you could lose your home. The
lender can take your home and sell it, using the proceeds to pay off
the loan and any foreclosure costs.
This article is adapted from a 15-question quiz entitled "Test Your Skills at
Hiring a Home Improvement Contractor," which was, until recently, located
on the FTC.gov website.