Selecting a building contractor for new home construction or a home remodeling project is serious business. Chances are that a home improvement project is going to cost some good bit of money. This is because things must be done professionally.
For example, cabinet installation must be done properly with respect to plumbing fixtures and electrical circuits following the local building code. Also, a project time line schedule has to be established adhered to as close as possible in order to minimize inconvenience to the homeowner.
The first step is to completely understand how to protect yourself and your property against having a mechanics lien filed against you for failing to pay on schedule. The process and steps are a bit more involved than most people think.
Use a Checklist to Select a Contractor Builder
The process should be done methodically to vet the construction companys background. So what exactly is the process? Following are the items that need be considered after coming up with a short list of potential contractors.
Verify the Company History
Ask how long the building contractor been conducting business. Has it always legally operated under the current DBA or name?
Any business that alters its name should draw questions. Its usually done to get a clean bill of health with the BBB (Better Business Bureau) or to lower insurance rates. Both of these situations are show-stoppers.
Does the business maintain a business address? Does the business work out of a garage and pick up truck? These are not necessarily bad things (Ive done both of these things myself to keep overhead down), but verify the reason.
Does the Building Contractor have a Good Reputation in the Area it Serves?
The best way I have found to answer the reputation question is to try Angies List to see what homeowners in your area have to say about companies they hired.
This is well worth the small price it costs in the long run. A full 15% of the bids I make are for work that has been botched by someone else. The homeowner ends up paying twice.
Its also important to discover the contractors status with the BBB? Complaints are registered for for a variety of reasons; the key thing to be sure that theyve been resolved to customers satisfaction.
Ask for a list of references from prior construction jobs that are similar to the one youre considering whether its a backyard swimming pool, refinishing a wooden deck, a Jacuzzi installation, a paint job, or a re-roofing project.
Actually contact the references and look at the work if possible. Inquire whether the tasks were done properly and on agreed on schedule.
Determine whether the construction crew was courteous and if they cleaned up behind themselves at the end of the day.
Find Out What Business Model the Contractor Uses
Most contractors work on a version of a business model. Do they use their own work crews? Do they hire sub-contractors? Once again, this is not a good thing or bad thing. it's often a question of the scope of the work the company takes on.
A high-quality construction company will use their own crews, but will hire subs when needed for niche work that calls for unique building trade licensing. This is usually trades such as electricians or master plumbers.
Get Proof of Insurance and Bonding
Sufficient contractor insurance and bonding is important for large or expensive jobs, but exceptions can be made for very minor handyman work such as painting touch-up as long as the handyman service passes the Angies List test.
Why is insurance critical? Both general liability and workers compensation both fall in the insurance category. Why should you as a homeowner worry about workers compensation insurance?
This is why; if a worker becomes injured on the job (think loud power tools, tall ladders, back strains, etc.), you as the homeowner can be the target of a lawsuit!
Determine if the Company is Registered with a Construction Commission
Is this registration mandatory? It depends on the state or the geographical region the company operates in. Take Texas, for example.
When work over $20,000 USD in involved or for new construction, registration with the Texas Residential Construction Commission (TRCC) is the law.
But even construction contracts of lesser dollar amounts, registration is recommended since it demonstrates a level of credibility and professionalism.
Two Final Tips Prior to Signing a Construction Contract
Never agree to any up-front payment unless its a handyman job like installing a ceiling fan and the money just covers materials. This is why you see homeowners with the handyman at Home Depot.
Asking for up-front labor payment might be a sign of a fly-by-night contractor and it gives the company little incentive to complete the project or deliver quality product.
Either finance the project or phase the job and dole out the payment in the form of draws after you receive invoices, inspect the progress, and sign off on the work accomplished.
Dont feel pressured to sign on the dotted line on the day a bid is submitted to you. Theres no reason a bout of buyers remorse.
Anyone thats bought a flashy new car or big plasma TV knows what this is all about.