What warning signs should I look for before hiring a contractor or installer?

Quick answer

Be cautious of contractors who lack proper licensing/insurance, push for large cash deposits, give vague or lowball estimates, refuse permits or written contracts, have poor or no references, communicate inconsistently, or won’t commit to a clear timeline and payment schedule tied to milestones.

What to watch for (major red flags)

• No license or can’t provide proof of insurance (general liability and workers’ comp).
  
• Cash-only or large upfront payment requests (over 20–30% on most residential jobs).
  
• Unusually low bid compared to others, light on detail.
  
• Vague, one-page contract without materials, scope, schedule, or warranty spelled out.
  
• Refuses to pull required permits or asks you to pull them for them.
  
• No local references, poor reviews, or won’t share recent jobs and supplier contacts.
  
• High-pressure sales tactics (“price good today only”), or unrealistic timelines.
  
• Won’t provide lien waivers from themselves and subs.
  
• Unmarked vehicle, no business address, burner phone, or only social media presence.
  
• Sloppy site walk: no measurements, doesn’t ask questions, dismisses code/safety (e.g., lead-safe practices).
  
• No written change order process or warranty.

How to vet a contractor (step-by-step)

1. Pre-screen (online and phone)

   • Look up the business on your state’s license board. Confirm license status and complaint history.
     
   • Check insurance: ask for a Certificate of Insurance (COI) sent directly from their insurer.
     
   • Read recent reviews (2–3 years) and scan photos for quality and consistency.

2. Interview 2–3 contractors

   • Ask about similar jobs, crew vs. subs, who’s on site daily, and lead time.
     
   • Discuss permits, inspections, and cleanup/dust control (HEPA, plastic containment).
     
   • For pre-1978 homes, ask for EPA RRP certification for lead-safe work.
     
   • Request 3 references from recent jobs and one supplier reference.

3. Get detailed written estimates

   • Materials by brand/model or specs, labor, allowances, exclusions, timeline, and payment schedule.
     
   • Apples-to-apples: make sure each bid uses the same scope.

4. Verify and compare

   • Call references: ask about punctuality, change orders, budget drift, cleanup, and post-job support.
     
   • Call the supplier to confirm they actually buy there and are in good standing.
     
   • Question outliers: a bid 25% below others often means shortcuts or change-order traps.

5. Contract review

   • Must include: scope, materials, start/finish dates, permits, insurance, change order process, cleanup/disposal, warranty, and payment tied to milestones.
     
   • Add a retainage of 5–10% until final inspection/punch list is complete.

6. Before work starts

   • Confirm permit is issued and posted, and inspections scheduled as required.
     
   • Exchange lien waivers with each progress payment.
     
   • Set communication plan (who, how often, and when).

Tools and materials you’ll use

• Smartphone (photos of site, permits, and progress).
  
• Notebook or project checklist (scope, questions, meeting notes).
  
• Computer/browser: state license lookup and insurance verification.
  
• Simple moisture meter and tape measure (to discuss scope for rot/water issues).
  
• File folder or cloud drive for contracts, COIs, receipts, and inspection reports.
  
• Optional: HEPA-rated respirator and safety glasses if attending dusty site walks.

Safety and compliance cues on-site

• Good sign: crew uses PPE, ladders are tied off, dust containment is up, cords are managed.
  
• Bad sign: fuel stored indoors, missing guards on saws, no masks during demo, blocked exits, or uncovered openings. If they’re casual about safety, they’re usually casual about quality.

Payment and insurance benchmarks

Typical deposit: 10–20% (some states cap at 10% or $1,000, whichever is less)
Progress payments: tied to milestones (e.g., demo, rough-in, inspections, finishes)
Retainage: 5–10% held until final completion and inspections
Insurance: General Liability $1M per occurrence / $2M aggregate; Workers’ Comp if they have employees

Tips for best results

• Ask for a project schedule with key milestones and inspection dates.
  
• Require daily cleanup and specify debris disposal and protection of floors/landscaping.
  
• Use a written change order form for scope/cost/time changes before work proceeds.
  
• Photograph pre-existing conditions and progress to reduce disputes.
  
• For structural, roofing, electrical, or plumbing: verify the specific license classification.

Common mistakes to avoid

• Paying most of the job upfront or in fixed weekly amounts unrelated to progress.
  
• Accepting a handshake deal—always get it in writing.
  
• Not defining brands/grades, leading to cheap substitutions.
  
• Skipping permits “to save time.” This risks fines, safety issues, and future sale problems.
  
• Ignoring warranty terms (length, what’s covered, response time).

Costs and timelines to expect

• Getting 2–3 bids: 1–3 weeks depending on complexity.
  
• Permit issuance: 3 days to 4 weeks (varies by jurisdiction).
  
• Contract attorney review (optional for big jobs): $150–$400.
  
• Lead times for quality pros: 2–12+ weeks. Long lead time isn’t a red flag; it often signals demand and reliability.

When to bring in additional professionals

• Large remodels or additions: hire a residential design pro or structural engineer to define scope and reduce change orders.
  
• Contract clarity: for projects over $25k, consider a brief lawyer review.
  
• Quality oversight: an independent home inspector or owner’s rep can perform mid-project and pre-final walk-throughs.

Practical example

If three bids for a bathroom range from $14k to $18k and one is $9k with a one-page estimate and cash-only request, that’s a strong pass. Choose a detailed mid-range bid with a milestone-based schedule, specified materials (e.g., Schluter waterproofing, porcelain tile brand), permit included, and a 1-year labor warranty.

Staying alert to these warning signs—and following a clear vetting process—protects your budget, your home, and your timeline.