The BBB suggests that you solicit two or three bids for any remodeling work you are planning. Don't automatically accept the lowest offer. Make sure all bids are based on the same set of specifications and materials to be used. Ask for references and inspect finished products. Make sure the contractor is in compliance with all local licensing, bonding and insurance requirements and that any necessary building permits are obtained.
Never sign a blank or partially blank contract. Before paying, get a sworn statement that all bills for material and labor have been paid for by the contractor. Typically a down payment of one third of the total contract price is made with additional payments made after completion of each phase of work; final payment should not be made until the work is completed and you have inspected the work.
If the work is to be financed, be sure to have complete details of the financing agreement, especially if a second mortgage of your home is used as security for the remodeling work.