10 Crucial Questions to Ask a Potential Contractor

Hiring a contractor can feel a bit like gaining a new family member, except in this case, you're the one in control of the decision—not your mischievous little sister. The relationship resembles a family connection because, depending on the project's size and the number of subcontractors involved, you'll likely spend a significant amount of time with the contractor. Therefore, it’s crucial to find someone you can communicate with easily, who will also deliver quality work.

To make an informed decision, you need to ask potential contractors key questions—preferably three candidates so you can assess their responses. This is your home at stake, and you want someone reliable, committed, and willing to complete the job as promised.

Next, we'll dive right into the essential details you need to know about a contractor before deciding to welcome them into your home temporarily as a part of your family.

10: Can you share your business background?

When you begin the process of hiring a contractor, it's vital to thoroughly investigate their business background. This involves asking for and confirming proof that they are state-licensed in your area, if required. Licensing rules differ from state to state, so if you're in the U.S., refer to this list to determine whether your contractor needs to be licensed or registered for your project.

You should also verify other details, such as ensuring employees are legally paid and that the contractor carries workers' compensation, property damage, and liability insurance. Membership in a reputable professional association is another good indicator. Additionally, check if the contractor has ever filed for bankruptcy or faced legal actions. Get the specifics, such as how long the contractor has been in business and any names under which they have operated. It’s also important to know the structure of their business and where it’s located.

Confirm that the contractor has recent, relevant experience by asking for references from previous clients who had similar projects. Follow up with these references through phone calls or visits. Inquire about their experiences working with the contractor and their satisfaction with the final outcome. You can also verify this information through state licensing authorities, professional associations, local courts, insurance providers, suppliers, Better Business Bureaus, and municipal departments.

After you've researched and compared the backgrounds and qualifications of potential contractors, dig deeper into their business practices by asking them the questions on the following page.

9: Who will be on-site and how will the project be supervised?

During your interview with the contractor, it's crucial to understand their approach to site supervision and the management of subcontractors. Many of the questions from the previous page (such as those related to licensing, payroll, liability insurance, and workers' compensation) should also be asked of any subcontractors involved—everyone on the site must be properly insured.

Another important reason to clarify whether the contractor will use their own crew or rely on subcontractors is to ensure you can track all transactions. This will protect you in case the contractor fails to make payments. In some states, a mechanic's lien could be placed on your home if subcontractors aren’t paid, and they could take legal action against you [source: FTC]. Protect yourself by requesting lien releases or waivers from the contractor, subcontractors, and suppliers with each payment.

Other crucial questions focus on the contractor's on-site involvement. How much time will the contractor dedicate to your project each week, and how many other projects are they handling simultaneously? Will the contractor be directly involved in any of the work, or will they primarily oversee the project? How often will they be on-site, and who will be in charge when they aren’t there? A reliable and responsible presence should be available at all times.

When contacting references, don’t hesitate to ask about the behavior of the workers. Did they maintain cleanliness on-site? Were they punctual? And as for punctuality, we’ll address the project’s timeline on the following page.

8: Can you provide a timeline for the project?

Before hiring a contractor, it’s essential to ask whether they can commit to a fixed start and completion date, including any cleanup tasks. These dates should be clearly outlined in the formal written contract, along with a work schedule and a list of materials required. It’s also wise to specify how any change orders will impact the timeline in the agreement (more on this later).

Throughout the project, especially if you're not present on-site, it’s helpful to check in periodically to see how things are progressing. Ask the contractor how they plan to keep you informed and the process for scheduling site visits. Also, clarify the best way to stay in touch with the contractor for any questions or concerns that may arise.

Without proper communication and documentation, your project could easily turn from a dream into a nightmare. So, on the next page, we’ll explore another set of important questions you need to ask before finalizing your decision to hire a contractor.

7: What kind of guarantees can you provide?

Similar to the payment lien releases we discussed earlier, warranties are an excellent way to ensure you leave the table with peace of mind. It’s also a good practice to wait before signing a contract until it encompasses everything you expect and that you fully understand all its terms. Additionally, maintain thorough records of all payments and invoices in case a dispute arises.

Similarly, confirm that the contractor guarantees they will complete all required paperwork and obtain all necessary approvals throughout the project. Without this assurance, some contractors might neglect important issues such as building permits or Homeowner's Association rules, leaving you to deal with a significant legal problem after they’re gone.

Once you've identified a contractor who can address all the points we've covered so far, it’s time to discuss pricing.

6: What’s the final price?

Along with the other key questions to ask during the contractor selection process, be sure to request detailed price estimates from each candidate. Once you have them, take your time to review each estimate, paying special attention to those that appear either too high or too low. Estimates that are significantly lower may indicate a rushed job that won't meet quality standards. Conversely, if an estimate is considerably higher than others, it could suggest that the other contractors overlooked key factors and thus didn't quote enough to properly complete the job.

You'll also need to discuss the payment schedule and clarify how any unexpected costs or potential changes will be handled. When arranging the payment schedule, it's essential to find a balance, but the more you can keep in your hands until the work is complete, the better. You should never pay more than what has been accomplished at any given moment. And remember – don't release that final payment until you’re fully satisfied with the finished project.

5: What’s your daily work routine like?

Communicating the details of your project with your contractor can already be a challenge. Do you really want those pink countertops? Should the roof be that steep? With all the specifics to think about, keep in mind that a person will be in or around your home for several weeks – maybe even months. And to them, your home is their office. So, don't hesitate to ask about what kind of worker they are.

Understanding and aligning expectations with your contractor's work routine is key to your satisfaction. When do they begin their work each day? Will they be focused solely on your project, or managing several at once? It’s also useful to ask what they plan to do with leftover or waste materials. For instance, will there be piles of timber lingering in your yard until the spring?

It’s completely reasonable to ask the contractor if they can stick to a specific schedule, and let them know you'll be expecting regular updates on the progress. After finalizing this schedule, remember to get it documented, as suggested on the next page.

4: Can I get that in writing?

Sure, you're likely going to sign an agreement stating that the contractor will complete the work for a specified fee. However, discussing the project in detail doesn't guarantee the quality of the work you'll ultimately receive. In the contract, make sure the project details are clearly outlined: When will they start? How long will it take? What permits need to be obtained? And most importantly, what exactly are you expecting from the project?

There should be a clause addressing potential change orders, which allow for additional work at the request of either the homeowner or the contractor. If you want to ensure that your contractors clean up after themselves, make sure a broom clause is included in the contract, which legally obligates them to do so.

It's also a good idea to have a liability release written into the contract, and to carefully list the materials that will be used. This will give you a better understanding of where your budget is going. For more important financial considerations, be sure to check out the next page for another crucial question to ask your contractor.

3: What do I have to put down?

Down payments can be tricky in the world of home renovations and improvements. Sure, giving your contractor some upfront money may demonstrate trust, but you don't want to risk losing that money to someone who may vanish without completing the work.

The Contractor's State License Board of Canada suggests that down payments should be limited to 10 percent or $1,000, whichever is smaller. Additionally, some U.S. states have laws limiting the amount contractors can ask for upfront [source: FTC]. They also recommend that payments should not be made in advance of the work being completed; in other words, don't pay for a finished roof if you're still depending on tarps to protect you from the rain.

Keep in mind that a reputable company should not need a large down payment to cover materials or overhead. They should have a steady cash flow that allows them to begin the project without requiring a significant advance. This brings us to the next important question: Who, exactly, are we paying when we pay our contractor?

2: So, who do I write this check to?

Although it might seem obvious, keep in mind that handing over cash to just anyone for their services is not always the safest option. Paying a business, rather than an individual, typically ensures that you're on record somewhere.

Paying an individual opens up serious risks. If the contractor has a business license but still asks for a personal check, it may mean they aren't reporting that income for taxes – not exactly a sign of integrity. If they don't have a business license, it’s even worse; not only are they operating unlicensed, but you could be held liable for any shoddy work or even injuries to workers.

Also, avoid paying cash, as it's untraceable and often requested by questionable contractors. Checks, credit cards, and loan financing are usually much safer methods of payment.

1: Don't Just Stop at the Contractor

While it's essential to ask your contractor about any required permits, don't assume that your due diligence ends there. Many local municipalities offer online tools that allow homeowners to check what permits are necessary for renovation or construction projects. Use those resources to verify your contractor's information or reach out to the permit office directly to ask about any applicable codes.

Another key reason to confirm permits with your local city or county is that homeowner's insurance generally doesn't cover unpermitted work. If things go wrong, the likelihood of them covering your claim without the proper permits is slim. You might even want to check with your insurer to understand what permits are needed in the event you need to file a claim.

If you're still eager to expand your understanding of contractors or home improvement projects, keep reading for plenty more insights.