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Don’t be afraid to ask about a detailed contract with specifics regarding the scope of work and payment agreements. Qualified contractors will draw up a contract specific to your job if they don’t have a standard agreement in place already. Read and make sure you understand the contract before paying any required deposits. If you have any questions or concerns about the contract or want to make changes, do it before signing or paying any money down. Asking a contractor about a signed agreement should always be step #1. It’s a clear cut way to eliminate unqualified contractors because a properly written contract provides protection for you the client but also for the contractor, so it benefits everyone to have one. Below is a list of items to look for in an agreement:
This just means that you are the customer or client, and they are a contractor working directly for you. That will mean a business transaction or a request for service is happening. It might also mention details about sub-contractors or other vendors required to complete your project.
Always verify there are very clear-cut descriptions that align within the scope of the project agreed upon, and do not forget the details regarding the cleanup of any messes or construction debris. If it isn’t listed in the scope of work, it won’t be part of the deal if lawyers get involved, so make sure it is thorough and includes both what is part of the work being done, and also what is not part of the work being done. The more specific it is the less room there is for subjectivity.
What is the total percentage of the project cost are they seeking for a deposit? Are there any late fees for late payments? How long after the invoice is sent do you have to pay? What happens to the work schedule if a payment is late? What happens to the payment schedule if the contractor is not making significant progress on the project?
It is best to get all responsibilities of each party in writing. What do you expect of your contractor? What does the contractor expect of you? What will happens if these expectations are not met?
These will not always be exact and known dates, but there should be reasonable estimates of when the contractors predict your project will be completed. If there isn’t a detailed timeline set, then satisfactory progress will become subjective and your project may take longer than you had realized. You might want to consider requiring the contractor to have bond in place to avoid some of these pitfalls, you can learn more about bond here. If this a contractor that you hired to complete home inspection repairs or trr repairs make sure they understand the timelines as written in the real estate contract.
Obviously everyone wants to avoid this situation, but you need to have something in the agreement if it does by chance happens. What happens if you don’t pay? What happens if they don’t complete the work? What happens if unforeseen circumstances delay or halt the project altogether? Everyone should be on the same page about this.
Contractors providing a service to you should have a minimum of liability insurance and workers compensation. Mistakes can rapidly become expensive. Insurance is a must safeguard for the contractor, and a contractor who is not covered may leave their client left hanging if they accidentally damage private property, injure you or someone else or even a workplace accident like an serious injury or fatality to one of their own employees. If they are properly insured it significantly reduces the risk for all parties involved. Follow up by not only asking if they are insured, but also make sure you get a copy emailed or printed and handed to you before they project begins. In our experience many customers ask us if we are insured but rarely do they actually verify what we are saying is true and correct. Trust but always verify.
Not every type of work that a contractor does requires a specific license, every state, city, county or jurisdiction maybe different – so make sure you do your own research and follow up. For example here in Oklahoma plumbers, electricians, mechanical contractors are required to be licensed by the state, but also some cities also require an additional license. In Oklahoma City they also require a license for certain trades, along with any state requirements. So if I want to perform plumbing services I would have to have an Oklahoma plumbing license granted to me by the state and another plumbing license issued to me by the city to be able to legally perform plumbing services in Oklahoma City. Licensing requirements can be complex and confusing so make sure you discuss in detail with your contractor, and like insurance requirements make sure they are actually licensed by requesting visual proof of such licensing. The biggest why you want to make sure a contractor is properly licensed is because if they do not have the correct license to perform the job and there is an accident, their insurance will not cover them or you. No required license = no insurance coverage!
Something worth considering is whether or not a contractor offers any type of warranty or guarantee on their work. Some do not, but more and more contractors are starting to offer them to keep up with the stiff competition. The biggest takeaway is that you read and understand the terms and know 100% what all that warranty and guarantee includes and more importantly what it doesn’t include. The devil is in the details! Many warranties or guarantees look appealing at first glance do to misleading wording or deceptive marketing but when you dig deeper they exclude just anything of importance and what they do cover has may limitations. Not warranties or guarantees are bad but dig into the details so you aren’t left with a false sense of security and disappointed when something is not covered when you thought it would be.
If the price seems to good to be true then it probably is. 99% of the time you get exactly what you pay for when it comes to contractors. The price you pay is likely going to be a strong indication of the quality and professionalism of their work. A significantly cheaper estimate of comparable scope and features relative to multiple other contractor estimates is a major red flag. There are some reasons why cheaper bids aren’t all always questionable, for example if the contractor has the ability to buy material in bulk. For most smaller projects it could be a warning sign. All things come at a price, and a lower estimate usually means the contractor is buying lower-quality materials, reducing their overhead in unfavorable ways (not paying for general liability insurance for example), or not guaranteeing their work. Just ask specifically about their price, and use that to determine if they are the right contractor for you. It could also mean the contractor is new and inexperienced or desperate for business and under bidding the competition. You can take a look at our repair pricing guide if you need a good reference for contractor pricing, keep in mind the pricing is for labor only and not materials unless otherwise stated.
There are a few common ways deposits are addressed in the contracting industry. Some contractors don’t ask for any money down and collect the project total upon completion. This is more typical of larger contractors. Other contractors require a percentage of the total project as a deposit. Percentages vary, but 50% is common. Those who do not take deposits may tell you to be wary of someone that needs a deposit, and those that do will say they need money down to secure a spot in their schedule. Most often this money is used to purchase materials and pay their employees to produce the job so the burden upon the contractor to fund their customer’s projects is reduced. The reality is that both (and everything in between) is mostly a matter of preference, policy, and a consideration of the needs of a business and consumer. Everyone runs their business differently and neither of these methods is cause for alarm. If your contractor is requiring half down: ask them what your money is going towards. If they are trustworthy, they will be able to tell you how much is going toward materials, and labor. Contractors asking for a smaller deposit may like to claim so, but taking a smaller deposit upfront doesn’t necessarily make them more trustworthy. Like many things on this list, asking them so you can understand their process may offer useful insight. There’s nothing wrong with inquiring about where your money is going, so do not be afraid to ask.
Contractors usually have a client on-boarding process. Talk to your potential hire about their process. What should you expect? What will they do with the deposit? How long does a material order usually take? Answers to these questions will help you get an idea of all of the things that tend to happen “behind the scenes”. It’s all too familiar when you hand over the deposit check and don’t hear from the contractor for a while until it’s time to schedule the project. What goes on between handing over the deposit check and the first day on-site is important. Reliable communication is important to a great experience working with a contractor.
Solid references do matter, but do not forget about checking their online reviews before making a decision about which contractor you are going to hire for your project. While more customers are more likely to leave a negative review than a positive review, so I wouldn’t be overly concerned about an occasional negative review in a sea of positive reviews. I would be concerned about multiple recent negative reviews as that might indicate a change at the company like instability or an internal issue going on that others are not generally privy to. Also it is helpful to see how the company responds to negative reviews, and if they are trying to actively resolve the compliant and make things right with the customer. Every contractor makes mistakes, but how they resolve those issues and handle with the customer is really what matters.
If you ever need help or have questions regarding the qualifications of a contractor please give us a call at 405-415-7756 or email us at request@repairrequest.com with any questions.
This page was last updated 10/15/2022
