How to Vet a Contractor

Before you agree to work with a particular remodeling company, here's what you need to know.

(Image credit: andresr)

Hiring a contractor is the most important step in any remodeling project, so carefully check out candidates, even those recommended by friends and neighbors.

Our organization, Consumers' Checkbook, can help with the vetting process if you live in one of the seven areas where we rate service providers. Unlike other organizations that provide contractor ratings, we are nonprofit and don't accept ads or get referral fees from businesses we rate.

Whether you find a contractor through Checkbook or another source, here are eight guidelines for choosing a reputable firm:

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Get several proposals. The difference in prices can be tens of thousands of dollars, so getting multiple estimates is critical. Checkbook's undercover shoppers collected proposals from multiple contractors for two remodeling projects. Estimates ranged from $113,000 to $205,000 for one job, and from $26,000 to $61,000 for the other.

Don't assume high price means high quality. Checkbook's shoppers often find that the highest-priced contractors are among the lowest-rated by their customers for quality of work. Many contractors do great work without the high price tag.

Review credentials and experience. How long has the company been in business? How long have key employees been on the job? Have they worked in homes similar to yours?

Talk to references. Get names of customers whose projects were similar to yours. Ask about each company's performance and how it responded when things didn't go right.

Check schedules. How soon can they fit your job into their schedule? Get estimated start and completion dates.

Find out who does the work. Some remodelers use subcontractors; others do most of the work themselves. Whatever the case, make sure top-notch tradespeople will handle each part of the project.

Be sure your remodeler is licensed. In most states, major remodeling work must be done by licensed contractors. If you use unlicensed contractors, you become your own de facto general contractor, making yourself responsible for correcting defective work uncovered by inspections—and possibly making you responsible for injuries suffered on the job site.

Check insurance. Any company performing work in your home should carry two types of insurance: liability and workers' compensation.

-- Kevin Brasler, Consumers' Checkbook

SPECIAL OFFER: Consumers' Checkbook is offering Kiplinger's Personal Finance readers free access to its ratings through October 31 at The ratings cover seven metro areas: Boston, Chicago, Minneapolis–St. Paul, Philadelphia, San Francisco/Oakland/San Jose, Seattle and Washington, D.C.