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How
to work with a contractor Starting a home
renovation project is exciting. But working with building
contractors can mean big headaches: a two-week delay between
removing your old bathtub and installing a new one; a kitchen
island that ends up costing more than expected; or, worst of
all, the contractor who disappears with your down payment and
your dream.
Fortunately, there are ways to protect yourself from delays,
cost overruns and outright fraud. Follow these tips for hiring
and working with a contractor.
Where to look
- you can get matched with a
prescreened contractor in your area through companies such
as ServiceMagic. You submit a request online that
includes details of the project or work you need done.
ServiceMagic gets back to you with three or four service
professionals, as well as ratings and reviews from
customers, and you pick the contractor you want to work
with.
- you can also ask friends
or family members. Ask around, especially if you know
someone who recently had a similar project done and is happy
with the result.
- if you can't get a
referral, look for a contractor who is a member of a local
builders' association or similar industry group.
Using the phone book as a source isn't a good idea because
some states only license electricians and plumbers, so
anyone with a van and a toolbox could call himself or
herself a builder.
- get references and
take the time to follow up on them. Ask the contractor's
previous clients whether their jobs were completed on time,
if there were any surprises, and if they would use the
contractor again.
- When you ask for quotes,
be explicit about what you want done. The more
specific you are, the more likely you are to get reliable
quotes.
How to choose
- get quotes from at least
three contractors. It's standard, and the competition
will prevent contractors from giving you an estimate based
on what they think you're able to pay.
- don't automatically pick
the lowest quote. Sometimes a low-ball offer
indicates inexperience, and that can lead to cost overruns
later on.
- carefully compare the
quotes, especially the description of materials. Be
on the lookout for terms like "or equivalent." You
should have the right to approve any substitutions if a
material specified in the quote is not available.
- be prepared to wait a few
weeks or even months for the right person. It's
tempting to take the guy who can start right away, but good
contractors are often busy.
- pick someone with whom you
have a good rapport. Remember, this contractor and
his or her crew will be coming into your home -- maybe for
weeks -- so you're going to have to get along.
Get it all in writing
- always draw up a contract
before the work begins, and include a start date and
estimated completion date. Often you can include a clause
that gives you a discount if the work isn't done on time.
- make sure your contract
specifies that any additional charges or expenditures must
be authorized by you in advance. Cost overruns
happen, but you should not be surprised when you're
presented with the bill.
- ask if the contractor is
fully insured, and ask to see the papers. Otherwise,
you could be on the hook if one of the workers is injured on
the job or if the crew damages your property.
- specify that the
contractor is responsible for getting the necessary permits
for the work.
- obtain a written guarantee
of the workmanship and materials.
- agree on who's responsible
for clean-up and garbage removal.
Paying the piper
- your down payment
is only an assurance to the contractor that you won't hand
the job to someone else before the start date, so it needn't
be larger than 10 percent of the total cost of the job, up
to a maximum of $1,000. Some states limit the amount the
contractor can ask for up front, so know your rights.
- stagger the remaining
payments and tie them to specific stages of the
project, so you can hold back if the work is progressing
slowly. Outline this payment schedule in the contract.
- don't pay cash.
While sometimes paying cash can get you a discount, you
should never do business with someone who insists on only
cash payments. It's recommended to pay by check and get a
receipt.
As your project moves along, ask for regular progress reports
and keep a good line of communication open with the contractor.
If you don't know one end of a hammer from the other, you might
consider hiring a home inspector to keep an eye on things.
A
home equity loan or line of credit is an inexpensive way of
financing a renovation project. Some lenders will advance you as
much as 125 percent of the appraised value of your home, less
existing mortgages. Request a home equity loan now and get up to
four quotes from competing lenders.
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