How To Shop Around For a Good Contractor: And What You Need To Know

If you’re reading this article, then you’re probably in the process of renovating your home or rental property, or are at least thinking about doing so.

Dealing with contractors can be complicated. How do you go about finding the right one? How do you know they’re good? Are they charging too much? Will they do a good job? Will they be easy to work with? Will they give you the run-around and mark up their prices? For good reason, these are questions that you’ve probably asked yourself. 

Aside from the obvious Google or Yelp reviews that you can read online about a contractor’s work, what are some other ways that you can see if a contractor will be a good fit for your project?

Before you read on, I should mention that my favorite quote is, “Trust, but verify.”

Here are some suggestions:

1. Ask for referrals: Or contact people online who have left reviews. Let’s face it, sometimes companies write reviews for themselves, or get friends and family to do the writing. By reaching out to referrals and asking direct questions about the quality of work, and even more important, if the referral would use the contractor again, you will get a better idea of what to expect from a contractor. Or simply ask the contractor for a referral. Once again, ask direct questions to gauge if this really is a referral (a former client) or if it’s just a friend of the contractor pretending to be one. 
2. Get more than one estimate: Never agree to pay for an estimate. This is just part of a contractor’s job. Get 2-3 estimates at least. Get the estimate itemized, each task on a separate line, and separate materials and labor to avoid being up-charged. Once you have several estimates, compare them. Look at each item and see which contractor will do it for cheaper, which will do it quicker. Like one contractor’s price, but another contractor’s personality better? Then, use the lower estimate to negotiate with another contractor to bring down the total cost of the job.
3. Ask for pictures of previous work: Nothing is better at showing how good a contractor is at his job than a before and after photo. Many contractors with an online presence will happily post photos of the before and after work they have done (that is, of course, if they are proud of their work). It is a red flag if a contractor does not have any photos of his work to show you.
4. Do an internet search: Look up the contractor’s name and the name of his/her company. Make sure that the contractor is licensed. I don’t just mean look at his website where it obviously will say he is. Look up the county/city/state records that prove that he is licensed. For permitting purposes, it is probably best that you use a contractor that is licensed in the city where the work will be done. I’ve run into permitting issues because a contractor we used was not licensed in our city, but rather, he was licensed in a county about 45 minutes away.
5. Talk to them: Obviously, right? But I mean more than just talking about the job that you have in mind. Talk to them about their employees, their business, their subcontractors, their schedules, their past jobs, etc. Here you want to get a feel for who this person is, what it would be like to work with them, and what their employees might say about them. See what they have to say about past jobs they have done. The key here is to also educate yourself. Have them walk you through a job that they have done, such as a kitchen remodel. Let them tell you what goes into the work. If they are detailed, accurate, and confident, then that is a good sign. If they skimp on the details, lazily describe what needs to be done, and do not leave you with much to work with, then it is probably best that you move on to another contractor.
6. NEVER put a large amount of money upfront: Depending on the total cost of the project, 10-15% upfront for materials is reasonable. If any contractor wants the full amount up front, or even half, move on. Insist that you pay the total project cost on an itemized basis. For example, let’s say you have flooring, painting, kitchen remodel, and shower remodel that you are requesting the contractor completely. Pay the 10-15% up front, then agree to have the next payment due when the flooring is complete, then the payment after that once the painting is complete, and the last and final payment once the shower remodel is complete and the job site has been cleaned up. This will ensure that the work is done properly, incentivizing the contractor to finish the work on time and that neither of you is being taken advantage of.

Many real estate investors claim that dealing with contractors is probably the hardest part of this business. And as someone who has dealt with a number of them, I say that that statement isn’t too far from the truth. Although real estate is a difficult business, working with a contractor who is not reciprocating his half of the agreement makes it all the more difficult.

For me, trust is probably the most important thing in any business relationship, whether that relationship lasts only a few days in the form of a shower remodel or whether it lasts several decades as a business partnership. It’s important to me that I get as much information as I can about the person I’m working with before I sign any contract to work with them.

I’m a man of my word, so it is important to me that the person I choose to trust is a person of their word as well.

If you follow the steps above, you will have a much clearer picture of who you’re working with, almost guaranteeing that the process will move along smoothly. You don’t want to be stuck with someone who starts demolition, and then suddenly stops showing up. You don’t want to be left with work that, though complete, looks subpar. And you definitely don’t want to give someone the full amount upfront, only to find out that they were never a licensed contractor to begin with.