How to Hire a Contractor You Can Trust
The contractor you choose matters more than any material you select. Here is how to vet one properly, and what belongs in the contract.
Fact-checked and reviewed by a licensed general contractor by Tomas Garrity. Read our content review process.
Bad renovations are usually not caused by bad materials. They are caused by choosing the cheapest bid, paying too much up front, and working without a written scope.
Verify before you meet
- Confirm the license number directly with your state or local licensing board
- Ask for a certificate of insurance sent directly from the insurer — general liability and workers' compensation
- Search court records for judgments and licensing board complaints
- Ask how long they have operated under the current business name
- Confirm they pull permits themselves and do not ask you to pull them
Compare bids properly
Give every bidder the same written scope. Then compare line by line: materials specified by brand and model, allowance amounts, who handles demolition and disposal, permit responsibility, timeline, and payment schedule. A bid that is dramatically lower usually excludes something the others include.
Check references the useful way
Ask for three references from projects finished six to twenty-four months ago — recent enough to remember, old enough for problems to surface. Ask each of them: did the final price match the contract, how were change orders handled, did the crew show up consistently, and how did they respond to a problem after completion?
What the contract must contain
- Detailed scope of work with materials specified
- Total price and a payment schedule tied to milestones, not dates
- Start date and substantial completion date
- Change order process requiring written approval and pricing
- Allowances stated in dollars for each unselected item
- Permit responsibility
- Lien waivers from the contractor and all subcontractors at each payment
- Warranty terms on workmanship
- Cleanup and disposal responsibility
- Dispute resolution process
Payment schedules
A reasonable deposit is 10 to 30 percent, and many states cap it by law. Payments should follow completed milestones, and a final retainage of 5 to 10 percent should remain until the punch list is done and final inspection passes. Never pay in full before completion, and never pay in cash without documentation.
Warning signs
- Pressure to decide immediately, or a discount that expires today
- Request for a large cash deposit up front
- No written contract, or a one-page contract for a large project
- No physical business address or verifiable license
- Unsolicited door-to-door offers, especially after a storm
- Reluctance to provide insurance documentation from the carrier
Frequently asked questions
How much should I pay a contractor up front?
Commonly 10 to 30 percent, and some states cap deposits by statute. Payments after that should follow completed milestones.
What is a lien waiver?
A signed document confirming a contractor or supplier has been paid and waives the right to place a mechanic's lien on your property. Collect one with each payment.
Do I need a permit for my project?
Structural changes, electrical, plumbing, mechanical, and most additions require permits. Cosmetic work usually does not. Your building department will answer in a phone call, and unpermitted work causes problems at resale.
Editorial note. This article is educational and is not legal advice. Real estate contracts, disclosure requirements, and landlord-tenant rules differ by state and locality. Consult a licensed attorney about your situation.
