How to Hire a Contractor

If you own a house at some point in time you will hire someone to make upgrades to the property. Even contractors that own homes hire other contractors to provide services that they either can’t do or can’t spare the time from work to do it themselves. For example an electrician may hire a roofing contractor and vice versa.

The hiring of someone to work on your most valued possession should not be taken lightly. The person you hire should have technical experience, business smarts and interpersonal skills, all of which have to come together for a successful project.

Get Organized

Even if you are planning to build a small deck or fence it pays to get all your information in order. This may include brochures from the home show, notes you have taken yourself and pages printed off the internet. Many people use a dining room table to spread out all the papers but you can find your own system. Organization is important for you to keep track of estimates, receipts and work schedules, and have them accessible at a glance.

This is also a good time to nail down what you can afford. If you have to borrow the money get the financial details completed with the bank so that you know how much you can spend.

Plan Your Project

After going through all your magazines and home show brochures you will have a pretty good idea of what you want. The fine details like types of materials and color matches may not be defined yet but get the dimensions of the project roughed out so that a professional planner can get you a rendering. For example, sketching out the floor plan of the kitchen you want will inform the kitchen designer how much space he or she has to work with. There are many inexpensive computer programs that can help you get a sense of the scope of your project complete with cupboards, floors and coloring.

Project Details

For a small projects like a twelve foot-by-twelve foot deck just drawing it to scale on graph paper will be enough for a contractor to give an estimate, depending on what materials you want. Larger projects like kitchens, room additions and bathrooms should be sketched first and taken to a professional designer. Many kitchen boutiques and home stores that deal in kitchens and bathrooms will have a planner on staff who will give you a free estimate on the cost of the cabinets, flooring and countertops. This information can be used for assessing estimates by general contractors if the kitchen or bathroom is part of a larger project. It will also give you the reality of what materials for the project really cost.

Finding Contractors

When your plans have been finalized it is time to make a list of potential contractors. It is usually good to get a large list so you can pare these down to three or four for estimates. Start with word-of-mouth referrals from friend and neighbours who have had good experiences with certain contractors. Building supply stores will have bulletin boards and don’t be afraid to ask the sales people who they would recommend as they deal with these people on a regular basis. There are also lists at building organizations, in the telephone book and with online directory and matching services.

When you contact these contractors ask these questions:

• Are you and your subcontractors licensed to do this project?
• Is this kind of project your specialty?
• How long have you been doing this work?
• Do you have a business license?
• Do you carry worker’s compensation and liability insurance?
• Do you apply for all the permits required?
• What does your warranty cover?
• Will you provide a written contract detailing all of your services?
• What will the work schedule be like? (Start and finish dates)
• How do you plan you keep the area clean, especially dust?

Competent contractors do not mind answering questions because they realize that you are investing a lot of money in their services. However, if someone of whom you ask these questions hesitates or says that he or she will get back to you then this may not be right person for your short-list.

Contractor References

When the questions are over the contractor should provide a list of at least three (3) satisfied customers. Phone these people and, if possible, go over and see the work. A competent contractor loves to show off his or her skills so this should not be a problem. If the contractor is hesitant about this then move on.

Questions to ask the previous clients:

• Are you satisfied with the results?
• Were there any problems that were not fixed?
• Did the contractor keep you informed during the process?
• Was the work site kept clean and safe?
• Was the work completed on schedule?
• Were there any unexpected changes to the project?
• Would they hire the contractor again?

In addition check with the Better Business Bureau in your area for complaints against this contractor. Even good contractors get complaints once and while but it is how they handle them that will make the difference.

Estimates

In order to get qualified estimates your plans have to be detailed, especially in larger renovation. In other words you need high-quality drawings or blueprints so that the bidding contractors can get accurate information from the supply houses and subcontractors. You can count on at least three (3) weeks for the estimates to come back for large projects. Small projects just need a list of what is anted: type of flooring, decking, size, etc.

• Fixed Price: This estimate will be the final amount that you pay except for where decisions for things like fixtures or flooring have not been finalized. In these cases the contractor will give an allowance for a general item and if you want a higher end floor or cabinet then this will be extra. Many contractors are not fond of this type of pricing because in many cases renovations bring surprises behind the walls. However, if they make contingencies for a certain amount of extras and the job is straight forward, then their profit is higher.
• Cost-Plus Price: In this method you pay the general contractor the cost of labour, materials, equipment rentals, overhead and profit. Cost-plus contracts let you see where your money is going but it’s best to set a limit on this type of a contract so the budget does not get blown.
• Design-Build: In a design-build a contractor scopes your project and then designs the whole process. A fixed or cost-plus can be used in this option as well.
• Fair Price: When deciding on a price consider what is a fair price. The lowest bid may be low because the estimator missed of a few details or did not understand the scope of the project. This is why you get three to four estimates.
• In Writing: In addition all estimates should be in writing on the official stationary of the company and include the address and phone numbers of the contractors. Applicable license numbers should also be on the letterhead and workers compensation and insurance information should also be included.
• Avoid the Hard Sell: If the estimator or contractors tells you that this price is only good for a specific period of time (like today) tell them no. This is a way to squeeze out the competition and to create panic and poor judgement. It is also unethical. Take all the estimates and weigh them carefully.

The Choice

• Pick the fair price: Take your time and see what the contractors are offering for their price (the highest bid may be the best deal).
• Consider contractor reputation,
• Do you like the person and can you see yourself working with this contractor?

The Contract

Like the estimate the contract should have all the details pertaining to the contractor’s place of business and certificates. It should also contain all of the promises made in the estimate. Before signing the contract it is best to get a third party - and even a lawyer – to go over it with you to make sure that all of the points are covered.

• A detailed listing of the job in its entirety
• Dates of start and completion
• Warranties are in place
• Proof of license, insurance and workers compensation
• Down Payment (This should be a small percentage. Do not pay for materials up front)
• A process to make changes in the construction
• Agreement of hold-back percentage for completion
• Work will conform to all applicable building, fire and safety codes
• Removal of construction debris and fixing and damage to lawns, etc.
• GST and other tax numbers

Process for Disputes

The majority of contractors want to have happy clients because their business relies on referrals. However, in almost any lengthy transaction difference of opinion will occur. The key is have a formal for settling disputes and the best one is maintaining a clear channel of communication.

• Communication: Start from the beginning with a good line of communication with the contractor. Set a time once a week when you can get a half-hour to go over how the project is coming along and for you to express any concerns.
• Letter:  If there is a problem that has not been dealt with verbally write a concise letter stating the issues that are problematic for you. Sometimes having things in writing can get better attention than talking.
• Third Party Action: Sometimes there is an impasse that requires a third party to help sort out like a contractor organization or consumer protection group. If a contractor has been lazy in getting back to fix something, or just ignores you, a third party intervention may shake things up in your favour.
• Small Claims Court: For small jobs you can force a contractor to fix or complete a job by taking the issue to small claims court. It doesn’t cost much and having a contractor served by a court official can speed things along.
• Lawyer: For a large project, if all other means to resolve issues have been exhausted, then legal action may be required. This should be the last resort and comes when a contractor does not try to rectify the situation.

However, luckily these cases are not the norm. The vast majority of homeowners have great experiences with renovating and much of this can be attributed to making the contractor understand exactly what you want to achieve.