How to Vet a Contractor Before Signing Anything

The pressure runs the other way, because you usually want the work done soon and the contractor is standing in your kitchen being agreeable. Slowing down at this point is the highest-value thing you can do.

Verify licensing yourself

Most states license general contractors and specific trades, and nearly all maintain a free online lookup. Search the licence number, confirm it is current, confirm the name matches exactly, and check for disciplinary history.

A licence number on a business card proves nothing. Numbers are borrowed, expired and occasionally invented. The state database is the only source that counts, and checking takes two minutes.

Insurance certificates must come from the insurer

You need to see general liability and, if they have employees, workers' compensation. Request that the certificate of insurance be sent directly from their insurance agent, naming you as certificate holder.

This matters because a contractor-supplied PDF may be expired or altered, and because an uninsured injury on your property can become your liability. If they subcontract, ask whether subs carry their own coverage and whether the general contractor's policy extends to them.

References, checked properly

Ask for three references from jobs completed within the past year, and one from a job two or three years old. The older reference is the useful one, because it reveals how the work aged and whether warranty issues were honoured.

When you call, ask specific questions: did the final price match the contract, were there change orders and why, did the crew arrive when promised, how were problems handled, would you use them again. Ask to see the work if the reference is willing.

Get three comparable bids

Comparable is the operative word. Give each contractor the same written scope, or the bids will differ on scope and be impossible to compare. Ask for itemised breakdowns of labour, materials and any allowances.

Treat an unusually low bid as a warning rather than a bargain. It usually indicates missing scope, thinner materials, an inexperienced crew, or an intention to recover margin through change orders. Ask the low bidder directly what they have excluded that others included.

What the contract must contain

A specific scope of work describing what will and will not be done. The total price and a payment schedule tied to completed milestones. Start and substantial completion dates. Named materials with brands, models and grades — not 'tile' but which tile.

Also: who obtains permits, how change orders are documented and priced, who is responsible for cleanup and disposal, the workmanship warranty period, and a lien waiver provision requiring waivers from subcontractors and suppliers as they are paid.

Verbal agreements are worth nothing when memories diverge. Every change goes in writing, signed, before the work happens.

Payment discipline

A deposit of 10 to 30 percent is standard and reasonable. Larger deposits shift all the risk to you, and some states cap them by law. Never pay in full before completion, and never pay cash without receipts.

Structure payments so a meaningful amount — 10 percent or so — remains due after final walkthrough and punch list completion. That final tranche is what gets the last details finished.

Permits are protection, not bureaucracy

A contractor suggesting you skip permits to save money is proposing to transfer risk onto you. Unpermitted work can complicate insurance claims, must often be disclosed at sale, and may have to be opened up and redone for inspection.