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How hire The Right Contractor
5. Make plans, get bids
You have your short list of contractors whose track records seem clean and whose
work ethic looks responsible. Now it's time to stop looking back at past work
and start looking forward to your project. A conscientious contractor will want
not only a complete set of blueprints but also a sense of what homeowners want
out of a project and what they plan to spend. To compare bids, ask everyone to
break down the cost of materials, labor, profit margins and other expenses.
Generally materials account for 40 percent of the total cost; the rest covers
overhead and the typical profit margin, which is 15 to 20 percent.
6. Set a payment schedule
Payment schedules can also speak to a contractor's financial status and work
ethic. If they want half the bid up front, they may have financial problems or
be worried that you won't pay the rest after you've seen the work. For large
projects, a schedule usually starts with 10 percent at contract signing, three
payments of 25 percent evenly spaced over the duration of the project and a
check for the final 15 percent when you feel every item on the punch list has
been completed.
7. Don't let price be your guide
"Throw out the lowball bid," says Tom. "This contractor is probably cutting
corners or, worse, desperate for work" — hardly an encouraging sign in a healthy
economy. Beyond technical competence, comfort should play an equal or greater
role in your decision. The single most important factor in choosing a contractor
is how well you and he communicate. All things being equal, it's better to spend
more and get someone you're comfortable with.
8. Put it in writing
Draw up a contract that details every step of the project: payment schedule;
proof of liability insurance and worker's compensation payments; a start date
and projected completion date; specific materials and products to be used; and a
requirement that the contractor obtain lien releases (which protect you if he
doesn't pay his bills) from all subcontractors and suppliers. Insisting on a
clear contract isn't about mistrust, Tom assures us. It's about insuring a
successful renovation.
Finally, remember that as soon as a change is made or a problem uncovered, the
price just increased and the project just got longer. The four most expensive
words in the English language? "While you're at it...."
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