Contractors: The Good, the Bad and the Ugly

Contractors are the backbone of residential construction. The vast majority of them are honest, hardworking, talented individuals. However, the industry is also littered with contractors performing substandard work or looking to "take the money and run." It is not easy to differentiate the two, but this article will prepare you with the knowledge to make an informed decision.

The bidding process will expose the contractor's work ethic. In recent years, the housing industry has reached new plateaus of success. It is often difficult to find a contractor and have them supply a bid. They are simply swamped with work. A common response from busy contractors is, "Call me back when you are ready to build." This is similar to walking into an auto dealer and having them tell you, "Come back when you have the cash to buy the vehicle." But auto dealers have realized if they do not give a price, they can never sell the vehicle. Successful contractors understand this as well. Sure, they may quote five jobs and only capture two, but that is more than never quoting the job in the first place. If a contractor will not supply you with a bid, move onto the next one. This is a good indication of how they will treat you during construction.

Remember, the contractor works for you, not visa versa. It is human nature to defer to those with more knowledge on a particular subject. Contractors know this and will attempt to use their knowledge to get their way. For example, a homeowner may be considering fiber-cement siding on her home. She will discuss it with her contractor and may hear, "Fiber-cement siding breaks easy and looks wavy when on the wall." The contractor may have no verifiable data to support this statement, but homeowners will often defer to the contractor because he is a professional. The reality is, he may not want to install fiber-cement siding because his supplier gives him a larger rebate on vinyl siding. If your contractor questions all of your choices, think twice before signing choosing his bid. Is he offering professional advice or does he just want to perform a quick, easy job that yields the most profit?

Ask the contractor for references and follow up on them. Quality builders will supply recent references upon request. Builders with a sketchy background will not. Ask the contractor, "Can you supply me with three recent references I can contact?" If he is hesitant, ask further questions. He may be a new builder who is beginning to build a customer base. Or, he could have been fired from his last three jobs for negligence. Once you receive the references, call them and ask to see the contractor's work. Discuss the performance of the contractor, if he stayed on budget, and if he returned calls promptly. The answers given by a referral can be your greatest ally when selecting the right contractor.

Quality builders do not require large deposits up front. If you have started gathering bids for your project, the bids may request deposits up front. Small deposits - less than 15 percent - are common in the industry. Deposits larger than this amount should throw up a red flag. Successful builders have credit facilities with suppliers and can "float" purchases until you pay your bill. Contractors with bad credit cannot. So, if a contractor requests 30 percent down and claims it is for "securing materials," be wary. In general, material suppliers will hold pricing 30 days for contractors. If they want a large sum of money up front, it is possible the funds are not being used for your project.

Price should not be the determining factor when selecting a contractor. It is common for homeowners to select the lowest bid, only to find out the contractor could not perform as expected. Quality works commands a certain price. It may cost more up front, but the job will run smoothly and be performed up to accepted standards. The cheaper bid may cost more in the long run due to change orders, mistakes, or the contractor walking off the job. If you request three bids for a particular project, you will receive three different prices (often with great variances). If a contractor is 15 percent higher than another, ask him why. He may have included more in his bid than the other guy. If a contractor is 15 percent below the others, he may have forgotten to bid a key part of the job. Remember, you have a right to ask questions and the contractor should be able to explain the bid.

Selecting the right contractor can alleviate major headaches! Choosing the wrong one can have the opposite effect. Remain persistent in your search. Fixing problems caused by a contractor can take thousands of dollars and months to remedy. However, hard work and diligence in the beginning can avoid these problems.