How to Find a Contractor Who Won't Pilfer Your Life Savings

There are thousands of honest contractors out there who will do the job they are hired to do without pilfering your life savings; however, there are some out there who would be more than happy to charge you exorbitant rates for poor quality work. This is why it pays to be cautious when hiring a contractor to work on what is probably your most valuable asset-your home.

Specific things to look for in a contractor include:

Licensing

There are approximately 36 states that require general contractors to be licensed, but almost all states require licensing for electrical and plumbing contractors. To check the laws for the state in which you live, you can visit your state government's official website or contact your county's building inspector. If your state requires that contractors be licensed, you will be better off finding a contractor who complies with the state laws. This will not only increase your chance of finding a contractor who is both professional and reputable, it will also give you an opportunity to check with the Better Business Bureau and local authorities to see if there have been any complaints lodged against the license holder.

Experience

It is a nice thing to give new businesses a chance, but depending on your home improvement project, it may not be the smartest move you can make. In certain cases, you will almost always be better off hiring contractors who have past experience with the types of jobs that you are hiring them to do. To determine whether or not contractors have this experience, ask them how many jobs they have completed and how many of them were similar to your project. Once you have their answers, ask them for references to back them up. An experienced contractor should be able to supply you with the names, addresses, and telephone numbers of at least three previous clients.

Insurance

Unless you want to be financially responsible for damages or accidents that occur on the job site, you will need to find a contractor who has his own insurance. Every professional contractor should have personal liability insurance, property damage insurance, and worker's compensation coverage, as well as the documentation to back it up. If the contractor can't provide you with documents showing that he has coverage and that it is current, you should be wary about working with him.

Clear Documentation

Getting an estimate from a contractor is great, but getting a written estimate is even better. A detailed written estimate will eliminate confusion later on, and could save you thousands of dollars in the long run. Ask the contractor to be as detailed as possible when writing the estimate, and make sure that the amount quoted is the total amount he plans to charge for the job. If you agree to the estimate, you can draw up an official contract at a later date for extra protection.

Red Flags You Can't Ignore

When hiring a contractor, there are a few red flags that simply cannot be ignored. If any of the following applies to the contractor you are thinking about hiring, you may want to consider other options:

• The contractor asks you to get the building permits
• The only type of payment that is acceptable is cash
• The contractor is unable to give you an estimate in writing
• You are asked to pay for the entire job up front
• The contractor is pressuring you to finance the project through a specific lender