How to Find the Right Contractor for the Job

A home remodel is only as good as who you hire.

Builder inside a home under construction.
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Thinking about updating your contemporary kitchen to something more modern? Or maybe you want to give the master bathroom that Jacuzzi tub and steam shower you've been dreaming of? Whatever the home renovation, you'll want to find the right contractor—someone you can trust to do a great job for a fair price.

More Americans are staying in their homes due to the sluggish housing market, and many are choosing to remodel. Last year, the National Association of Home Builders' Remodeling Market Index (RMI), a good benchmark for judging the pulse of the remodeling industry, reached a five-year high and has stayed strong this year.

Ed Roskowinski, the general manager and vice president of general contracting company Vujovich Design Build in Minneapolis, says while his company has seen an uptick from about 40 projects a year to 70, they're smaller in scale. "We're seeing a lot of smaller, repair-type projects, maybe a bathroom or a kitchen remodel, and not as many full-scale remodels," he says. Although more homeowners are hiring contractors, annual revenue for the contracting industry is still on the mend—placing hiring power in the hands of the consumer.

Take these steps to ensure you choose the right contractor for the job:

Vet the contractors and their bids. While you may hear of a good contractor through word of mouth, online customer reviews are also a good place to start. On its website, the Better Business Bureau (BBB) has compiled more than 100,000 reviews of general home contractors, many of which are accredited by the BBB—meaning they exhibit a good-faith effort to resolve consumer complaints. You can also read customer reviews on AngiesList.com to gauge a contractor's work ethic, but the site charges a monthly membership fee ranging from $2.60 to $6.80 depending on where you live, plus a $5 to $10 initiation fee. Unlike other websites, Angie's List doesn't allow anonymous reviews, which founder Angie Hicks says "enhances the accuracy" of its reviews.

Before you make a hasty hiring decision, talk to several contractors in your area and get at least three bids, advises Rick Lopes, a spokesperson for the California Contractors State License Board (CCSLB). It's essential to have the contractors survey the property before making an offer so that the bids are as accurate as possible. To get an apples-to-apples comparison, make sure the bids are identical in their plans, all the way down to such specifics as what brands of materials will be used.

Lopes adds that you shouldn't necessarily go with the lowest estimate. "If two bids are the same and one is really low, ask yourself, 'Why is this person offering to do this for a lot less money?'" he says. "That low-ball bid may just be a way to get you to commit to them, and they're going to come back later and say things like, 'Oh, I didn't realize you needed this done,' or they may be providing you with inferior products."

The prospective contractor will likely supply you with a list of references, but odds are, those clients will only have good things to say. A better way to judge a contractor's quality of work is to visit one of their current job sites. Consider asking the homeowner there if the contractor is responsive to phone calls and if the workers show up on time.

Warning signs. With a large number of scam artists posing as contractors, homeowners should be suspicious if a contractor does any of the following:

• Pressures you for a quick hiring decision

• Accepts only cash (usually an indication he's trying to skirt paying taxes)

• Wants to skip the building permit (any major home-improvement project legally requires one)

• Solicits door to door (a few reliable contractors do, but be wary if they're not local)

• Tries to cut you a deal using materials left over from another project

• Quotes a final price without seeing the job

Confirm licensing and insurance. If your state licenses contractors, you can typically do an online license check. As for the insurance, Katherine Hutt, a spokesperson for the BBB, says the bureau's website indicates what the insurance requirements are for your state, so you'll know what to look for.