Thinking about building a new home or doing a major remodel? Need help with hiring a contractor?

We asked the Federal Trade Commission to help us with some basic advice.

We know: How to Hire a Building Contractor

Whatís a general contractor?

A general contractor manages all aspects of your project, including working with architects and designers, hiring subcontractors, obtaining building permits and scheduling permit inspections. Design/build contractors also provide architect and design services, as well.

What other kind of contractors are there?

Specialty contractors install specific products, such as kitchen equipment or bathroom fixtures.

Should I shop around for a general contractor?


What should I ask a general contractor before I hire?

Here are some basic questions that can help you improve your chances of making a good choice:

  1. How long has the contractor been in business?
  2. Is the contractor licensed and registered with the state?
  3. Ask for copies of the contractorís insurance coverage and make sure the coverage is current. Contractors should have personal liability, workerís compensation, and property damage coverage.
  4. How many projects like yours has the contractor done? Ask for a list.
  5. What kind of permits will your project require? Getting the permits is the contractorís job; be suspicious if he suggests you get the permits.
  6. Ask for a list of references. Get names, addresses and phone numbers of at least three. Speak with the references and go to see the jobs.
  7. Ask if the general contractor will be hiring subcontractors. If so, meet them and check their insurance and licenses. The general contractor must pay them on time, or they could put a lien on your home. So, protect yourself by asking the contractor, and every subcontractor and supplier, for a lien release or lien waiver.

What else can I do to protect myself?

One way to protect yourself is by paying for the job prudently.

  • Try to make your down payment as small as possible.
  • Make payments periodically during the job, and make them contingent on satisfactory completion of certain parts of the job.
  • Donít make final payment or sign off on the job until you are satisfied with the completed job and until you know all the subcontractors and suppliers have been paid.
  • If the final bill exceeds the estimate, and you have not approved the increase, check with state, local and consumer agencies to see if local regulations help protect you.
  • Remember, if you use a credit card to pay some expenses and there is a problem, you may be able to ask your credit card company to withhold payment.

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