When you want to renovate your home, like adding a room or remodeling a kitchen or bathroom, you can take on the task yourself or hire a contractor. If you have the time and the knowhow, along with the tools, you’ll save quite a bit of money going the DIY route. Choosing this option, though, means having to do the work according to local building codes and pull the necessary permits.

Hiring a contractor is a very smart decision because everything will be done by the book. Which means that finding the right contractor is crucial. If you don’t do your homework, you’re only setting up yourself for disappointment and probably a lot of extra expense.

Evaluating the Scope of Your Project

Before you start picking up the phone and calling contractors, you should be in-the-know about the scope of your project. This includes materials, the amount of time, and of course, the cost of labor. Begin by selecting the materials and pricing them. Contractors generally charge between 10 and 15 percent of the total cost of the project, but can also charge by the square foot, the hour, or as a package.

“A contractor should be able to give you names, addresses, and phone numbers of at least three clients with projects like yours. Ask each client how long ago the project was and whether it was completed on time. Was the client satisfied? Were there any unexpected costs? Did workers show up on time and clean up after finishing the job? You also could tell the contractor that you’d like to visit jobs in progress.” —Federal Trade Commission

In addition, you should factor in a contingency fee for unexpected expenses, because these are practically inevitable, even for small makeovers. That too, should be between 10 and 15 percent and will allow you to absorb the financial hit which comes with unpleasant surprises.

The point to all of this being a kind of reality check and to determine what you can actually afford. If you don’t have the budget for marble or granite, choose an alternative that’s less expensive. In addition, think about refinishing rather than replacing things such as cabinets and counter tops. Make smart choices which increase the value of your home.

Being Smart and Hiring the Right Contractor

After you’ve established a budget and a likely estimate of the total cost, then, it’s time to get estimates from at least three contractors. When they come to look at your home, be sure to ask these questions before making a decision on which to hire:

• Will you bill be itemized? If you get anything but a straightforward answer, that’s a big red flag. An itemized bill is one that’s transparent and doesn’t contain hidden costs. Everything should be itemized so you know precisely the amount of each charge.
• Is your estimate a fixed price? Here again, if you don’t receive an upfront, honest answer, that’s not a good sign. Some contractors provide bids, which are only estimates and the final price can be much difference than the initial quote.
• How long have you been in business? You want to know how long they’ve been doing projects in your locality. Should you get an answer which stipulates they have just moved from another state or a far away county, that ought to raise suspicion.
• Who are your vendors and subcontractors? This should come without hesitation as it allows you to check out the vendors and subcontractors yourself.
• Can I meet your foreman at another project? Any obfuscation here is a telltale sign that the contractor doesn’t want you to check out other projects.

You’ll also want to ask if they carry insurance and are licensed. You can look up their license and check them out with the local BBB.