If you are buying properties for renovation and resale, or a homeowner who is getting a home ready to put your home on the market, you will likely have to deal with contractors during your home’s renovation. While hiring contractors can save you quite a bit of time and help you get your home on the market more quickly, there are a few steps you should take to make sure your contract work goes smoothly.
First, develop a written work plan with your contractor. The work plan should state, in detail, the work that is to be done, the timeframe for completion, and the price that is to be paid for the work. This helps ensure that you and your contractor know exactly what you expect. It’s also a valuable document to have in case the contractor does not complete the work correctly.
Second, pay only for progress. Some contractors will ask for some or all of the fees up front. It’s important get clarity of what you are paying for if you agree to an up-front fee, because it will be difficult to get this money back if the contractor does not complete the work to your satisfaction. Often, you can negotiate a series of smaller payments as portions of the work are completed – this benefits both you and the contractor, because you are more likely to see progress, and the contractor can recoup expenses as the work is being done. We will pay for the materials directly and then do progress payments for the labor.
Finally, make sure that any changes are made in writing. If your contractor needs to extend a deadline, substitute building materials or fixtures, or make any other changes, it’s not enough to rely on a verbal agreement. Your contractor must be willing to commit to all changes in writing.
Other items to consider is making sure that the contractor has the proper credentials as well as insurance – liability and worker compensation. When working with contractors that don’t have the proper credentials and insurance, you put yourself and your home and assets at risk.