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Homeowners are jumping back into home improvement right now, but too many are skipping an important step before they hire their contractors.
 
A third of the consumers responding to a recent national Angie’s List member survey admitted that they don’t verify license status before they hire. Sixteen percent confessed they don’t fully read the contract before they sign it.

Angie Hicks, founder of Angie’s List, the nation’s premier provider of consumer reviews, said those consumers are risking a lot. Trade licenses are important indicators of quality, reliability and the ability to cover any unexpected injuries or other problems. Contracts literally spell out what the contractor and the homeowner are obligated to do and can either help or hurt you should the job end badly.

“If something goes really wrong with the job, or worse, any of the workers get hurt on the job, the homeowner is on the hook. Reading the contract before you sign it is required,” Hicks said. “There are a lot of great contractors out there, but there are others who are unqualified or untrustworthy. With a little research, homeowners can tell the difference.”

Angie’s List consumers who have had poor experiences with contractors generally complain about not getting calls back when they call for estimates, but especially when things go wrong. Some consumers report their projects dragged out for months when the contractors went silent, leaving the homeowner to find a reliable contractor to do the work at additional cost. Other common complaints are shoddy work.

4 Things You MUST do Before Hiring a Contractor:
 
1.    Get written estimates from at least three potential contractors to compare costs and  timelines;
2.    Check references, trusted online resources, friends and family, to learn about past performance;
3.    Verify applicable license, bonding and insurance status; and
4.    Read and understand the contract before you seal the hiring deal.
 
While Angie’s four steps are the minimum steps homeowners should take, Hicks has a longer checklist that will do more to maximize the chances of a good hire.
 
Angie’s List 13 Tips for Hiring a Contractor:
 
1.    Clearly define your project: Before you begin talking with contractors, read remodeling magazines, search the Internet for information on designs and materials. Even rough ideas on paper give a potential contractor a better sense of what you hope to accomplish and what is required to make it happen.
2.    Management issues: Large projects, especially those that may involve more than three different specialists (i.e. plumber, electrician, carpenter, mason) will go better if you have a general contractor to manage all the various tasks and timelines.
3.    Structural issues:  Projects that eliminate walls, add rooms or otherwise impact the structural integrity of your home, should involve an architect or a structural engineer.
4.    Ask around:  Ask neighbors, friends and Angie’s List about good, local contractors, but don’t hire based on only one conversation.
5.    Check references: Get names of previous customers and find out if they were pleased with the work and the timeline of the project, and if they’d hire the contractor again. Get the names of subcontractors and ask if they work with the contractor often and does he pay on time. If your prospective contractor balks at providing references, find another one. Check with trade associations to learn how your contractor stacks up among his or her peers.
6.    Get estimates: Get at least three written estimates. Documentation is often the best ammunition you have if things go wrong.
7.    Where can I reach you? Be cautious of contractors who give you a post office box with no street address, or use only an answering service. Never hire someone who comes unsolicited to your door and can’t provide you proof of qualifications – especially if he or she pressures you to hire fast and pay cash up front.
8.    License for hire: Some states or cities have no licensing requirements for contractors, which can make it difficult for homeowners to check up on contractors before they hire. Don’t rely on the contractor’s word to know whether his or her license is valid: verify it through appropriate agencies.
9.    Insurance and bonding: Check the status of the contractor’s bonding and liability insurance coverage, too. A good contractor will come prepared with proof that he or she is covered.
10.    Budget and payment options: The typical pre-payment is typically between 10 and 15 percent of the total value of the project. Even the most carefully planned project can change, especially if hidden problems are found. Never pay for a project with cash; always use a credit card so you have recourse in case something goes wrong. Before you sign off and make the final payment, check that the work is complete to your satisfaction.
11.    The contract sign: Don’t assume your contract covers all your needs. Know the details of the contract, as well as how any change orders will be handled. Check that your contract includes a lien waiver, covering payments to all subcontractors who worked on the project. Never sign a blank contract.
12.    Punch list: This is how the contractor will deal with the list of small items remaining to be completed at the end of the job. A good rule of thumb is to determine the cost of those items, double it, then withhold that amount from the final payment, until the list is complete.
13.    Prepare your family for the stress: This is one of the most overlooked, but critical considerations. How will the project change your routine, especially if it’s a kitchen or bath? Where will materials be stored? What are the working hours for the crew?   
         
If you run into problems:
1.    Let the contractor know you’re unhappy. Ask him or her to take specific action to remedy the situation. Angie’s List can also help with its complaint resolution service.
2.    Follow up with a letter. Keep records of all written correspondence as well as receipts, canceled checks and credit card statements. If a business requests documents, send a copy, never an original. Keep a log of all conversations, including the date and time of the call, what was said and whom you spoke with.
3.    Report suspected unethical or illegal behavior to the proper authorities  Take pictures of work you consider to be shoddy or below the quality you expected.

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Angie’s List collects consumer reviews on local contractors and doctors in more than 500 service categories. Currently, more than 1.5 million consumers across the U.S. and Canada rely on Angie’s List to help them make the best hiring decisions. Members get unlimited access to local ratings via Internet or phone, exclusive discounts, the Angie’s List magazine and help from the Angie’s List complaint resolution service. Take a quick tour of Angie’s List and view the latest Angie’s List news.