Selecting A Remodeling Contractor

Be informed with your choice for a project manager

Before hiring a reputable remodeling contractor to supervise your renovation project, you would be wise to inform yourself of just what sort of criteria is required to designate someone as "qualified" from within the remodeling industry.

Like most professionals, the vast majority of contractors are honest, hard-working men and women who want to provide a good service at a rate that's reasonable for both the client, and themselves.

There are, however, those individuals who would be less than honest in their dealings with you in regard to your remodeling project. Especially one with a big dollar amount. In your evaluation, look for tell-tale signs that will give you some indication that either they are simply not qualified (no real experience), under-funded (general personal appearance/condition of vehicle/no tools to speak of), or just plain dishonest (vague work history/overall negative reputation).

What To Look For When Evaluating Remodeling Contractor Candidates

Always seek out references. Have they done any work in the nearby area where you can see what they've done? If so, politely ask the owners how they felt about the experience with the remodeling contractor. What did the work look like? Check the local Better Business Bureau (BBB) to inquire of their status, and if there have been any complaints filed against them.

Check to make sure they are properly insured with at least a minimal liability coverage ($250K). If a remodeling contractor has multiple employees, ask if they have worker's compensation coverage (in case of an accident sustained while working on your job). If you're not sure what to do, give your insurance agent a call, and have them give you advice on how to proceed with any insurance-related questions you have.

Are they able to obtain permits that might pertain to your particular project? Most states around the country require contractors to be certified in some way before they can have the priviledge of obtaining a permit. Usually, a contractor will have to attend yearly on-going training classes pertaining to all manner of construction, safety, and other related fields for retaining any license and/or certification.

General appearance is always a good barometer of the type of person you would have running your job. Does he/she present themselves in a professional manner? Does their vehicle look clean and respectable as well? Can they speak to you in a clear, concise manner, and in way you can understand when discussing the particulars of the remodeling aspects?

You will be dealing with this person very closely for a considerable amount of time. You need to feel comfortable with him/her at a high level.

Down Payment. Be very wary of anyone who asks you for a lot of money up front. Never enter into a contract whereby you put down 35 - 50% of the total project cost. A reasonable down-payment would be 10% to 15%, followed by preset (agreed-upon) draws.

"Get It In Writing". Make sure that all estimates, change orders (a change from your original plan), invoicing, and guarantees are in written form, specifying in detail what the scope of the job will be, and for how much.

And lastly, in case of an emergency, will you have the ability to get in contact with the contractor (at any time of the day or night) should the need arise. The last thing you would need is for some unforeseen disaster to happen, only to hear a recorded voice say that so-and-so "can't come to the phone right now, but please leave a message, and we will get right back to you"!! ....

Depending on the size of your remodeling project, you could spend a lot of time with a remodeling contractor, so be prepared to do a little research beforehand. Many people become stressed out because of lack of communication between the client and the remodeling contractor over issues ranging from the (seemingly) mundane, to the very important. Demand that the lines of communication stay open and clear at all times.

Types of Contracts

After finally selecting a remodeling contractor to supervise your remodeling project, it's time to enter the contract negotiation. There are a few generally accepted ways to negotiate a contract with someone for purposes of managing your remodeling project. You can hire a general contractor to basically handle the job themselves from start to finish. Or, you could be the "GC", and manage the job yourself.

If you are selecting a general contractor to completely supervise your project, consider these options:

Lump-Sum Contract
This is when a remodeling contractor charges one base price for the total job, from beginning to end. He is responsible for all aspects of the job, including obtaining and payment for all materials, installation, and total labor costs. The total price will generally include a mark-up of anywhere from 15% to 25%. You will make payments (draws) to him at various times during the remodel. Hold the last draw (5%) until everything is completed to your satisfaction.

Cost-Plus
Another popular type of agreement when selecting a general contractor, as this is when a contractor is paid to manage the job only. He will break down all sub-contractor, materials, and any other costs associated with the project. You then pay for all materials and their subsequent delivery, and all labor costs (to the GC). When the job is completed, you then pay him an agreed-upon management fee for his time. Excellent for keeping track of all total costs, and how dollars are being spent.

When hiring sub-contractors such as electricians, plumbers, framers, etc., consider one of the following options:

Time-and-Materials
This pertains to the type where the contractor is expected to provide the labor and materials. Small contractors like to employ this type because of the flexibility with which they can determine the time the job would actually take. If it's just a one, or two-man operation, he can then more accurately assess his hourly rate, which in turn, helps you have more precise costs for your budget. His mark-up (if any), is generally included in the hourly rate.

Make sure to ask that the hourly rate (or total labor charge) is the final cost for his services. In other words, there are no extra fees or surcharges added on upon completion of the job.

Hourly Rate
This is probably the most popular choice when selecting a sub-contractor. You agree to an overall hourly rate (in most cases he will already have a standard rate), and also agree to cover all material costs as well. Also ask him to give you a reasonable estimate of total time (labor) involved for all necessary installation, both rough and finish stages, and a materials list (including cost of delivery) and when he will need those items delivered.

In this option, you get more control over how the money is spent, and where it's going. Highly efficient for management, and budgeting purposes.

Again, as was the case in Time-and-Materials type of contract, make sure the hourly rate includes any mark-up (it should be included) he might require. You just don't want any surprise charges and fees added on at the end of the job.

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