Home renovation projects can be a big undertaking–no matter the size of the renovation as you are spending a lot of time and money to get your space just right. Conducting thorough due diligence when hiring a contractor is crucial for ensuring a successful project and avoiding potential pitfalls. This process involves verifying the contractor’s qualifications, license coverage, and reputation. This article includes a breakdown of key areas to consider.

Make sure to also ask these 16 questions to potential contractors, and check out these tips for how to choose the right contractor for your home renovation.

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1. Verify Credentials and Licensing:

  • Licensing: Confirm that the contractor is properly licensed and insured to operate in your area. Check with your state’s licensing board or consumer protection agency to verify their credentials and check for any disciplinary actions.
  • Certifications: Look for contractors with relevant certifications, such as those from industry associations or manufacturers. These certifications demonstrate a commitment to professional standards and ongoing education.
  • Subcontractors: If the contractor plans to use subcontractors, ask about their qualifications and insurance coverage.

2. Obtain Insurance and Bonding Information 

  • Proof of Insurance: Ask the contractor for a copy of their insurance policy/coverage, and verify that the contractor has adequate insurance coverage, including general liability insurance and property damage coverage. 
  • Bond: Some states require contractors to maintain surety bonds that homeowners can seek recovery in the event of a dispute or issue. Ask the contractor for their surety bond information. 

3. Check References and Online Reviews

  • References: Ask the contractor for a list of references, and contact them to inquire about their experiences. Ask about the contractor’s communication, work quality, timeliness, and problem-solving skills.
  • Online Reviews: Search for online reviews and ratings on websites like Yelp, Google Reviews, and the Better Business Bureau. Pay attention to both positive and negative feedback, and look for patterns in the comments.
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3. Check Complaints and Reputation

  • Home Builders Associations: In addition to checking the contractor’s references, you should also reach out to the local home builders association to learn the contractor’s reputation in the area. 
  • Consumer Protection Officials: You should also check your state consumer protection official/agency to see if they have any complaints against the contractor. 

4. Review the Contract Carefully

  • Contact Information: Make sure the contract includes the contractor’s name, address, phone number, and license number. 
  • Scope of Work: Ensure that the contract clearly defines the scope of work, including specific tasks, materials, and timelines. Confirm that the written contract matches, and does not contradict, any items that were previously discussed with the contractor. 
  • Payment Terms: Understand the payment schedule, including deposit requirements, progress payments, and final payment.
  • Change Orders: Clarify the process for handling change orders, including how they will be documented and priced.
  • Warranties and Guarantees: Review any warranties or guarantees offered by the contractor on their workmanship and materials.
  • Dispute Resolution: Understand the process for resolving disputes, such as mediation or arbitration.

5. Other Considerations

  • Communication: Assess the contractor’s communication skills. Are they responsive to your inquiries? Do they explain things clearly?
  • Liens and Judgments: You may also want to engage a local law firm that can conduct a legal search of lawsuits and judgments against the contractor. This may cost you several hundred dollars but well worth it for a renovation that you are paying tens or hundreds of thousands of dollars!
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Remember no matter how you found the contractor–recommendation by a friend, online matching service–you alone are responsible for hiring the contractor and will be bound by the contract you sign with the contractor. By conducting thorough due diligence, you can minimize the risk of problems and increase the likelihood of a successful project.

For more resources on how to protect yourself from scamming contractors, be sure to check out the resources available on the Federal Trade Commission’s website.

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By RenoFi Team Our dedicated team of Renovation Advisors, Loan Officers, and experts oversees our entire content production process to ensure it provides a high-level of authority and benefit to our website visitors. While all content has been thoroughly proofread and fact-checked to publication, we advise that it should be consumed for general informational purposes only.

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