Do your homework before hiring a contractor

  
     
June 13, 2014

Summer is a traditional time for homeowners to do a variety of improvement and maintenance projects. Many people will tackle projects on their own. However, like me, the majority will have to hire a contractor. Therefore, I thought it would be important to review some of the basic rules of hiring a contractor.

The key is to hire the right contractor and have the job done on time, on budget and correctly. Hiring the wrong contractor can not only be very expensive, but also very frustrating.

The first step is to get independent information. I don’t necessarily believe it is independent when a contractor gives me names of previous customers to contact. After all, do you think the contractor is going to provide a name of a previous customer who was not 100-percent satisfied? I doubt it.

Using the Internet, consumers can obtain lots of information from sites such as www.Angieslist and the Better Business Bureau (one of the best sources). The BBB has been around for decades and has a wealth of information at www.bbb.org that is free

It is important to recognize that the BBB has information on members and non-members. Also, members of the BBB do not receive preferential treatment. Members and non-members are judged on the same standard.

Once you’ve selected a contractor, the contract you sign is important. Contracts are not standard and consumers should not sign without reading every word. In addition, don’t assume you can’t make changes to the contract, because you can.

In reviewing the contract, make sure the date due for first payment is spelled out. I am leery of any contract that calls for 100 percent of the money to be paid upfront or even a down payment as high as 50 percent. A 25-percent down payment is more than sufficient.

Make sure final payment is not due until the job is completed. Make sure the contractor has an incentive to complete the job as soon as possible. The contract should state when the project is going to be completed. In addition, consider a penalty provision if work is not completed on time.

home is the single largest purchase most people will ever make. It’s not like an investment you can sell if you’re not happy with it. Your home is where you live. That’s why it’s important to do your homework before allowing anyone to work on your home.

The consequences of hiring the wrong contractor can be devastating. Once you have decided to do a home improvement project, take your time to hire the best person for the job. The contractor may be busy and unable to get to your project immediately. However, the best contractor for the job is generally worth waiting for.

Good luck.

Rick Bloom is a fee-only financial adviser. His website iswww.bloomassetmanagement.com. If you would like him to respond to your questions, please emailrick@bloomassetmanagement.com.