The bulletproof guide to picking the right contractor for your next home project.
Picking a contractor can be a daunting task. If you pick the wrong contractor they can steal from you, ruin your house and leave you with a huge expensive mess to clean up.
No pressure right? But how do you know who’s who? After all, unless you are in the know then you probably don’t. So What does a homeowner do?
Well in this guide I'm not only going to show you how to pick the perfect contractor for your project, but I'm also going to show you how to get the best value for both labor and material. Notice I said the word value. Value doesn’t mean cheapest. If you're looking for the cheapest you might as well take the money you are about to spend on the project and put it on red at the casino. You may lose, you may win. If you win, take that money and hire that company your gut was telling you to hire in the first place.
There is an old saying. “You get what you pay for”. This statement especially rings true in the home service industry.
So first off let’s talk about little tricks and scams contractors use and to take advantage of homeowners.
1)The down payment scam
This is the most common scam in the construction industry. “All we need is a 40% down payment and I'll come back next week to get started” ,preferable in cash of course, or in a check made out to someone and not a company.
I'm sure you already know what's about to happen. The contractor in question takes the down payment leaving the homeowner waiting around. Next week comes around and the homeowner is left wondering when their project is going to start. They give this contractor a call. No answer. Waiting for the voicemail... Mailbox full.
Still unaware that they have become a victim of a scam, the homeowner believes They will get back in touch with them. Weeks go by and now the homeowner starts doing some investigating into this contractor. They call the material vendor to ask about this contractor. And they find out that they have heard of them doing this before, or even worse, the vendor has never heard of this contractor.
Unfortunately in these situations you aren't getting your money back. Even if the police catch the guy. The money is typically long gone. As a contractor myself I hear of this happening in my hometown (Memphis) almost every week. It's heart breaking too because it usually happens to people that had to work hard saving and barely coming up with the money to make the repair or renovation on their home in the first place. Run this type of investigation before you decide on your contractor. Call the vendor’s before signing a contract. Ask the vendor’s who they would recommend for your project.
2)The lawsuit scam
This scam has been gaining traction over the years although not as common as the down payment scam I hear of this one taking place maybe a couple times a year. The worst part about this contractor scam is that it can take everything from you.
So here is one way this scam works. We will use a painter for example. While the painter you hired is painting the interior of your home he “falls off his ladder’. Of course kicking his ladder over into something that does damage to your personal property, to really sell the incident of course. You come running into the room after hearing the loud bang of his ladder crashing into your china cabinet, and you see your painter laying on the floor telling you to call an ambulance. Completely unaware that the only accident that happened here was that you hired the wrong contractor for your project.
Now your painter's attorney is calling. Telling you that your employee has been severely injured on your work site and will never be able to work again. Your painter's attorney is telling you that you are responsible for not providing a safe work environment for your employee.
You call your insurance company telling them what happened. They say don't worry your painter has insurance doesn't he? Doesn't he? Your insurance agent then informs you that in your homeowners insurance agreement that you signed it states that all service providers in your home must have their own insurance policy. They recommend you to a Lawyer and tell you good luck, but there is nothing they can do.
The scary part about this one is your contractor doesn't have to be trying to scam you for this one to become a reality. Especially when ladders are involved, there is a greater risk of an accident happening.
In my experience of owning a construction company the injuries that happen the most for us are actually the low to the ground ones. 8 foot interior walls. Because you're not high enough to be careful but you are high enough to break a leg or fall and hit your head.
3)Material Scam
This is the most common scam. There is an agreement of ½ inch plywood and they are hanging ¼ inch. There is an agreement for $90 gallon of paint but your painters are using $45 paint. The difference is going right into your contractor's pocket. You believe you are buying a Mercedes but later find out you bought a Honda. You always need to make sure your material is specified in your signed contract. The contract is to protect both you and your contractor. Never enter into a service small or large without a professionally written contract.
If you're able to, always check the material that is being applied and make sure it is the same material that was originally discussed and is your contract.
4)Then last but not least. The come back and rob you when your not home Scam
As a contractor is working in your home they can figure out what your schedule is. A large percentage of home break ins happen after the homeowners had work done on their home. Scary right? Remember cheap prices = Cheap labor and cheap labor is cheap for a reason.
So there are way more scams going around than these 4. But they are always changing and new ones are always popping up. But most are variations of these
So How do We pick a contractor?
So when it comes to our home, for most of us it's the largest investment we have. So we need to be very careful when picking a contractor for home.
Here are some steps to avoid getting taken advantage of and finding the perfect contractor for your upcoming project.
1) Presence Online / Reputation
If your potential contractor just has a social media page or is just running an ad on angie's list be very leary. They are easy to change if you need to and angies list and other sites like them don't care who is on their website as long as they are paying them money every month. Check out their website. Does it look like it's something they spent a lot of money on or does it look like something they did themselves. Here’s why this is important.
If a company invest’s money into their website it shows that they aren't planning on going anywhere. It's easy to change a Facebook page or an instagram page and put up some quick fake reviews with their “brand new company”. It’s much harder to build and spend money on a brand new website and domain name every time you need to.
Contractors that do shotty work will often have to change their business name. With a little investigation you can see how long a company has been in business pretty easily. Next look at their online presence. Are they posting pictures of their actual work or is it pictures of houses that are just stolen pictures from the internet. What does their website look like? Then check out their reputation online. When you do a google serce of the company what comes up? Is it a couple 5 star google reviews? Or is it 50? Or 100? Read the negative reviews. However when you read negative reviews you always have to take those with a grain of salt. But look for a pattern as you read the reviews both good and bad. A contractor that is going to stand behind their work is typically going to have a large overall positive footprint on the internet and social media.
2)Require License and Insurance (And verify)
Remember that lawsuit scam? This is how you don't let it happen to you. Ask your contractor for a Certificate of Insurance (COI) if it's not on their website. Then once you have the COI call the number to verify that the document you have is valid. The number on the COI is exactly for this. This document gets faked frequently so make sure to call.
3)Hire local
Reputable, local contractors are easier to contact if something goes wrong and if a warranty issue comes up in the future. Make sure your contractor is trying to better the city they work in and not just there to make a profit and leave. Money spent locally always benefits you in the long run.
4)Go with your gut
When getting estimates it’s not always necessary to get a ton of estimates. The most important thing is to do your research on the front end and then listen to your gut instinct. Lots of times the more people that you allow to get in your ear the more confusing the experience can become.
5)Check their previous work specific to your project
Just because your contractor check’s all the previous boxes doesn't mean they have done a project quite like yours before. Make sure they have done a project like yours before and ask to see pictures.
6)Get Everything in writing
Your contract needs to detail everything being done. The material being used, the areas being worked on etc. The more detail the better, because if it's not in the contract don't expect it to be done. No matter how much you trust your contractor, never have a verbal agreement on anything being done.
7)How are change orders handled?
So as a contractor myself, change orders are the worst! Change orders ruin the schedule, add to the stress of a project.. When something is discovered that is not in the original contract these issues need to be discussed and agreed upon before any work is done and billed for. Change orders are inevitable. It's impossible to know what’s behind that wall until we rip it out. So before signing any contracts it's important to know how your contractor will handle a situation like this. This is another area where a contractor can scam an unsuspecteing homeowner. So make sure the process is in the contract.
8)Down payment and payment schedule
First off, never pay in cash and never make a check out to a person. Checks MUST be made out to a company. Now the company may have that person’s name in it, Like John’s roofing but never right that check out to John Smith. Major red flag!
A down payment is usually required however it needs to be reasonable and the contractor needs to be able to explain why. What I do in my personal business is a 10% down payment to cover our material cost. If the homeowner decides to cancel for whatever reason before work has begun they can keep all the material purchased. Then on projects over 20K we agree on a halfway point and when we reach that point we request 40% bringing us to half. With the other half being due on completion. The key here as a homeowner is to hang onto the leverage with your contractor. However this doesn't mean taking advantage of the situation.
Delays happen, unforeseen events happen, that's all part of the construction industry. As a homeowner it's important to be patient and understanding. However your contractor will be much more motivated to continue pushing hard on your project when there is still a significant amount of money left to be made.
When it comes to payment remember this. When it comes to your project your contractor makes his profit at the completion of the project not along the way. If your contractor doesn’t have enough money to float his bills during a project then what is he going to do if something goes wrong? You could end up being the one responsible for cleaning up the mess financially and having to find another contractor to finish the project. Lack of capital on your contractors' part can be a major red flag and a huge risk on your part. Remember, small companies with no money have nothing to lose, but you.
So for each draw make sure it passes “the sniff test”. Is what you are paying for equal to the work that has been completed, not the work that is going to be completed. It's reasonable to ask for money that has been spent on completed work. It's not reasonable to ask for money for labor that is going to be done in the future.
A good rule of thumb is, if the material vendors and your contractor's own people don't trust them, then you probably shouldn't either.
9)Document,Document,Document.
Keep track of conversation, contracts, change orders, colors, materials, material warranties, checks, receipts, everything. It may not be important now but if it pertains to the project KEEP IT!
Conclusion
Your home and financial wellbeing is never something worth gambling with. More times than not, what you believe you are saving becomes wasting money because it ends up costing you more both immediately and down the road. I'll give you an example from one of our clients from this year. We did an estimate that totaled to around $16,000 for an exterior paint project. The homeowner had another estimate for around $11,000. The homeowner went with the $11k contractor and a 40% down payment believing they were getting $16k worth of work just $5k cheaper. After starting, this contractor started the project when he said he would, however only worked a couple days a week, dragging the job out for weeks instead of getting it done in a week like was promised. The homeowner then inquired about the type of paint being used on their house and discovered that yes it was Sherwin Williams paint being used but a grade of paint that is primarily used for rental properties. They then discovered that cobwebs and wasp nests were being painted over. Proper prep was not being done. The painters were getting paint all over the brick and driveway. Rotted wood was being filled with caulk instead of being replaced, a disaster of a project. Not to mention the cheap labor that this contractor was inviting to this homeowners home. About halfway through the project this homeowner fired this contractor. The scary part about this incident is this company is one of the larger painting contractors in the Memphis area. But I promise you contractors like this are in every city.
So this homeowner calls us to do the work on their house after firing the contractor they hired. Now we have to undo and clean up the mess that was left behind by their last painter and still paint the whole house. Our cost for the clean up was $1900 taking our total to just under $18k and they had paid the other contractor 40% of the $11K which is $4,400. The sad part is this project that should have cost this homeowner $16K ended up costing them $22,300.
When it comes to hiring a contractor I hope you were able to take away some valuable information from this. My goal with this is to inform homeowners of the pitfalls and scams that contractors do. No contractor is perfect and no experience is exactly the same. The measure of a good contractor is their ability to deliver the product that you are paying for at the level you agreed on. If their customer service is great then that's a bonus.
If you need any painting done Caldwell Painting does interior and exterior painting. We have multiple divisions that specialize in exterior painting with a focus on mineral based masonry brick paint. We also do Great interior work and have a fine finish shop that focuses on cabinet painting and door refinishing. So if you want your cabinets done the same way they are done when new let us know. Also, if you are a cabinet maker and looking for a painter, ask us about or pro’s working with pro’s service to have your work professionally shot in our spray shop. Just go to www.caldwellpainting.com to schedule your appointment. You can schedule everything online 24/7.
