With home improvement projects on the rise, so are calls for quality contractors to complete them. When taking on a home improvement project that you can’t complete yourself, it is important to find a contractor that you can trust. The contractor bidding process represents a major part of any home repair project, so it is important to take the right steps when doing so.
How to get an estimate
Working with a contractor making repairs in your home requires you to get multiple bids from a variety of companies. You can also monitor local material prices to make sure the contractor is not overcharging. The following section talks about the initial search for a contractor and how to make sure they are not overbidding on the project.
Step 1: Get multiple bids. Start by calling multiple construction companies.
You can find local contractors through the Yellow Pages, the local newspaper, or online.
Experts recommend getting at least three bids from three separate companies.
When looking for companies to get an estimate from, talk to friends, family, and coworkers to see if they have any recommendations.
In addition, choose from a combination of small and large companies to get bids from.
When researching companies, make sure to look up customer complaints and ratings for work each company has performed. Popular ratings sites include Angie’s List, HomeAdvisor, and ConsumerAffairs.
Step 2: Determine material cost. You can also control costs by monitoring the price of the materials needed to make the repair and then comparing them to a contractor’s estimate.
Call local suppliers to determine how much the materials needed for the job cost.
In addition, low prices should bring up a red flag as well. If a contractor’s estimate for material cost is way lower than the other contractors you contacted, then the quality of work might also be low to make up for the lower income from the job.
Keep in mind, expect contractors to mark up material costs. Markup pays for any overhead the contractor might have. Overhead includes paying the bills for the company, employees, and any equipment the company uses. Anything after that is profit. Contractor markup ranges from as little as 35% to as high as 85%. Contractors with the lowest markup percentages usually complete a higher volume of work, requiring less from each job to pay the company’s total overhead.
As a part of the bidding process, make sure to ask questions of any contractor you contact for an estimate. Refusal to answer questions represents a warning sign that you should forego using that particular contractor. Some good questions to ask include:
- Where is the business located? Ask this to determine if the contractor has a permanent place of business. Without an office, can you trust the company to remain in business going forward?
- Is the company insured? To protect yourself and the contractor, make sure that the company has both general liability and workers’ comp insurance. Ask for copies of the company’s insurance policies to keep in your own records.
- What is the company’s reputation with local trade associations? You should also check the company’s reputation with local and national trade associations. National trade associations include:
- How long has the company been in business? Look for a company that has many years of experience in the home construction business.
You should also ask for proof of how long the company has been in business.
- How does the company handle complaint resolution? You should look for a contractor company that resolves customer complaints professionally and quickly.
The Better Business Bureau represents a great resource for complaint-resolution history, as they rate businesses according to how quickly and successfully a company resolves complaints from customers.
- Ask for at least three references from the company. When talking to a contractor, ask for at least three references from past customers.
If possible, visit the job site and speak to the homeowner about the quality of work the contractor performed.
Choosing a bid
When choosing a bid from a contractor for home repairs, you need to compare the bids from each company. When choosing a bid, look for the following:
- A list detailing exactly what the contractor is to perform
- Any excluded items
- The price for all of the listed work
- Clear payment terms
While you might be leery of hiring a contractor to make repairs in your home, by being detailed and asking the right questions, you can find a reliable company. You can further ensure the quality of work by only choosing contractors that are properly licensed, have the appropriate insurance, and do not unnecessarily markup the cost of materials.