12 Things Homeowners Should Check Before Hiring A Contractor, Including The Paperwork That Can Matter When A Project Goes Wrong

A contractor with a friendly smile and a truck full of tools can still leave you with a half-finished kitchen. The difference usually comes down to the homework you do before you sign anything.

Architectural blueprints on a table with drafting pencils, a metal ruler and a storage tube.

The Federal Trade Commission, the government’s consumer protection agency, publishes advice on this very topic. Its guide on hiring a contractor (read here through an archived copy) walks homeowners through what to ask, what to get in writing and what to hold back until the work is done.

We turned that advice into 12 checks. Rules differ from state to state, so your local building department or consumer protection office has the last word.

Search The Name Next To Words Like “Scam” And “Complaint”

The FTC suggests asking friends, neighbors or coworkers who have used a contractor, and looking at their work if you can. It also recommends checking review sites you trust for recurring praise or complaints.

Another tip: search the company’s name along with terms like “scam,” “rip-off” or “complaint.” The FTC prefers established businesses with a track record you can verify.

Confirm The License Is Current

The FTC says to confirm licensing and bonding requirements with your local building department or consumer protection agency, since rules vary. It also says to make sure any license is current.

A license number on a business card is a start. A quick call to the right office is better.

Collect Written Estimates, And Do Not Just Pick The Cheapest

Once you have narrowed your list, the FTC advises collecting estimates in writing from several companies. It says not to automatically choose the cheapest bid.

Instead, ask why the prices differ. The answer can tell you a lot about who understands your project.

Ask How Many Jobs Like Yours They Finished Last Year

The FTC suggests asking how many projects like yours the contractor has finished in the past year, and asking for a list.

A roofer who does roofs every week is a different bet than someone trying roofing for the first time.

Find Out Who Pulls The Permits

The FTC says to ask whether your project will need a permit. A competent contractor handles all required permits, and one familiar with local permitting is a plus, according to the agency.

Its warning signs of a scam include a contractor who asks you to pull the permits yourself.

Call At Least Three Recent Clients

The FTC recommends getting at least three recent clients with similar projects. Ask whether the work finished on time, whether they were satisfied, whether costs rose unexpectedly, whether crews arrived punctually, and whether the site was cleaned up.

You can also ask to visit a job in progress.

Ask For Insurance Certificates

The FTC says to confirm personal liability, workers’ compensation and property damage coverage, and to request current certificates. Without them, you could be liable for injuries and damage, the agency warns.

It is a simple request, and a reputable contractor expects it.

Check The Subcontractors Too

The FTC advises confirming that subcontractors carry current insurance and any required licenses.

The person who shows up to wire your house may not be the person you met at the kitchen table, so ask who will actually do the work.

Keep The Down Payment Small And Skip The Cash

On payment, the FTC says to avoid paying cash. Use a check or credit card for smaller jobs, and consider financing for larger ones.

It also recommends keeping the down payment small, noting that some states cap what a contractor can request. Tie each payment to completion of a defined portion of the work, so payments pause if the project stalls.

Get Every Promise In The Written Contract

The FTC says to get a clear, written contract before signing. It should include the contractor’s name, address, phone number and license number if required, estimated start and completion dates, and a payment schedule.

It should also cover who obtains permits, how change orders are handled, a detailed materials list, warranties and scope details such as cleanup. The agency even suggests a “broom clause” making the contractor responsible for cleanup, and writing down any verbal promises.

Know Your Three-Day Right To Cancel

Under the FTC’s guidance, the contract should include a written statement of your right to cancel within three business days if you signed at home or somewhere other than the seller’s permanent business location.

That cooling-off period can be a real lifesaver after a high-pressure sales visit.

Do Not Make The Final Payment Without Lien Releases

The FTC says not to make the final payment until you are satisfied and have lien releases or waivers from the contractor and every subcontractor and supplier. Without them, unpaid parties could place a mechanic’s lien on your home.

The agency also notes that if a problem persists after a good-faith effort to resolve it, you may be able to withhold payment through your credit card issuer, up to the outstanding balance plus related finance charges.

Keep the contract, change orders, correspondence and receipts together, and photograph the work as it goes, the FTC suggests. The agency’s scam warning signs include pressure to decide immediately, cash-only or full payment up front, and a suggested lender.

Willow and Hearth