CHOOSING A CONTRACTOR

Personal recommendations from friends and neighbors are your best lead to a contractor who will provide quality work at a fair price.  If personal referrals are unavailable, try looking in your local newspaper or the yellow pages of your phone directory.

                Ask each contractor on your list for local references. Call your local Better Business Bureau and consumer protection office; ask for any available information on the contractor, including how long the company has been in business and whether there is any record of complaints or other relevant activities.

                Ask the contractor if the firm is a member of the National Association of the Remodeling Industry (NARI),

                Some states require contractors to be licensed and/or bonded.  Check with your state consumer protection office or state, county, or city-housing authority to make sure the contractor meets all licensing and/or bonding requirements in your area.  Remember, however that in most cases bonds simply ensure compliance with local building codes or other regulation; they are no guarantee of integrity or competence.

                Finally, ask the contractor if the company is insured against claims covering workers’ compensation, property damage, and personal liability in case of accidents.  In some areas, law requires such insurance.  You might want to ask to see a copy of the certificate of insurance, and ask for the name of the contractor’s insurance carrier and agency so that you can verify that the contractor has adequate coverage.

THE AGREEMENT

A detailed, written agreement is your best protection against annoying and costly disputes.  Make sure the contract contains all the oral promises you’ve been given and that it spells out exactly what the contractor will and will not do.  In general, a home improvement contract should specify the following:

Ø        The name and address of the contractor

Ø        All financial terms, including the total price, the amount of down payment, when further payments are to be made and in what amounts, and whether there is a cancellation policy.  The down payment generally is about one-third of the total price; some state or local laws limit the amount of down payment that can be required.  Try to negotiate a plan that schedules further payments at intervals as the work proceeds, with amount of each payment based on the work that has been completed. 

WORKING WITH YOUR CONTRACTOR

It is important to establish a good working relationship with your contractor from the start.  You’ve hired the firm to get professional assistance with your project, so it only makes sense to listen to the contractor’s suggestions and advice.  At the same time, though, you should not be embarrassed about asking questions, checking the work in progress, voicing your concerns if something doesn’t look good to you, and insisting that problems and mistakes be corrected.

                The contractor is responsible for correcting his or her own mistakes, but any changes to the original plan that you request during the course of construction may cost extra.  These revisions, commonly called “change orders”, should be put in writing as an amendment to the contract, along with any agreed upon additional costs.  Many contractors require that the additional cost be paid at the time the change order is signed, in order to prevent disagreements at the end of the project.

                Keep in mind that changing your plans may not only add to the cost of your project but can add to its length as well.  Changes may require the contractor to order new materials or to reschedule work crews and subcontractors.  The best way to avoid the necessity for changes is to make sure, before work begins, that the contractor has a clear understanding of what you want and has clearly diagrammed the plan so you can visualize the final product.

                If you borrowed money to finance the project, the lender generally will require a signed completion certificate before releasing the last payment.  Never sign a completion certificate until all the work called for in the contract has been performed to your satisfaction.

RED FLAGS

Proceed with utmost caution if you encounter any of these warning signs of possible trouble ahead:

Ø        You cannot verify a contractor’s name, address, telephone number and/or credentials.

Ø        You cannot verify that the contractor is licensed, insured, and/or bonded as required.

Ø        You are unable to obtain references, or the references have reservations about the contractor’s work.

Ø        The contractor offers you a “special low price” in exchange for the use of your home as a “model home” or “show house”.

Ø        You are offered an unbelievably low price for a repair job because the contractor claims materials are “left over” from another job.

Ø        You are told that a “special price” is available only if you sign the contract today.

Ø        The salesperson tries to pressure you into signing a contract by using intimidation or scare tactics. (“Your roof is about to cave in!” “Your furnace is ready to explode!”)

Ø        You are asked to pay for the entire job in advance or to pay in cash or in a check made out to the salesperson.