How to hire a contractor

How to Hire a contractor

Hiring a contractor can be a daunting task for many homeowners.  Contractors aren’t known for their bedside manor; homeowners feel intimidated; and contractor lingo can be confusing. Hiring the right contractor is about a lot of common issues that will be covered in this article.

I can’t tell you who to hire but hopefully I can provide you with the tools to avoid hiring the wrong contractor. It isn’t simple and there are a lot of questions you should ask. However in terms of keeping it simple there are two key issues I suggest you keep in mind when assessing who to hire. These would include competence and relationships.

• Do you believe the contractor can actually do the job?
• Do you feel comfortable talking with this person and that you can work with this person to achieve your remodeling goals?

If you can’t say YES to both of those questions then the rest is a waste of time. Move on and find another contractor. If you don’t feel comfortable talking with the contractor now, you probably won’t be able to express your project goals sufficiently to get the rehab of your dreams. Its’ your money. You should get the rehab of your dreams as much as that is possible.

One of the best ways to avoid hiring the wrong contractor is not to be taken in by the slick salesman type or ‘Paper GC’. I’ll provide a definition of Paper GC later in this article. While there are good older contractors who have moved into the role of selling jobs, often times for health reasons, the young, dashing, well dressed salesman probably isn’t the way to go.  This isn’t to say that the salesman is a bad guy. He might be a really nice guy and very competent at knowing the information he has been trained to sell. However, salesmen often don’t know the details of the actual work and just end up adding a layer of cost and management between you and the subcontractors actually doing the work.

On the other hand, Salesmen who work for an established larger design, architectural or remodeling company can be very good and an asset to your project. Those types of salesmen tend to be good at helping a potential client figure out more realistic scopes of work, remodeling options and making a project realistically fit a budget. A good salesman can provide you with options or materials that you may not be aware of. They also tend to have a pretty good understanding of what the company work crews can get done in what amount of time.

It is also important to consider your life style when hiring a contractor. If you are a hands on person with time to devout to the project, acting as your own GC or project manage can be feasible. If on the other hand you have a busy work schedule and just want someone with experience to handle it, then hiring a GC may be the better option for you.

The following guide is put together as a bullet list to make it easier for review.

Getting started:

• Put together a list of what you want to accomplish
• Put together a list of the negotiable items and of the deal killers
• Establish what your project entails and your workmanship expectations
• Make a handout that details your requirements that you can give to contractors; in the trades this is called a ‘Scope of work bid sheet’. The more information you can provide a contractor, the closer you get to your dream rather than what the contractor thought you meant.

 

Interview contractors:

• Some people will tell you to schedule a number of contractors at the same time or right after each other. The theory is that it lets the contractors know they are in competition. While that sounds plausible its not really the way it works. Each contractor already knows he isn’t the only one bidding on the job. Going this route can be more detrimental than good.
• If you have 4 contractors show up at the same time, the two good contractors one of which you probably should end up hiring, may not even bid on the job because they know the other 2 guys are lowballers. The good contractors may figure you are looking for a cheap price or have low expectations.
• Schedule initial meetings with potential contractors individually
• Have a handout about your project to give to contractors. This will show you are serious and paying attention. It will also help initial proposals come back more similar for easier assessment
• Ask detailed questions; take notes
• Ask contractors to revise their proposal as you go through the process
• Plan an onsite meeting with each contractor during final negotiations
• Ask contractors if they use the same subcontractors for every job or almost every job. A GC who uses the same small pool of subcontractors for every job can usually provide better workmanship and completion times.
• Ask how long they anticipate the job will take AND how much longer the job might take if the project runs into typical delays.
• A common time sink can be lag time between when a particular portion of the job is complete but you are waiting on City inspectors to sign off on the work so that you can proceed into the next phase of the project

 

Proposals and Contracts:

• Get detailed proposals from contractors
• Do not accept the first proposal as the final proposal. Proposals should go through at least a few revisions as you narrow down to the final contractor and details of the job.
• Have your attorney review paperwork to ensure legal compliance and to avoid any pitfalls or shortcomings
• Finalize proposals, get all applicable City permits, order specialty materials as soon as possible
• Proposals should have a detailed payment schedule based on performance. Payments should not be made on a time basis without meeting specified stage completions. This means don’t give the contractor a check just because its been another 2 weeks. Give the contractor another check because the electrical rough-in is complete or the drywall has all been hung, etc.

 

 

Red flags to look out for:

*When the answer to every query is – ‘Its no problem’

– Every job has problems. To pretend there won’t be problems is a recipe for disappointment.

*Is the contractor experienced in the type of work you are asking him to do?

– Hiring a contractor who normally does porches in the summer may not be the best fit to do your bathroom in the winter.

* Does the contractor respond with clear and reasoned answers when you ask him if he understands the job, has any questions, or understands what you want to accomplish?

– If Yes, then that’s great.

–  If his answers are more towards ‘Oh well we’ll figure that out OR ‘oh yeah sure we can take care of that’ OR ‘no problem’.  Then you might be dealing with a salesman who is just going to farm out the job to whoever he can; which often isn’t in your best interest.

 

– The caveat to this is that there are some salesman contractors who have regular subs that can do a really good job. If the contractor can’t get his subs to the site for a pre-contract meet & greet then I would recommend more due diligence on your part

 

Proposals

First or initial proposals from contractors tend to be fairly basic and not include everything you remember discussing. There are a number of reasons for this. The most common reason though is that for a contractor to keep working he/she has to put out a fair amount of proposals. Each proposal takes time.

Because of this most contractors save time putting together an initial proposal. If a potential client is interested they will call to discuss. If a contractors’ initial proposal isn’t in the ball park, the potential client won’t call and the contractor will have saved himself a lot of wasted time.

When assessing how much of a rehab you can do, consider budgeting out rehab costs into the following categories. This can help provide clarity various rehab options will actually cost, keep category numbers manageable, and allow you to assess what has to be done in the short term, mid term and long term capital investments. Separating costs will also help you tweak costs to get the project you actually need done properly.

• Short term interior
• Short term exterior
• Ongoing mid term improvements
• Long term capital investments
• Needed installations
• Desired installations
• Compliance, licensing, start up, inventory & equipment costs
• The flexible category

Each category will have a number of fixed items that need to be done to accomplish your goals. However, there will also likely be numerous items that you can shift between categories as needed to fit your budget. For some items which category to put it in will likely be obvious. For those items you aren’t sure about yet, don’t worry about how to categorize those. Put those in the flexible category for now. As you go through the process, how to prioritize those issues will likely become obvious. If you don’t already have an Excel spreadsheet going, consider putting one together.

Design & Layout:

• If you haven’t already done so, consider making some basic drawings of how you want the space to look.
• Making drawings with dimensions can be helpful in terms of knowing whether desired layouts will work well enough. There may be changes based on what contractors tell you about infrastructure and also based on needs
• Make a list of existing hardscapes you would like to keep or are open to getting rid of.
• A good contractor may be able to refurbish some components for re-use
• Any layouts should take into account the potential for adding plumbing, heating or electrical capacity
• Be aware of ‘Scope creep’; the little ideas that increase your budget and time lines as they creep into your plan
• Have a system in place for ‘change management’; how will you track costs for ongoing changes during the project and how they effect the overall budget; how will changes and costs be documented with contractors
• Consider making a diagram of the basement areas so that you can build storage areas
• If you plan on staying in the house for the next ~ 20 years, great do whatever you want
• If you plan on selling in 5 years, then I suggest you not make the rehab too personal or eccentric. Keep market appeal in mind.

Mechanicals:

Plumbing –

• Make a list of the various sinks, fixtures and floor drains you want checked & serviced this will allow a Plumber to bid the job properly
• Hire a Plumber to go through the building to assess various work you may want to do, provide you with a list of compliance and repair recommendations and repair the various issues.

Electrical –

• Make a basic list of various lighting changes, additional receptacles, power lines, switches and security wiring that you would like to have done. This will allow an Electrician to bid on the job properly
• Don’t forget about exterior and security lighting
• Consider having a couple lights within the space put on timers or separate switches for ambient night lighting for security purposes

Heating & AC –

• Make a list of areas that may need additional heating and get bids for additional supply and return installations
• Consider upgrading to high efficiency heating equipment when the time comes for unit replacements
• Have existing AC systems checked by a qualified HVAC tech to determine reasonable remaining lifespan

• Consider your design options and budget to install new systems as your budget allows based on long term needs. Consider designing / installing a flexible system that could be altered as needed depending on your layout plans for the next few years. Slightly oversizing a system for added capacity is possible; oversizing one system a lot isn’t necessarily the best option