Yes, You Can Hire A Reputable, Budget-Friendly Contractor – Here’s How

If you chose to have plastic surgery, you would thoroughly research surgeons, talk to prior patients, or at least review before and after photos of patients’ noses or chins before deciding on a surgeon.

So why wouldn’t you use the same due diligence when choosing a contractor to renovate, remodel or otherwise perform surgery on your house, asks interior designer Tyler Wisler, who appeared on HGTV’s “Design Star.”

“I don’t think people realize how much work is involved in renovations,” says Wisler, whose father is a professional contractor. “I’m as guilty as anyone of [perpetrating] that myth. On “Design Star” we show a [complex home] problem that is fixed in 22 minutes. It’s not that easy.”

It’s a rare home improvement job that doesn’t have its share of hiccups– rotted floorboards, faulty wiring, leaky pipes – that invariably surprise the contractors and owners. And that’s why it’s imperative you invest the time for due diligence before agreeing to work with a contractor.

A contractor’s track record will likely also influence their bid. When you consider estimates, remember that a general rule of thumb for contractors to price a job at 1.5 times cost. That means if work and supplies cost $10,000, the contractor will likely give you a cost estimate of $15,000, report many construction experts including Construction Programs and Results. That extra money is not pure profit. Contractors must cover many costs from tools to advertising.

It’s human nature to want to secure the lowest price for your job, but think twice before automatically doing so, says Wisler. “Is it worth it to you to pay for a proven contractor who knows how to handle the hiccups that will develop,” he asks. “Finding an excellent contractor takes work. When you do find one, you want to hang onto them. Those trades need to be celebrated. There is a lot of work, knowledge and skill needed to do those jobs correctly.” And many quality contractors offer surprisingly affordable rates.

Here’s How to Find a Reputable, Budget-Friendly Contractor

Decide on Job Details 

You have a general idea of the project for which you’ll engage a contractor – remodel a kitchen, retile a bathroom, or reconfigure a laundry room. Before you choose a contractor, it’s important to understand available options, such as specific flooring materials (reclaimed hardwood versus natural stone) or bath options (Japanese soaking tub versus waterfall showerhead). You’ll want to hire a contractor that understands the precise requirements for your specific job. Some homes aren’t as easily retrofitted with modern upgrades as others. For example, including a whirlpool tub in your renovation may require significant additional wiring, plumbing and even structural support work, to accommodate the new electrical, water and weight demands of a large spa tub.

Sure, you can look online and ask friends for ideas, but Michelle Nelson, founder and host of “Build Your House Yourself University Podcast,” recommends those considering major home improvement or building projects attend seminars and classes hosted by contractors and interior designers to discover the latest trends and options.

Don’t stop there.

“Some places have large model home communities,” says Nelson, who also visits new home construction sites when she travels to various cities. “Take a look at what is new and what is trending. That’s a great way to get fresh ideas.”

Move Beyond Standard Referrals 

Nelson, a physician, could afford to hire top-end contractors, but she knew high prices didn’t always equal quality. So she began to educate herself about home building and renovations when she and her husband decided to build a new home just outside Little Rock, Arkansas.

“Review sites made me a bit wary, because I didn’t see how unbiased they could be,” says Nelson. “I really wanted to go out and find the three best general contractors in the region and work from there.”

Nelson gathered referrals from an extended network of housing professionals.

“I go to lumber yards, [construction] job sites and even Home Depot and talk to the [workers] there,” says Nelson. “I ask ‘If you were building your own house, who would you use [for a general contractor, plumber or other specialist]?’ And I keep those conversations completely off the record. I just want to know who they use in their own houses, in their family’s houses.”

If you want an array of pre-screened contractors, consider those that companies have designated “preferred.”

Insurance companies and suppliers of building and housing materials often have online lists of their “preferred” contractors. The companies that vet those contractors found they provide quality work, says Charles Thayer, founder and general manager of All Around, a Minnesota exterior home improvement company. He also recommends talking to those that manage and work in retail outlets that sell supplies to contractors, such as paint giant Sherwin Williams. “The employees know which contractors they consistently sell to, [and] who has a solid reputation for quality work,” he says.

Don’t Rush Into a Decision

This piece of advice is especially important after a hurricane or other severe natural disaster.

“There is a lot of canvassing by aggressive storm chasers [after major weather disasters] and that has given our business a negative stigma,” Thayer says. “It’s important for homeowners to research contractors and take their time choosing a contractor … If water isn’t pouring into your house (or no other health, safety or structural concern has occurred), relax, take a deep breath and make an educated decision.”

A first step for homeowners dealing with damage due to extreme weather or other unexpected circumstances is to contact their home insurance company. Agents or claim representatives can walk the homeowner through the process to fix the damage.

Dig Deep on References

Many homeowners ask family and friends for contractor referrals. They also follow online reviews from Angie’s List, Yelp and other online review providers. There’s nothing wrong with using those groups – in fact, some people swear by them. Yet it’s difficult to tell if such online reviews were left by actual clients or by friends or family members of the contractor. It’s also impossible to know if someone compensated some online reviewers for favorable comments. That’s why it’s wise to go further with references. Ask the contractor to arrange for you to visit clients’ homes and see the projects they’ve completed, recommends Wisler. That way you see the work and can subtly verify the customer is not personally connected – through family or friendship – to the contractor.

There are some sites and contractors that work to ensure references are independent.

“All of our consultants have a dozen references on a page with them at all times,” says Thayer. “They tell our customers to please reach out to some of the references. They also incentivize the request (by offering cash rewards to those who do so). We want [prospective] clients to talk to our customers.”

One additional point – don’t be swayed if a contractor doesn’t have a perfect online rating. Every home professional interviewed for this story noted that no one completely satisfies 100 percent of their clients. Beware of those who have no medium or even low scores in their histories. Family and friends may pad some contractors’ review histories with favorable notices.

Ask Questions

Licensed plumber Mary Thompson, chief operating officer of The Dwyer Group, a holding company for 11 service-based franchises, says questioning contractors about an array of points is vital. That’s especially true now, says Thayer, who notes a boom in less-than-reputable operators.

“Are they bonded? Licensed? Insured?” says Thayer, noting the consumer site Neighborly links homeowners with the fully vetted franchisees associated with her company. “If you were going to use a doctor, you’d make sure that person was a specialist in their field, not all things to all people. It’s critically important homeowners know all the answers to these questions before they agree to start work.”

Before you sign a contract, ask about the length of the job, cost and other obvious points. Also, be sure to ask whether the contractor will work on your job exclusively or juggle other jobs, too. Some not-so-obvious points that Thayer and other home improvement professionals ask about include:

• Insurance: Ask for a copy of the contractor’s insurance and read it. Don’t hesitate to ask the contractor to add you as an “additional” or “named” person on the contractor’s general liability contract, says Thayer. “Most homeowners don’t realize they can do that and that protects them from extra liability [such as if a worker damages another person’s house or property while working on yours],” he says. “Doing that takes very little effort on my part.”
• Subcontractors or employees: Ask if those working on your project are subcontractors or employees. “There’s nothing wrong with using subcontractors,” says Thayer. But you want to know who will be working on your job. Many people think employees are more dependable or better vetted than subcontractors. That’s not always true. Whatever the answer, ask about the workers’ backgrounds and responsibilities.
• Who will be on-site: Will the general contractor you hire be on-site throughout the job? If not, how can you quickly get in touch with the general contractor when needed?
• License: State and local jurisdictions have various licensing requirements. The best way to ensure your contractor has appropriate licenses is to ask for a copy of the license. Make sure you obtain the license number. Your local government can verify the license holder is in good standing and that the license is correct for the work they plan to do. Home Advisor offers an online guide to get you started.
• A binding or non-binding estimate: When you receive an estimate, ask if it is binding or non-binding. No matter the answer, read the paperwork to understand the fine print. Basically a non-binding estimate expires after a given time. That means the contractor may not honor the estimate.
• Bonding: A surety bond protects you in case the contractor defaults on your job. If that happens, the bonding company will engage another contractor to complete the job or compensate you for financial loss, according to the U.S. Small Business Administration. Options vary among states and cities.
• Grievance process: If a contractor did faulty work or otherwise did not satisfy your expectations, you have several options. Each state has a specific process by which clients can file grievances against contractors. Some homeowners hire attorneys or take their cases to small claims court. Before taking legal action, talk to the contractor to see if a resolution is possible. Another suggestion is to contact the local Better Business Bureau. Many offer free or low-cost Dispute Resolution services.

Checking references, going to clients’ homes and seeing a contractor’s work and other practices of due diligence should net you a quality contractor. But don’t sign with anyone — no matter how highly rated — unless you are completely comfortable working with them.

“You want to pay attention to those with stellar recommendations but don’t ignore your own gut and your own experiences,” says Nelson. “Does the contractor return your calls promptly? Do they arrive at your home on time? If they behave badly during the honeymoon phase when you’re selecting a contractor, their behavior won’t improve if you hire them for the job.”