How to Hire a Contractor

Quick takeaway: A strong hiring contractor checklist should help you confirm experience, licensing, insurance, references, payment terms and who will actually complete the work before you sign a contract.

Why hire a contractor for remodeling work

Depending on the scope of your project, the amount of time you have and your experience level, it may be beneficial to hire a contractor. If you’re remodeling your kitchen and need to hire multiple professionals to complete the work, you may be better off handing the job to a general contractor. They have relationships with experienced plumbers, electricians and other subcontractors, and can coordinate the work so you don’t have to spend time overseeing multiple people.²

Hiring a contractor can also save you time and money. Contractors are experienced at what they do, so they know how to order the right amount of materials, schedule labor and adhere to a project’s timeline. If you have a reputable contractor at the helm, you can trust that they’re working as efficiently as possible – and doing the work correctly.²

If you have a smaller job – like painting walls or adding shelves to a pantry – you may be better off hiring a handyman or completing the work yourself, if you’re comfortable making home improvements.

How to find a reputable contractor

Finding a general contractor doesn’t have to be difficult. One place to start is with referrals from people you trust, along with reputable industry directories and local licensing resources. If you’re dealing with covered damage to your home, home insurance contractors may also come up during the repair process, so it’s worth asking how contractors are sourced, vetted and scheduled before work begins.

You can also reach out to family members and friends for a referral. When you talk to a friend or relative, it’s easy to ask questions like:

• Were they on time and on schedule?
• What is the quality of their work?
• How much did they charge?
• Did you feel the pricing was fair?
• Is there anything I should know that’s concerning?
• What did you like most about this contractor?

Try to collect names of at least four to six contractors to evaluate.³ This gives you several options from which to choose, so you can find the right professional who’s a match for your project and your personality. Once you collect a few names, look them up online to read reviews, if they’re available. You can also search the National Association of the Remodeling Industry or check in with your local municipality to ensure they’re licensed, and carry personal liability insurance, property damage coverage and workers’ compensation insurance.⁴

Once you’ve narrowed down your list even more, conduct phone and in-person interviews. During these interviews, you’ll want to ask:¹,³

• Do they typically work on remodels like yours? Or bigger or smaller projects?
• What is their experience?
• How long have they been doing this type of work?
• Do they have photos of recent work they can provide?
• Do they have references they can share?
• When can they start?
• Will the project require pulling permits?
• Do they provide a contract before starting work?
• What is their payment model?
• Can they provide proof of applicable licenses and insurance?

Throughout the interview process, you’ll want to find someone who has significant work experience, and who carries a top reputation. Ideally, you’ll hire someone with integrity, good listening skills and a track record for success.⁵

Hiring contractor checklist: What to confirm before you choose

If you’re comparing several bids, a simple hiring contractor checklist can make the process easier. It can also help you spot gaps before work starts.

How to select the right professional

Next, invite your top two or three contractors into your home to review your space and discuss the project. Be prepared to discuss your budget for the project, desired timeline and what you’d like your remodel to include. Remember to stay flexible. For example, you may need to adjust your budget if you’d like to add costly features, like custom kitchen elements or high-end materials.

Once you’ve met with each contractor, ask for a detailed written estimate that separates labor, materials, permits and other expected costs. That makes it easier to compare bids accurately and spot potential gaps before your remodel is underway. Keep in mind that labor availability, supply chain challenges and material choices can all affect the final cost.

Take your time before making a final decision on a contractor. Remember, doing your due diligence at this point can help you select the right contractor and avoid unexpected disasters and rising costs along the way.

How to set a payment schedule

As you evaluate bids, it’s important to ask contractors how they design their payment schedules. Depending on the size of the job, reputable contractors will ask for a 10% to 30% down payment when you sign the contract. Based on the amount of the down payment, they’ll then set a schedule for the remaining balance as the project is completed. Be cautious if they ask you for too much money up front. It could be a sign of financial issues or a scam. It’s always best to avoid making a final payment until the work is complete, and you’re fully satisfied.⁶,⁷

Above all, never pay cash up front for your project. If your contractor bails, or if the work is done poorly, you’re at risk of losing your money. If you hire a contractor for a smaller project, like replacing part of your deck, you may be able to pay with a check or credit card. And, if you’re adding a new room or refinishing a basement, it may be possible to secure financing.³ Speak with your bank or a financial professional if you need help.

What to include in a contractor agreement

Make sure your contract outlines every project detail possible. If something goes wrong and you need legal advice, it’s imperative that your contract offers all the details in writing. For example, a solid contract should include:³,⁸

• Project scope: description of the work, materials, exclusions and change-order process
• Timeline: start date, major milestones and expected completion date
• Cost and payment terms: deposit, milestone payments, final payment and financing details
• Permits and inspections: who is responsible for permits and required inspections
• Insurance and licensing: contractor license, liability insurance and workers’ compensation details
• Subcontractors: who may be on-site and who supervises their work
• Cleanup and closeout: debris removal, final walkthrough and what happens if either party terminates the agreement

How to hire a contractor for home insurance repairs

If your project follows covered damage, the process may look a little different than a planned remodel. Home insurance contractors may be involved after a claim because repairs may need to match the documented damage, claim scope and timing of the insurance process.

Before work begins, ask whether the contractor has experience with insurance-related repairs, whether their estimate matches the scope of damage and whether they’ll communicate directly with your adjuster if needed. It can also help to keep copies of inspection notes, estimates, invoices and photos in one place.

For more guidance around claims and repairs, learn how to file a home insurance claim and read our guide to documenting home damage.

Hiring a subcontractor checklist: What homeowners should know

You may hire a general contractor, but subcontractors often do parts of the job like plumbing, electrical work or flooring. A subcontractor checklist can help you understand who will actually be entering your home and what role they’ll play.

• Ask which parts of the project will be handled by subcontractors.
• Confirm whether the subcontractors are licensed and insured when required.
• Find out who supervises the subcontractors and who is responsible if work needs to be corrected.
• Request a timeline that shows when subcontractors are expected on-site.

How a remodel may impact homeowners insurance

Contact your homeowners insurance company to ask if your remodeling project will impact your premium. If your remodel increases your home’s replacement cost, your coverage needs and premium may change. Smaller cosmetic projects may have little or no impact, but larger changes, additions or major upgrades are worth discussing with your insurer.

An insurance professional can help you understand the impact of your remodel on your insurance. If you’re improving your home’s safety, like replacing old electrical wiring or adding home technology upgrades, (for example, security cameras or automatic leak detection systems), you may get a discount. The same goes for simple home maintenance projects.

Related reading: How Renovating Your Home Affects Insurance Premiums and When to Hire a Professional for Home Repairs

How to handle issues that arise

As you embark on renovations, be aware that timelines frequently change, and supply chain issues can impact costs and availability of materials, which are often out of the control of the contractor. Ideally, there will be no issues and the renovations you’ve been dreaming of will be successfully completed. But the reality is, sometimes problems occur. While faulty workmanship is not covered by insurance, ensuing damage typically is. In the unfortunate case that this happens to you, there are resources to help. First, try to resolve any issues directly with your contractor. If needed, you can also reach out to:³

• The Better Business Bureau
• A local home builders association
• A local consumer protection office
• A state attorney

If you did your due diligence during the hiring process, as well as when agreeing to the contract, your risk for issues will be significantly reduced. But remember, unforeseen circumstances can happen to anyone. Do your best to look ahead and resolve them swiftly.