Home Improvements: How to Hire a Contractor

In this series, we’ve been talking about the best ways to tap into the  equity in your home and some of the reasons that you might want to do that.

Today, we’ll tackle the topic of Home Improvements. You have two choices when making improvements to your home.

  1. You can do the project yourself. They built a whole TV network around this idea.
  2. You can hire a contractor.

If you choose option #1, be realistic about your skill level. If you really know how to re-plumb the bathroom or rebuild the wall, by all means, save your money and have at it. But don’t start a project if you don’t know how to finish it, because the contractor you ultimately hire to finish the project will just tear it all out anyway and it will end up costing more than if you’d hired them in the first place.

If you’re going to hire a contractor, these ten tips can help ensure that your contractor measures up:

  1. Make sure your contractor has a license to do the work you’re hiring him to do.
  2. Check the contractor’s license number through your state’s contractor licensing board.
  3. Get at least three bids.
  4. Get at least three references for the contractor you choose. And then make sure you actually contact the references so that you can review the work he’s already done.
  5. Ask for a written contract and don’t sign anything until you fully understand all the terms.
  6. Pay no more than 10% or $1,000 down, whichever is less.
  7. Keep records of payments and don’t let payments get ahead of work.
  8. Don’t make the final payment until you’re satisfied with the job. Put into the contract what that means. For example, some people put into their contracts that the contractor will only receive his final payment when the work passes its final building inspection or when the local Building Department grants a Certificate of Occupancy.
  9. Never pay cash.
  10. Keep a file of all papers related to your project.

The lowest quote may not actually be the cheapest. Do your research. Ask friends, neighbors, and family for recommendations and check with your Better Business Bureau. Remember, cutting corners on a construction project can be costly in the long run in terms of later repairs or reduced resale value.








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