7 Things to Know Before Hiring a Contractor

Inspiration has struck and you've decided to make over your home. Maybe you're dreaming of a revamped kitchen to cater to your love of cooking, a deck extension for entertaining, or a new bathroom that will give you the space and privacy you need. Whatever the plan, construction projects require a skilled contractor to do the work.

Once you decide to upgrade your home, finding a skilled contractor becomes a priority. If you've spent hours planning out designs, materials, and other details, you want to be sure you can employ the right person to make your plan a reality.

But how do you ensure your renovation is completed satisfactorily without a budget blowout or legal dispute? Are independent contractors a good choice? Do you need a contractor with a specific license?

This article outlines seven things to know before hiring a contractor, so you can avoid renovation stress and ensure your project is safely on track!

1) What Kind of Contractor Do You Need to Remodel Your Home?

You've decided what type of renovations you'd like to make and where in your home they should be done. But, depending on the complexity of the work, you may be wondering what type of contractor you need to complete the job successfully.

Do you need to use a professional contractor?

There is a good chance that a handyperson can complete your home renovations if the work is small scale. But are they qualified for your project?

A skilled and experienced handyperson can handle most basic renovations, such as painting, installing new light fixtures, or replacing flooring. However, if your renovation plans are more complex, such as a kitchen or bathroom makeover, you will likely need to hire a specialized contractor.

Hiring a handyperson to work on your home means checking what they can and cannot legally do. Many small-scale contractors won't have the licensing requirements needed for large-scale projects. The liability falls to you if something goes wrong and the contractor is not legally covered.

What about a home remodeling contractor?

A home remodeler or general contractor is someone who has the skills and experience to complete more complex renovation projects. They are licensed, bonded, and insured professionals, so they can help you get exactly what you want for your home.

A general contractor will manage and organize all aspects of the project; this includes hiring and coordinating subcontractors to complete various tasks.

How do you find a good contractor?

The first tip for finding a good contractor is to talk to more than one. Finding an experienced professional with whom you also have a good rapport will make working together easier and misunderstandings can be avoided.

You can find a reliable contractor by asking friends or family members to pass on information or looking online for referrals. You may also want to check with your local Better Business Bureau (BBB) or other consumer protection agency.

Your contractor should be able to show references from previous clients. And you should check these references carefully. A bad reference could indicate that the contractor is not trustworthy.

2) How Many Similar Jobs Has the Contractor Completed?

If you hire someone through a referral service, ensure they have the experience and expertise to do the work. Many people will claim to be an expert at something, but there is no way for you to know if they are who they say they are until they do the job.

One way to check their expertise beforehand is to learn what similar jobs they have completed. Along with checking references from previous customers, ask for photos or videos of work they have completed similar in scale and design to your plans.

Seemingly simple renovation tasks always hold a level of risk. For example, if your contractor has never remodeled a bathroom before, you may not want to test their skills by installing your expensive bath and new plumbing.

3) What Is Your Budget?

Knowing your budget underpins the successful outcome of any renovation project, especially if you’ve taken out a loan, like a construction loan, to renovate your home. But this can be tricky as many aspects of a building project entail hidden costs or are subject to change.

While you may have already researched the cost of materials, you will need to ask your prospective contractor for a detailed estimate. You should also consider allocating an extra 10-25 percent more to the budget for unexpected costs.

Options to reduce costs

Setting a clear budget and listing all potential costs helps you identify where you may be able to make savings. Make sure your contractor clearly communicates and agrees on any cost-cutting plans before signing a contract.

Here are some ways you can save on your renovation:

The payment terms

Once you are confident you have the right contractor on board, you need to work out the terms of the contract. For payment terms, you can typically use a progressive payment system.

A progressive payment arrangement is tied to the job's progress and is outlined in your contract. An upfront payment of around a third of the total cost is usually necessary to purchase materials. Depending on the project scope, however, it can be up to half of the total cost. The final payment is released once you're satisfied with the completed job.

Any contractor who pushes for most or all of the money upfront should raise concerns. You should then reconsider if they are right for the project. In any case, insist on receipts for all payments and avoid paying cash.

4) What Permits and Insurance Covers Are Required?

Your contractor should have experience obtaining the necessary permits and be familiar with your area's workers' compensation and liability insurance laws. In addition, your local government will likely set contractor license standards for your location.

Therefore, contacting your local government is a good place to start your inquiries regarding requirements and restrictions for your project. Some of the main issues to ask about include the following:

The need for a licensed contractor

While using an unlicensed and uninsured contractor might save you money in the first instance, it means you become responsible for all damage and injuries during the renovation process.

Therefore, you should check what's required with local authorities and thoroughly check your contractor's licenses to ensure they cover all aspects of your renovation work.

Required building permits

Any home renovation project requires a building permit. Be sure these are fully approved. As previously mentioned, any work that has not been approved can be removed, with you bearing all costs.

Workers' compensation rules

What if an accident or injury occurs during your renovation? If that happens, workers' compensation covers workers, and your contractor should have it included within their business liability insurance.

It's important to check that your contractor has this coverage because if not, and one of their workers is injured on the job, you could be held liable.

Liability insurance requirements

General liability insurance is a legal requirement and protects against injury to a third party caused by your contractor's business.

This insurance helps cover the cost of medical bills and property damage if someone other than a contracted worker is injured on your property during the renovation. Again, make sure your contractor has this coverage before work begins.

5) Does the Contractor Provide a Warranty?

It's generally required that contractors must give a minimum one-year warranty for work carried out according to state laws. However, some industry experts argue that the obligation to address defects in work endures beyond one year.

Many professional contractors are confident in their work and will offer you a fair warranty covering labor and materials beyond a year's duration. However, it's good to know what legal channels homeowners have access to in case of any disputes before starting your renovation.

6) How Can You Protect Your Property during Renovations?

While upgrading your home is exciting, renovating brings a lot of disruption and mess. For example, you don't want your bathroom improvement to cause damage to other areas of your house because of the constant movement of workers and equipment.

Talk to your contractor about measures to protect your floors, walls, and furniture from dust and damage. This might require erecting temporary dividers, covering windows, protecting countertops, and adding carpet and doorframe protectors.

Also, consider how to protect valuable items from damage and opportunistic theft. You can secure these belongings in a locked room or safe, an offsite self-storage unit, or another safe location.

Finally, remember to use your alarm systems outside construction hours and add sensor lights and video surveillance cameras for further peace of mind.

7) Which Home Improvements Pay Off?

Not every home improvement exercise is guaranteed to give you a positive return on investment (ROI). For example, while you may have always dreamed of an outdoor kitchen, the expense of its construction may not pay for itself in added home value.

So how can you evaluate if your dream project will bring a healthy ROI? Conducting research on the property market in your area, talking to real estate agents, and doing a property valuation to gauge your home's current value is a good way to get started. You can also check out one of our other blogs to learn the 7 things you should know before renovating your home

Furthermore, new technology allows homeowners to identify the best projects that will increase home equity. For example, Housetable uses artificial intelligence (AI) tools to create a curated list of improvements most likely to boost your home's value. 

Wrapping Up

Now that you're armed with the seven things you need to know before hiring a contractor; we hope you're feeling well prepared and ready to get your renovation job underway.

Hiring the right contractor for the job is both a professional and personal decision. Naturally, you need someone with the right skills and experience. It's also helpful to find someone with good communication skills who you can trust to be committed to doing a great job.

For a rapid evaluation of the projected value of your desired renovation or to gather the best home improvement ideas for your home, try out our AI-powered renovation wizard today or request your free consultation call to find out more. 

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