There are so many contractors out there. Many profess to being the best in their area. Some have fancy-looking vehicles with all the decals. Some are great and don’t advertise. There’s probably a whole post about how to find a contractor, but once you’ve found one, here’s how you check them out.
Also, a disclaimer is in order. I don’t think you can ever make certain you have a good contractor. You can only minimize risk. That’s what I’ll tell you how to do. And believe me, I know. As someone who has hired terrible contractors, I’ve seen what to look for.
First, a Bad Contractor
I had a guy come in to do work on my primary residence. He was an employee for an electrical contractor I had used before and liked. This electrical firm was expensive, but did good work. This journeyman and I ended up talking and I explained that I have some rental properties which need additional work. He told me that he could do all those things. So, I got him started framing, plumbing, and doing electrical work. He would give me a good deal on the labor if I bought the materials.
He was just getting started and studying for his general contractor’s exam, but he had been doing this stuff for years. I started having him do more and more things and he could do most all of the work from basements to roofs. I was just starting too, and he charged 1/3 of what I would have gotten elsewhere.
Once he had passed the exam, he asked me if I could start him get his business running. He would borrow $3,000 and pay it off with labor. My wife is a graphic designer and she made him logos for free. He purchased some pens with his new logo and gave me one. Then he disappeared. Not a trace. Moved out of the state. Later, many of the repairs started failing. Roofs leaking, etc. We now discover these things from time to time and we know they were a ‘Ken Job’. I’m spending more money now to fix the problems he caused, which worked for a while, but later failed. What was I thinking? He hadn’t even passed his exams. Oh yeah, I found out later that our state doesn’t even have an examination for a general contractor. What other lies did I fall for?
How to Vet the Contractor
I now think I know a lot better. Here is my checklist. They don’t have to be done in order, but if your contractor passes them all, you will have the best likelihood of getting good work done.
- Check their license (where required) with the state board or perhaps the city in some places.
- Make sure they will give you a W-9. It’s a tax document for independent contractors. If you pay them more than $599 in a year, you have to report it to the IRS and they have to pay taxes on this. Disreputable contractors will resist this, because they want you to pay cash so they avoid taxes. Definitely a sign of shadiness. Exception: if you are hiring an S or C corporation, the W-9 is not required. If they are this big, they can provide proof.
- Ask for proof of liability insurance (insurance binder) that shows you as an additional name insured. This is often not asked for and most times never needed, but if an injury happens. If they make some excuse saying it isn’t required or the insurance company they give you won’t answer the phone, than walk away. Don’t just take a piece of paper, also call the insurer and verify.
- Also verify their worker’s comp insurance policy if they have workers. Some states don’t require worker’s compensation insurance. Check with yours.
- Ask how long they’ve been in business. This one can be checked usually at the secretary of state for their business filings. If they are just a sole-proprietor, you may have to take their word for it here. Newer businesses are more risky.
- Do some googling. Again, smaller guys won’t have much and that’s not always a red flag. Anything negative online is though.
- Ask the local building inspector. That person may know your contractor and tell you about their work.
- Go to a current job and inspect. You can absolutely request to do this. If they can’t produce a current job, why not? Are they so bad they can’t find work?
- References – They should provide a list. Of course, these are going to be their very best ones, with bad ones left off. If they don’t have the list, that’s a problem.
I know it’s a pain to do all this. And it will feel like way too much. Too much, that is, until you hire a bad one, and regret not doing it. Do it the same way every time. If they push back you can say that’s your policy. How many of those checks above did I miss with my first contractor? Every one. I lost way more than 3 grand with the bad work that had to be redone. At least I got a free pen. Avoid this for your business.
