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Are you planning a major home improvement project in the near future?

If so, you're probably in the market for a contractor. Finding the right professional to handle such a project can be tricky; trickier still is getting a great job at a fair price.

Case in point: A few years ago, my neighbor hired a contractor he knew socially to do a major home remodel. The contractor agreed to work on a "time and materials" basis, charging an hourly rate and passing along expenses for plumbers, electricians, and other workers. My neighbor agreed to pay for all materials. This deal sounded good, though the details were a bit fuzzy.

Try these techniques:

Choose a contractor through personal recommendations. Get referrals from friends or neighbors who have had similar work done.

If you can't find a personal reference, ask local building supply dealers to recommend reputable contractors. Try online services such as Improvenet.com—but be sure the service has a strong method of certifying their contractors. As a last resort, check the phone book.

After you've put together a short list, call and pre-qualify several contractors. Find out whether each one is licensed and insured for worker's compensation, property damage, and personal liability.

From each contractor, request names and phone numbers of a few satisfied customers. Call these references and ask to see the contractor's work. Don't be shy. Most people who've recently remodeled want to show off their homes, and they'll go out of their way to help secure another job for a contractor they like.

Choose at least three contractors for a formal bid request. Give each one the same plans and specifications. Generally speaking, a bid that looks too good to be true probably is; if one bid is much lower than the others, suspect inexperience or desperation (the latter isn't necessarily a problem).

Chemistry with your contractor is critical—this person may be in your midst for several months, and you may haggle over difficult issues.

Ask whether the contractor will be working only on your job or managing multiple projects at the same time. Find out whether the contractor will supervise your job on site or hand it off to a foreman.

When you've made a selection, ask to see the contractor's license and double-check insurance coverage.

Hiring a Contractor


Increasing your property value often entails remodeling. Whether you have a fixer-upper or a great house that you plan to stay in indefinitely, you'll probably hire a contractor sooner or later to finish the basement, remodel the kitchen, or renovate other rooms.

Decisions on home improvement should be made in a judicious manner. If you want to recoup your investment, choose projects that are likely to add value to your home, such as a new kitchen or an extra bathroom. Although it's tempting to hire the contractor who submits the lowest bid, there are other factors to consider:

  • Experience
    The failure of most fledgling contractors can be blamed on poor work habits and shoddy business practices, according to the Small Business Administration. Choose a contractor with a minimum of five years of experience.
  • License
    Most contractors are licensed by the state. While a license alone doesn't guarantee an excellent contractor, it is one way to weed out unlicensed amateurs. Some states also record complaints filed against contractors—you can look these up using the contractor's license number.
  • Bank account
    A contractor with five years of experience and a solid record of bank deposits will, in all probability, stay in business long enough to complete your project. It also indicates that the contractor has sufficient capital and doesn't need your business to pay this month's bills.
  • Insurance
    The contractor should carry workers' compensation and general liability insurance. Lack of insurance could leave you liable for any injuries suffered on the job. Get copies of policies from the contractor's insurance company.
  • Workmanship
    Many contractors carry photo books to show samples of their work. But the only way to judge the workmanship is through an on-site inspection. Ask the contractor for names of recent clients, and arrange to examine projects similar to yours.
  • Teamwork
    The best contractors are those who care about the project as much as you do, and who can work around your schedule and your household's routines. If you want to be involved in every decision, hire a contractor who's comfortable with close supervision. If you want to leave the details to an expert, hire a contractor whose decisions you will trust.

The Art of the Bid
After you have selected several candidates for the project, the next step is to get bids from the contractors. To get comparable bids for the project, write out your project's specifications, including sample building materials and fixtures, and make copies for each contractor submitting a bid. The more detailed the specifications, the easier it will be to compare bids because all the contractors will be using the same fixtures and materials in their cost breakdown.

Project Specifications
You may want to hire a designer to create project specifications if you're not comfortable doing them yourself. Specifications for a kitchen remodeling project, for example, might include cabinets, flooring, sinks, faucets, appliances, countertops, doors, windows, and any custom carpentry specifications, such as built-in shelves.

Cost Breakdown
Most contractors have their own breakdown sheets, but you can also provide one to make comparing bids easier:

  • Expenses
    Itemize tasks such as subcontractor bids, building permits, and finish carpentry.

  • Materials
    Specify the costs of all building materials.

  • Fixtures
    List the costs of all fixtures to be installed.

  • Labor
    Calculate the cost of labor. (Note that subcontractor labor should be included under Expenses.)

  • Total
    Add the totals from the four categories (expenses, materials, fixtures, labor) to arrive at an estimated bid.

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