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Q. We moved to the area a year ago and the house we moved into needs work, a lot of updating and things fixed. We have been trying to work the maze of figuring out what we want to do, what we can afford to do, as well as potentially pick a builder or contractor/remodeller. We need advice about how to pick a contractor and also steps to go through in contracts and the process to help protect yourself. I don’t know if you’ve addressed that before but it would be useful especially since many people are not selling and a subset of people that can afford it are looking to remodel to get the space or house amenities they need.
A. You’re on the right track by trying to define what you want done and in what order. Write that down with the greatest degree of specificity as you can. That becomes a document known as a scope of work and using copies of it you can distribute it to potential bidders to get “apples to apples” comparative bids. Finding the right contractor is a combination of work, patience and luck. Word of mouth is great but not perfect. Referral services routinely screen their listees but sometimes the proverbial wolf in sheep’s clothing slips through.
Many contractors at the residential home improvement level see giving competitive bids as a losing proposition and a waste of time. The work world for these guys has been so good in the last so many years-- but that’s changing reflecting our recent market downturn-- that some good contractors don't want to bid because they don't want to get into a price war with some fellow whose office and world headquarters is a cell phone in a pick-up truck with little or no overhead and will low-ball a bid just to get some cash. The quality of such work is a true roll of the dice. Contractors would prefer to just give a quote and that's the price for which they will do the work-- take it or leave it. If they are stars at what they do--that's called reputation for quality work usually spread via word of mouth-- then that's how they get their work. Remember that they got good at what they do by working with their hands-- not answering phones, searching computer sites or doing paperwork-- so their administrative skills tend to be limited and in dealing with them it is wise to keep that in mind. They are generally not good negotiators and shy from it thinking the process is designed to wear them down. When you see a price that you think is low then it may be that the bidder has overlooked something, is incompetent or just plain dumb-- all of which will work against finishing the job satisfactorily for you and you will probably end up spending tons of money to get whatever it is done and certainly will be well above the original low bid. If the price is high (or it seems to you that it is) that could be a signal that the bidder really isn't interested in your project and throws a big number at you and if you award the job to that bidder he'll take the big payday as consolation for taking work he didn't want in the first place. The worst situation you can get into is the escalating cost project where the contractor has the house half torn apart and comes back to you wanting more money because he either didn't anticipate something or in reality got in over his head. This could also signal old-fashioned fraud. I recently counseled a homeowner who got a contractor's name via some sort of a referral service (or perhaps from a flyer she found stuffed in her mailbox, newspaper tube or hung on the doorknob) to fix a minor roofing problem. By the time she called this cad off he was trying to charge her over ten thousand dollars for a job that should at the most have been ten percent of that. Not surprisingly, a visit to the DLLR (Department of Labor, Licensing and Regulation) website revealed that he was unlicensed-- among other things. If he was operating without a license, it would seem logical that he would have little use for insurance, Workman's Comp, etc and the whole job can get real messy should someone fall off the roof breaking himself up while working for this bare-backed contractor. In this instance our bad actor felt he could con an uninformed person that he felt had a bank account he could reach out and touch. If you haven’t had much luck with word of mouth yet don’t give up on it. Take a day and drive around your neighborhood and see if similar work is being done elsewhere where you can speak to the homeowners to get a feel for who’s doing it. Contractors put phone numbers on the sides of their trucks for a reason. I’ve taken many phone numbers from the sides of trucks and called the contractors to chat with them about their business. Don’t be afraid to ask for all the normal things such as references, insurance information and so forth. Call the references and you may find some will even invite you over to look. When you get to the point of hiring someone and signing on the dotted line read everything over carefully. If you don’t understand something-- ask. Show it to your lawyer. An hour of a good attorney's time can save you thousands. Remember that in Maryland the maximum amount a contractor can ask for at contract signing is one third. Don’t let a contractor get ahead of you with money. Be sure the job is one hundred percent done before you make final payment. There are a lot of good, honest contractors out there but we all hear about the bad ones who get into the middle of the pack and dirty things up. Be patient, business-like and remember—it’s a jungle out there.