Building a home or renovating can be a big undertaking. Choosing a reputable contractor directly influences the quality, workmanship and time it takes to complete your project. Those who have been the victim of working with unprofessional crews know firsthand that unforeseen issues can easily tack on thousands to an allotted project budget forcing some to seek new contractor midway through. This not only extends the amount of time to complete your new construction, but in extreme cases can even involve lawsuits.
In order to avoid delays, added costs and unnecessary headaches, it is crucial to know how to go about selecting a contractor prior to beginning your project. The following tips will help you weed out the reputable contracting crews from the amateurs.
Nothing is more indicative to your project’s end result than their past work. If you see something that strikes your eye, inquire about the company which was responsible for overseeing the work. Alternatively, ask family, friends and coworkers for their experiences with past contractors. Research contractors’ online reputations; find reviews from previous homeowners and identify their credentials.
Verify their credentials
Once you’ve created a list of several companies you’re interested in working with it’s important to understand they hold the necessary legal documents in order to conduct business within your area. By law contractors are required to not only be licensed but also be bonded. Licensing is typically required on the state level and can be checked online through the Contractors State License Board. Contractors bonds – a form of a surety bond – are not required for all contracting companies, but usually required for those who have performed large-scale construction projects.
The type of surety bond required within the construction industry can range depending upon the state the work is being held in, but in general they should hold a contractor surety bond, payment bond and performance bond.
Contractor surety bonds ensure the principal (or the one performing the work) will uphold to the provisions of a contract. A payment bond promises the construction organization will pay for services and materials while a performance bond upholds the fact the work will be done as specified by the contract.
In general, bonded contracting companies supersede non-bonded organizations. This is due to the fact that surety bonds are mainly required on large-scale public construction projects. Therefore, if a construction company holds a bond it is most likely because they were either involved in a major construction project, or they bid on the chance of winning such a contract. Also, in order to obtain a bond, an organization’s financial background is investigated. Therefore bonded companies typically have much stronger financial histories than smaller contracting companies. This is an added safety measure for customers and helps give them peace of mind as bonded companies will be less likely to take your money and run.
On top of the bonding and licensing requirements, all contracting companies should hold workers’ compensation insurance for employees.
Ask for bids
With the research you’ve conducted, finalize your list of perspective contractors to three companies. From this, obtain bids that will outline their anticipated time to deliver your final product and, most importantly, estimated cost to complete your project. Ensure all elements are detailed in writing and only sign with the organization that explains in detail their terms and conditions.
Manage your expenses
As a general rule of thumb, do not plan to pay more than 10 percent down or $1,000, whichever is less. Maintain a file which contains the details of when all payments were sent and processed. Finally, never send in a final payment until the job is complete to your satisfaction.