A roof is just one example, but here’s a list of issues that I’ve been hired to fix over the years caused by homeowners hiring contractors that did not do as advertised. If you get a bid that is way lower than the rest, you should be on high alert and confirm things as described below before you commit to anything.
For starters, I personally only work with local contractors that have a good reputation built over years of good service. I’ve had many people call after a storm, for example, that gave money down to some roofer or other vendor and the company didn’t even exist or was out of state. Often the check is cashed and you never hear from them again. Ask for proof of licensing, insurance, bonding. Confirm that the company is in good standing and ideally there’s a local contact that you know how to reach if problems arise.
When you do select a contractor, make sure you have a written contract that is signed by the contractor. In that contract, you should be able to confirm exactly what the scope of the job is, what materials are being used and the cost. Far too often a dispute arises and if there is a contract, it just gives a one sentence description of the project and the total cost. Pretty hard to confirm what was really agreed to in the beginning if that’s all you have on paper. If you agree on changes during the project, get a written change order that explains the change and the adjustment to the final cost.
Lien waivers may be appropriate. If contractors or suppliers are not paid on a job, they may have the right to file a lien against your home. This lien would have to be dealt with before you could sell or refinance your home. The biggest issue is that this lien could be filed by people you don’t even deal with. In other words, you may have paid the contractor but if he didn’t use that money to pay off subcontractor or suppliers, they can still potentially file a lien on your home. To avoid this risk, you can demand that your contractor provide lien waivers proving all subs and suppliers are paid before you then pay the contractor.
Similar to liens, as the homeowner you are ultimately responsible to follow zoning laws, building codes and so on. Most homeowners just assume that their contractor knows what they are doing and applies for all needed variances, permits and so on. My experience is that you can’t assume. Many projects are finished without pulling permits or permits were obtained relying on incorrect information. In the end, if you discover that your home is too close to a lot line, for example, that is your problem – it’s not a good excuse to argue that you relied on your builder.
In the end, taking the lowest bid might not be the best choice.
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