BBB suggests that you obtain three written estimates or bids for the work you are planning. Estimates should be based upon the same set of specifications and materials to be used. Ask the contractor for local references and inspect finished projects. Check to see if the contractor is properly licensed, bonded and has met insurance requirements in compliance with State regulations. Check with the building and zoning authorities to determine what permits you need to proceed with your project. Be sure to include all the terms, conditions, warranties and oral promises concerning the work or project in a written contract. Read and understand completely the written contract BEFORE signing. Never sign a blank or partially completed contract. Typically, a down payment of 30 to 50 percent of the total contract price is made before the work is started with remaining payments to be made after completion of each phase of work; final payment should not be made until work is completed and you have inspected the work. Don't sign a completion certificate for the job before it has been inspected and properly completed as agreed to in the contract. Do not pay for the entire job in advance or pay cash to a salesperson or contractor. You might want to consider inserting an arbitration clause into the contract as a precaution to resolve any disputes that may arise and to enforce your warranty without litigation.
In addition, make sure that the written contract includes the contractor's full name, address, telephone number and professional license number. The contract should also include the agreed upon starting and completion dates, and the method for debris and material removal once the job is finished. If the contractor arranges financing for the work to be done, be sure that all financial terms are understood, especially if a second mortgage on your home is used as security for the project, BEFORE signing.
Always keep copies of all documents you sign and copies of receipts for materials purchased for future reference.