HOW TO SELECT A CONTRACTOR
Find the contractor
Use one of these more reliable methods for finding a contractor and then select a few contractors to investigate further. If done properly, it can be time consuming to evaluate more than a few prospective contractors, so careful scrutiny is important.
1. Friends and Family – Word of Mouth – Ask your family, friends, or co-workers for a few names of contractors they have worked with who gave them a positive overall experience.
2. Trade Associations – Call your local home builder or remodelers associations for a list of members who are in good standing.
3. Chamber Of Commerce – Your local Chamber Of Commerce also has listings of their members who are in good standing.
4. Local professionals – Sometimes a local trade professional such as an architect or building inspector can recommend a contractor but use caution to be sure that there is no preferential relationship between them.
Less Reliable Sources
1. Advertisements such as yellow pages, TV, radio, print media An ad in the yellow pages or on TV etc. shows some sign of financial stability but does not necessarily speak for the quality of a contractor’s work.
Qualify The Contractor
Now that you have selected a few contractors to pursue, the most time consuming yet most important task begins – to qualify the contractor.
1. Get Their Pricing
Consumers will often rely exclusively on price as a determining factor, either in hiring the lowest bidder or taking the middle bid (throwing out the high and the low bids). The problem with this reasoning is that price is only one small part of the entire picture that you should be scrutinizing when selecting a contractor.
2. Get References and Call
Ask the contractor for comparable references and call them. Ask if they were satisfied with the contractor’s work and if they were easy to work with. Ask straightforward questions to draw out answers that will paint a total picture of the contractor. Get references which are current and will demonstrate consistency from one job to another.
3. Look at Work
Although this can be very time consuming, whenever possible schedule an appointment to look at recent work completed by the contractor. If this is not feasible, perhaps the contacted reference could mail or email some photos to you. Before and after shots could be helpful if an onsite visit is not possible.
4. Verify Their Credentials
Ask the contractor for the appropriate license needed for your town and get a copy of their insurance and bonding if required. Take the time to verify the validity of these documents because unfortunately, although they have paperwork the coverage may have lapsed or worse (insurance scam). You should also verify how long the company has been in business.
5. Verify Their Stability – Years in Business, Financial Stability
Although this may be difficult to attain, make a concerted effort to learn if you are dealing with a financially solvent business. Sometimes a contractor will walk off a job because they are losing money on it, usually due to their own poor estimating skills or inadequate insurance to cover damage on a job. The problem may not even be from your project, but the company is losing money and must close their doors because they do not have the stability to absorb any losses. This can happen to even the most talented tradesmen because the skill level is only a part of running a successful business. Business acumen is also an important component. What good is a warranty if the contractor is not there to back it up in the future
6. Check for Complaints
Check the contractor against governing bodies that monitor the industry such as the BBB, consumer affairs, and attorney general. Check for liens, violations, or arrests, etc. Do they have any legal action against them? Do they have any judgments against them?
This is one of the factors that the Better Business Bureau looks at when rating a business. Does the company have a physical address or just a P.O. Box? Is it a foreign corporation which may used to limit their liability? Does the phone ring at their address or to a remote answering service? Do they have bank accounts in good standing? Do they have standing relationships with suppliers under their business name?? Are they willing to disclose all this information to you? You should not deal with a company that is hiding behind a veil and is not willing to provide full disclosure.
8. Check Their Experience
How long have they been in business? More specifically, you should check their experience with jobs similar to the project that you are looking to undertake. Do they use their own forces or do they use subs and more importantly, how long have the tradesmen worked for the company? The company may be in business a long time but only recently started to engage in more significant work and you don’t want to become their guinea pig.
9. Review the Contract
Review the contract for:
A. Detailed Specifications – Does it contain enough detailed descriptions to ensure that everything is to be done or is it limited in scope of work, which leaves room for unjustified change orders?
B. Terms and Conditions – Are the terms provided to protect you as well as the contractor? Do you know the proper terminology to use in the contract that will protect you? Do the terms provide for warrantees, lien waivers, start and completion dates, a rescission clause, a stop work clause, etc. You should learn about the clauses that are there to protect you and be sure to have them included within your contract and disqualify any contractor who refuses.
C. Payment Schedule – Is the payment schedule set up so that you and the contractor feel protected? More payments spread throughout the project is a safer approach to a payment schedule. Do they have an escrow account (required by NYS Law) to place payments for work not yet completed?
D. Material Description – The contract should specify clearly the exact type of material that is to be used and what items the owner is responsible for purchasing separately.
E. Determine Responsibilities – Who is responsible for getting the permits, removing the debris, daily clean-up, or obtaining the final approvals and certificates? Be sure to get all your questions answered before preparing to make your final decision.
Making The Final Selection
Usually, once a contractor meets all the above criteria it quickly narrows the field of acceptable candidates. This is the time to compare the prices of the qualified companies. Now you are looking at value and not just price. With your final selection you should certainly try to select a contractor you really like, one you feel you can trust and with whom you’ll be comfortable communicating. You should be able to ask any questions, no matter how trivial you might think they are, and get answers you understand.
Oftentimes the contractor that you would really like to use is more expensive than the others. If you can afford to use them then it is the most sensible choice. If it is outside your budget constraints, then maybe the scope of work can be modified to fit within your budget and sometimes, if asked, the contractor might make price adjustments to make his services more affordable.
Regardless of price, it is so important to get that proper fit. Low prices can be very seductive, especially when the budget is tight. Trust your instinct. If something just doesn’t feel right, then this might not be the correct person for the job. Whoever you choose will be spending a lot of time in your home, and possibly around your family, so finding a contractor you can trust will affect more than just your financial “bottom line.”
Questions To Ask Contractor References
- Did they stay with the job until it was completed or did they bounce from job to job so you never know when to expect them back on your job?
- Did they complete the job on time as scheduled or was it significantly delayed?
- Did they do everything that they agreed to do or did they leave small details incomplete?
- If left incomplete, did they come back to finish the work?
- Did they come back to make repairs, if needed, once the job was completed and paid for?
- Were they organized and was the project well coordinated or were there delays and other problems because of poor planning?
- Were you pleased with the quality of their workmanship and their attention to detail?
- Did they respect your property by protecting your exterior plantings, interior floors, walls, and furniture and did they install effective dust barriers and good protection from the elements?
- Were there any problems that arose during the job and did they resolve those problems to your satisfaction or did they talk around a problem and try to justify its existence?
- Did you trust them (all tradesmen) to be in our home without supervision or did you feel the need to be home to baby-sit?
- Were they pleasant to work with or did they become rude or hostile when problems arose?
- Do you believe that they provided you advice to benefit you and your project and that best met your needs or do you believe they made decisions to benefit themselves, their schedule, and their pocketbook?
- Did they go out of their way to solve problems or research questions that helped personalize your project or did you get a “cookie cutter” job where no extra thought or insight was provided?
- Did they keep your home and property clean or did you constantly clean up after them?
- Were the workmen professional, courteous, respectful gentlemen as well as helpful in answering questions or resolving problems, or did you have to suffer through loud music, foul language and rude behavior throughout the job?
- Now that the job is done do you still feel like you paid a fair price for the level of workmanship that you received?
- Do you have enough confidence in them to use them again and refer them to your family and close friends?
- Did they do all the work as agreed for the original price that they quoted or was there significant cost increases? Do you feel that they were justified?
- Were there any problems or concerns with the project or contractor that although I haven’t specifically asked you about, I should know about?
What You Should Know Before Starting A Remodeling Project
There are many skilled and honest contractors for sure, but there are also some contractors who are just inept and even worse, there are some who are scam artists. Statistics gathered by the Better Business Bureau show that the home improvement industry consistently ranks at the top of the list for consumer complaints.
So, how do you tell the good ones from the bad?
As you read through this you will see how most of the serious problems come down to money, or lack thereof. Although many contractors may be highly skilled craftsmen they may be poor businessmen, poor money managers, or just plain irresponsible. Ultimately, they run out of money and it has a seriously negative impact on your wallet and peace of mind.
The Five Biggest Contractor Scams and Shortcomings and How To Avoid (And Why It Won’t Happen With Remodeling Alliance)
1.They Take Your Money and Run
It does not happen often but it certainly happens enough to be concerned about. These people are predators. The contractor may appear to be reputable and is very pleasant and personable through the entire bidding process. He promises the world and the price is unbelievably low so you sign up with him. He requests a significant down payment and will sometimes have some material delivered to your property to put you at ease. He may even start some work such as demolition.
Once he gets the large payment and it clears the bank, suddenly you don’t see him anymore; he won’t return your calls etc. Then you come to find that the material that was delivered was not paid for and you are responsible for that cost, or the laborers and tradesmen haven’t been paid and are putting a lien on your home. Plus, your house is left torn apart and exposed to the elements and any work that was done was probably sub-standard and must be re-done. These are the horror stories that you see on tv and read in the newspapers but for every one that you read about there are countless others who suffer in silence with no place to turn and not enough money to continue with the project as planned.
Reasons For This:
There is a bad element in every sector of every industry. It is often difficult to tell these scam artists from the respectable businesses without a good investigation.
We do not take large down payments (ie. $35,000 down on a $85,000 job) but rather our payments are spaced throughout the length of the project. 11/22/2016 The terms of our four step payment process in the written estimate given: 1.) A 15% Deposit upon signing, 2). A HOA Approval/Materials Payment of 35%, 3.) A Start Payment of 30% upon arriving on site and 4.) A Final Balance Payment 20% upon substantial completion.
2. They Walk Off The Job
One big complaint we hear about is how many times contractors just walk off the job. The burden is now on you to try to locate another company to finish the project and in the interim you are living in a disaster zone. This is usually compounded by the fact that you lose time trying to get the contractor to come back and then determine your legal and financial alternatives to resolving the situation. You may not lose a lot of money out-of-pocket but chances are that the work that was completed leading up to the walk-off, was sub-standard and will need to be redone as well. You should also expect to deal with unpaid sub-contractors and material suppliers.
Possible Reasons For This:
a. They bid the job too low (inaccurate estimates) and at some point they realize they don’t have enough money to finish the job so they work until the next payment or ask for money ahead of schedule and then disappear.
b. They caused damage and do not have the proper insurance to cover the claim so they walk-off, cut their losses (especially if the damage is more than the potential profit on the job) And they don’t pay their help. Sometimes they just don’t want to use their insurance because they have too many claims filed against them already and their policy will be cancelled.
Unfortunately, there are not a lot of contractual clauses to provide effective legal recourse if this occurs. Here is where your due diligence pays off in properly investigating your contractors before making your final selection (how to select a contractor). Because we hold your money in escrow you do have the ability to recoup any loses. We have a perfect track record and have never walked-off a job.
3. Major Delays
This is another big complaint we hear about contractors. It is frustrating to live through a project that often doubles or triples in length of time. It creates a very stressful and therefore unhealthy environment, negatively impacts the contractor/homeowner relationship to a point of hostility, and creates hardship on your part especially if the completion of the project was planned around a specific event in your life. It also causes greater financial hardship due to displacement or inability to fully use your home. Even the best job is soured when needless delays occur.
Possible Reasons For This:
1. One reason may be that a sub-contractor does not show up as scheduled and the contractor, because of a poor or missing agreement with the sub, has no control or re-course and can’t hold them accountable to the job.
2. The contractor is short on money so he bounces back and forth from another profitable job to help cover his expenses.
3. He may have overscheduled himself and does not have enough forces to handle all the jobs so rather than walk-off your job he bounces back and forth, sometimes with weeks passing before you see him again.
4. He may have a problem with another job and has to leave yours to finish the work.
5. He may need to start another job to get a down payment to keep the cash flow, because he bid your job too low.
6. He is a poor manager and does not properly plan, schedule or order ahead, so delays are caused at each milestone of construction.
1. We provide “Guaranteed Completion Dates” in our contracts. There are also penalties written into our contracts so we are financially penalized for every day that we go beyond the completion date if we are responsible for the delay.
2. The estimating system that we use allows for accurate pricing so we don’t underestimate the cost of your project. This allows us to stay solvent so we don’t have to play financial juggling games.
3. We have key people in place to handle any warrantee work so we can make repairs as needed to past projects without interruption of your job.
4. We pay more for qualified workers so we limit our exposure due to incidental damage. There is rarely a need to go back to past jobs for repairs.
5. We only take as much work as we can handle with the workforce we employ, which can be proven by speaking with past customers and checking our performance record with the BBB or consumer affairs department.
4. Surprise Extras
Hidden costs, up-charges, and cost overruns
Many times a homeowner enters into an agreement with a contractor assuming that the estimate is a firm price. Unfortunately, they don’t read the fine print and the contractor has the ability to charge for items not spelled out in the contract. Frequently, the contractor takes advantage of unforeseen circumstances and racks up large additional costs that should have been included in the initial estimate.
Secondly, most homeowners are not experts in construction and do not know the right questions to ask to compose a detailed estimate or to know when something is missing, and again the contractor has the opportunity to take advantage of the situation. These extras turn out be worse than initially selecting the higher bid because you are not prepared to quickly secure more financing and then big problems ensue. If you were better informed you would have had the opportunity to redesign your project to make it more suitable for your budget.
There are certainly going to be times that additional costs are legitimate. Sometimes existing problems with the home are only found after the work begins, but it should be the contractor’s responsibility to alert you to suspected possible circumstances prior to the start of work.
Reasons For This:
1. Some contractors do this unintentionally. They don’t know how to prepare an estimate and don’t ask the right questions so they miss too many things.
2. Many contractors use this as a ploy to get the job because they are the low bidder. They know that they can make up their shortcomings on extras and change orders. In fact this is so prevalent that the industry has coined a term for it called “making the profit on the back end.” Unfortunately, it has become an accepted practice.
1. Our contracts clearly indicate potential circumstances in which unforeseen site conditions may elicit additional costs. We identify these conditions and can provide some ballpark pricing of the potential costs for such an occurrence. This allows you to budget some additional funds if needed or reassess your scope of work.
2. We can put a cap on the total amount charged for unforeseen extras which help limit your liability.
3. We only charge straight time and material for unforeseen issues with no profit mark-up. We are not looking to make our money ìon the back endî but rather are trying to help you through by limiting your added expense.
5. Shoddy Contractors and Inconsistent Workmanship
It goes without saying that this is the number one complaint we hear from homeowners regarding contractors, although over 95% of these grievances never get filed with the BBB or other supervisory body. Sometimes the complaints will be about small but numerous workmanship deficiencies, or work practices which are not enough to justify a formal complaint, but they are certainly enough to sour the relationship. Other deficiencies in workmanship are so severe that they make the finished result ineffective, aesthetically unappealing, unsafe, and doomed for product failure.
Possible Reasons For This:
1. Does not pay the wage needed to attract and retain competent craftsmen.
2. Hires the least expensive help to keep his expenses as low as possible so he can be the lowest bidder to get the work.
3. Does not care enough about quality and is only interested in finishing quickly because the sooner he finishes the more money he makes per day.
By reading our solution I believe that you will understand and appreciate the level of commitment toward preventing this pitfall through our management strategies and supervision protocols.
AND HERE ARE EIGHT OTHER CONTRACTOR SHORTCOMINGS
YOU GET WHAT YOU PAY FOR – THE REAL COST OF DEALING WITH THE LOWEST BIDDER
1. No Service After Completion of Jobs for Needed Addition Repairs
A big frustration for many homeowners is trying to get their contractor back after a job has been completed to make repairs or adjustments. Many times the relationship is severed before the job is completed and getting them back is not even an option.
Possible Reasons For This:
1. The contractor knows the problem is worse than the homeowner is aware of and can’t afford or is not willing to spend the money to correct the problem.
2. They are not capable of making the repairs themselves and don’t have the money to pay another person to fix the problem.
3. They are on another job and can’t leave that paying job to fix your problem (they will lose the day’s pay or more). They make so little that they must get the monetary draw each day.
2. Unsafe Work Environment
Often overlooked by homeowners is the value that a contractor places on job safety. This should be of extra special concern when they are working in and around your home while you are living there. It could simple things such as protecting the home from airborne allergens or toxic fumes to safeguarding the tools from your children and pets, all of which can quickly turn a pleasant experience into a nightmare.
Some examples are:
- Dangerous off-gassing fumes from high VOC products
- Unsafe scaffolding and subsequent falls
- Injuries caused by falling objects
- Nail punctures and other foreign objects in feet and tires
- Falls into open trenches
- Poor interior protection from elements and subsequent damage
- Leaving the home unsecured and vulnerable to break-ins
- Injuries to employees, neighbors, etc. and subsequent lawsuits caused by these unsafe work environments might have to be shouldered by you if the contractor does not have adequate insurance to cover these claims.
We have protocols in place that create a safe working and living environment.
3. Destruction Of Property
Unfortunately, no project runs perfectly and there is always a risk of damage to your property. Accidents happen. You hope that your contractor is willing to repair the damage or carries the proper insurance to cover these damages. If not, the result is that you usually absorb the cost of the repair and sometimes lose irreplaceable items. These accidents tend to occur more often with low budget outfits that have:
1. Inadequate or no safety training for their staff.
2. Little or no safety protocols observed.
3. When working very cheaply you tend to try to work fast and are looking to cut corners, so safety tends to be a low priority.
4. Some people just have little respect for the personal property of others.
We have protocols in place to reduce this risk.
4. Messy Jobsites
An inferior contractor is not willing to spend the extra money or time that it takes to properly protect your property from damage and has even less concern for cleanliness. Oftentimes, shrubs are damaged, tree limbs are broken, the lawn unnecessarily destroyed, work debris blowing onto neighbors property, food waste left exposed attracting rodents and insects, cigarettes butts spread all over the property, trash buried in the walls and floors during construction, dust allowed to spread into non-work areas, stepping over your personal items rather than taking the time to relocate them.
Sometimes there are workers with poor personal hygiene and habits. Some people are willing to tolerate this behavior to save money but we believe that this is unacceptable and go to great lengths to provide a clean and safe working and living environment.
We have policies in place for this and penalties for non-compliance.
5. Over Promise and Under Deliver
It may be difficult to separate the fluff from the real stuff. A slick salesman may paint a pretty picture of what they can do for you. Routinely, low bidders will have many ways to save money including cutting corners and they are good at talking around a situation to justify or rationalize their inadequate work.
We have protocols in place to inspect and correct deficiencies in workmanship.
6. Bait and Switch
You may have thought you found a contractor you can trust, you have a good feeling about this person and have faith in the person selling you the job but once it starts you don’t ever see that person again and the people who are in your home are not at all what you expected. There are many contractors who do not have an ongoing working relationship with their workers and they may have in fact been hired for the first time for your job. Worse yet, you may find yourself having to schedule tradesmen, point out defects, and clean up after them.
Our management and supervision policies and protocols prevent this from occurring.
7. Unethical Practices and Behavior
The wrong people in your home can lead to disaster. We are always hearing horror stories from customers with unscrupulous contractors. Some of the problems include rude and threatening dispositions when confronted with a customer’s concerns, pressuring homeowners into early payments or extra money without entitlement, theft of personal property and money, and even violent altercations. Regularly, we have heard about contractors who sabotage the job because of a falling out with the homeowner.
We have hiring policies and ethics standards that prevent this type of person from being in your home.
8. Poor Managers
Even good craftsmen can falter and fail in this business if they are poor businessmen or managers. Many guys can handle a small project when multitasking is not required but once more than one project is running simultaneously or if other issues arise with the current project, they falter.
It is difficult to wear many hats and the responsibility proves to be overwhelming, especially if they do not have programs in place to help with this coordination. Subsequently, material is not ordered on time, they forget to schedule tradesmen, and countless other details that cause poor working relationships, major job delays and cost overruns which they pass on to you. Because they don’t have time they do not stay abreast of the new building codes and practices as well as new product availability and product installation procedures, therefore the advice that they give you can be inaccurate and or costly.
We have sophisticated management tools and protocols to effectively manage every aspect of your remodeling project.
It is a simple trade to get into with good potential income. Certainly most contractors are trying to do the right thing but although they may be good craftsmen most failures result from poor business management rather than lack of technical skills. They don’t know how to operate a business and it fails and it is the consumer who pays the price.
In fact it has been reported that 90% of businesses in this industry fail, and most within the first five years. Additionally, as reported by the Better Business Bureau, every year the Home improvement industry is among the top three industries for consumer complaints and it is usually first.
I am sure that you have some of your own or know of at least one person that has had a terrible remodeling experience. Despite the fact that the home improvement industry is a leader in customer complaints, based on my personal survey over the years of people that have had problems with their contractors, which were often times horrendous, less than 15% tried to take any legal action and less than 2% reported their complaint to any authority.
Although most remodeling projects tend to cost more than a new car, most consumers spend less time choosing a contractor than they do choosing a car. It is an expensive project and there are always worries about workmanship and the final results. Taking the time to plan what you want and working with an experienced, professional remodeler are essential steps you should take to ensure that you get what you pay for with the least amount of worry.