5 Questions You Must Ask Before Hiring a Contractor

Photo Credit Shutterstock - Couple in front of House

Building a new home can be one of the most exciting events you’ll experience. It can also turn into a huge nightmare if you don’t choose the right contractor. When we say ‘right’ we are talking about a reputable contractor who will build you a quality home at the price agreed upon, and on time.

1) Ask for Client References

You know how the three most important elements of buying a home are location, location, location? Well, determining if you are going to hire a stellar contractor must be preceded by references, references, references.

Get at least three and then followup and ask the clients your questions. Don’t be shy, the follow up is essential.

You’ll want to ask:
• If they were happy with the quality of the work.
• Was their home completed on time and within budget.
• Did the contractor spend enough time on the job for their satisfaction.
• Was contractor easy to reach for questions or concerns.
• Would they recommend the contractor to family and friends.

2) Ask for Business References

Here you’re looking for the contractor’s banker, title company, material suppliers, sub-contractors.

The number one question for all these references is: Does the contractor pay on time? And for the suppliers and sub-contractors, ask if they’ve ever had to file a lien for non-payment, and if they still conduct business with the contractor.

3) Ask to see the Contractor’s License

You also want to see the general liability and workers-compensation insurance policies. Some states do not require or even offer a special license (such as Texas) but if your state does, obviously you want your contractor to have it.

4) Ask for the Contract

You’ll want to see the contract you’ll sign in the event you hire them. How much wiggle room is there? The more detailed the contract, the better protection you’ll have. Specifically you want details of the work to be done (with full materials allowances), the estimated start and finish dates, and total cost, and payment schedule.

Before you actually sign the completed contract, it’s not a bad idea to have an attorney review it.

5) Ask for Protection Clause

Ask if you can insert a clause that you’ll be compensated if they go a certain amount of time over schedule. Remember, time is money.. your money.. and the longer the building process takes, the more interest you have to pay on the construction loan.

You might ask for your interest payments to be paid by the contractor for every month they go over schedule. Now, you might agree to at least 30-45 days grace time past the schedule, and generally you allow for delays due to ‘acts of God’.

Along with these five questions, you’ll want to check with your state’s consumer protection agency along with your local Better Business Bureau to make sure the contractor doesn’t have a history of disputes with subcontractors or clients.

Guest Post by Dee, who builds homes in the Texas Hill Country. You’ll find her hanging out at SmallHouseLife.com where she writes articles like the 5 Biggest House Plan Mistakes and also reviews floorplans. She’ll even have a look at yours if you ask her!

2 thoughts on “5 Questions You Must Ask Before Hiring a Contractor

  1. Jack

    Good to know. Wife and I are almost ready to build and we dread trying to pick our contractor. We’ve heard so many horror stories.

  2. Chris

    Hiring a contractor can be so daunting. You here all of these horror stories of people getting ripped off, or the ones that don’t get ripped off almost never end up with what they wanted. I was happy to find this post to help me out. I had no idea about the protection clause too! Great tip.

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