Tips on Hiring a Contractor
This information is provided to assist a homeowner in selecting a contractor.
Prepare & Plan
It is important to know what you want so you can give a clear picture to the contractor.
Be as specific as possible. Have an idea of the size of the improvement, materials, appliances or fixtures and your price range. Depending on the scope of your project, an architect may be needed to design the project. Visit showrooms, model homes, and home improvement stores to see recent trends and new products that are available.
Who to Call
The most frequently used method to find a reputable contractor is to ask a friend or others who have had work done for a recommendation. Another source is building professionals (i.e. architects, designers). Home improvement stores, lumber yards, and home decorating stores may know reputable contractors in the area. The phone book Yellow Pages and advertisements in local papers may also provide the names of potential contractors.
Meeting with Potential Contractors
It is easier to compare the contractors' estimates if the same written scope of work is used for each estimate. A written, itemized estimate related to the scope of work should be requested of each contractor. Additional items to include in your discussion are:
- Who is responsible for getting and paying for building permits
- Timeframe for the project
- Responsibility for cleanup and provision of a dumpster
- Proof of insurance
- For comparative purposes, a minimum of 3 written estimates is recommended
Making a Decision
The contractor's background and reputation should be carefully checked. Be sure to ask the references about the scope of work done, if the project was completed in a timely manner, any problems that came up and if they would hire this person again. Contractors are only going to give references of people that were pleased with their work - you might want to ask the reference how they heard about the contractor. The local Better Business Bureau at 609-588-0808 and the Monmouth County Office of Consumer Affairs at 732-431-7900 can supply homeowners with reliability reports on many area contractors.
Hiring a Contractor
Once a contractor is chosen, a contract is required if the home improvement project is in excess of $200. The contract should include the following information:
- Legal name and business address, contractor's name, address, phone number and state license number
- Estimated start and completion date
- Financial terms (total price, payment schedule, method of payment, finance charges and cancellation penalty)
- Details of the contractor's responsibility (i.e. cleanup, providing dumpster protection of personal property)
- Description of work to be done
- Specification of all materials and products to be used or installed including size, color, model, year, capacity, brand, quality, grade, and quantity
- Statement of any guarantee or warranty with respect to products, materials, labor or services
- Binding arbitration clause, enabling disputes to be resolved quickly without costly litigation.
- Depending on the scope of the project, you may want to have a lawyer review the contract. Prior to accepting a contract, ask to see a copy of the contractor's certificate of insurance to be sure they have workmen's compensation and other liability insurance.
Once hired, contractors need a percentage of the cost of the project to purchase supplies, order appliances and pay for permits and other construction costs. Generally, 15 to 20% of the project cost should be adequate, but this amount should never exceed 30%. Many contractors set up a payment schedule, which requires payments to be made at set times or as the actual work gets completed. Some contractors prefer to link the payment schedule to inspections. Payment is then made after the job passes certain specified inspections.
It is important to hold the final payment for the project until all aspects of the contract are fulfilled. According to New Jersey State Law, final inspections are required to be satisfactorily completed before the final payment is made to a contractor (NJ 13:45 A-16.2). If the contractor is responsible for calling for inspections, request copies of final inspections certificates prior to issuing payment.
The County Offices of Consumer Affairs can assist you in resolving complaints against contractors. You will need to contact the office located within the contractor's County. The Monmouth County Department of Community Affairs can be reached at 732-431-7900.
Things to Beware Of
- Price reductions or other compensation to be received because the property will be used as a model
- Misrepresentations that products or materials need no periodic repainting, finishing or maintenance
- Misrepresentation that a special price or discount is being given because of market survey or test, use of materials left over from another job, or some other reason
- Being asked for more than 30% of the project cost prior to the start of the job
- Hiring contractors who go "door-to-door" or someone you did not contact
- It is the property owner's responsibility to ensure that inspections occur at specified times during the construction process. You may have the contractor call to schedule the inspections, but make sure that your contractor follows through.
- You have to remain flexible during home improvement projects. Inevitably something unforeseen always seems to happen. However, be sure that any changes to the contracted scope of work are agreed to in writing.