How to Vet a Contractor Before You Hire
Updated: Aug 28
How Do You Know You Can Trust a Contractor?
We've all seen the stories online: a homeowner pays a contractor a large down payment, the contractor disappears, and the comments immediately fill up with people saying, “Never give a contractor money up front!”
That's not necessarily realistic.
Many legitimate contractors require money before work begins. Depending on the project and the contract, an initial payment may be used to secure your place on the schedule, purchase materials, cover mobilization costs, or begin other project-specific expenses.
The better question isn't simply, “Should I give a contractor a down payment?”
It's “How do I know this is a contractor I can trust with my money?”
That's where vetting your contractor becomes important.
Before signing a contract or handing over a substantial payment, take some time to verify who you're dealing with. A professional-looking truck, a Facebook page, or even a recommendation from a friend isn't enough by itself.
There are several things you can check before hiring a contractor that can help you make a much more informed decision.
How to Vet a Contractor Before You Hire
Hiring a contractor means trusting someone with your home, your money, and sometimes months of your life. A polished estimate or a good first impression isn't enough.
You don't need to investigate a contractor like you're hiring them for the CIA, but you should verify some basic things before signing a contract or making a substantial payment.
Permits
Ask who is responsible for obtaining the required permits before work begins.
Don't assume the answer. Depending on the project and local requirements, permits may be obtained by the general contractor, certain licensed trades, or in some cases the property owner.
What matters is that your contract clearly states who is responsible for permits, inspections, and associated fees.
If a contractor tells you a permit isn't necessary, don't be afraid to verify that with your local building department.
Licensing and Registration
Contractor licensing requirements vary considerably by state and even by trade.
For example, Texas does not have a statewide general contractor license for most residential construction, although certain trades, including electrical, plumbing, and HVAC work, have their own licensing requirements. Some cities may also have local registration or permitting requirements.
Don't simply ask, “Are you licensed?”
Ask what licenses or registrations are required for your particular project and location, and verify them with the appropriate licensing authority when applicable.
The same applies to bonding. Requirements vary by location, project, and type of work.
Warranties and Guarantees
Ask exactly what warranty the contractor provides and get it in writing.
How long does the workmanship warranty last? What does it cover? What isn't covered? Who handles a warranty issue after construction?
Materials and products may also carry manufacturer warranties that are separate from the contractor's workmanship warranty.
Before the project ends, find out what warranty documents, product information, and contact information you'll receive for your records.
Insurance
Insurance is one of the most important things you should verify before hiring a contractor.
Don't settle for, “Yes, I'm insured.”
Ask for a current certificate of insurance and look at what coverage the contractor actually carries. Depending on the type of work and project, that may include general liability, workers' compensation, commercial auto, or other coverage.
Also ask how subcontractors are handled. Does the general contractor require subcontractors to carry their own insurance? How is that verified?
Insurance requirements and workers' compensation laws vary by state, so homeowners should understand what applies where their project is located.
A cheaper bid can become extremely expensive if something goes seriously wrong and the people performing the work aren't properly insured.
References
Ask for references, but don't stop at simply collecting names and phone numbers.
Call them.
Three or four good references can tell you quite a bit if you ask the right questions.
Don't just ask, “Were you happy with the contractor?”
Ask:
What problems came up during construction, and how did the contractor handle them?
How was communication?
Were changes and additional costs explained before the work was performed?
Did the contractor respect your property?
Did the project stay reasonably close to the expected schedule and budget?
Would you hire this contractor again?
No construction project is completely problem-free. Sometimes how a contractor handles a problem tells you more than a project where nothing went wrong.
Online Presence and Portfolio
Look at the contractor's work.
A portfolio can be on a website, social media, a phone, a tablet, or even an old-fashioned photo album. The format isn't nearly as important as the work it documents.
Whenever possible, look for more than polished finished photos. Before-and-after photographs and progress pictures can help show that the contractor was actually involved in the project and give you a better understanding of how they work.
Then search the contractor or company online.
Look for consistency. Does the business name match across different places? Is the phone number consistent? How long does their online history appear to go back? Do the projects, reviews, photos, and business information make sense together?
A contractor doesn't need to be a social-media expert or have an expensive website to be legitimate. You're looking for evidence of a real business with a verifiable history.
Communication
Communication can make or break a construction project.
Pay attention to it from your very first interaction.
You shouldn't expect a contractor working in the field to answer every phone call immediately. But you should be able to establish a reasonable way to communicate and know approximately when you can expect a response.
More importantly, pay attention to how they communicate.
Do they listen to your questions?
Can they explain construction terminology in a way you understand?
Do they answer questions directly?
Are they willing to put important decisions in writing?
Do they become defensive or irritated when you ask reasonable questions about your project?
You will probably be communicating with this person for months. Make sure you're comfortable doing that before construction begins.
Contracts
Never skip the written contract.
A handshake may represent trust, but it doesn't document the agreement.
A good construction contract protects both the homeowner and the contractor by clearly establishing what everyone has agreed to.
At minimum, you should understand the scope of work, contract price or pricing method, payment schedule, allowances, exclusions, change-order process, responsibilities, and other important terms before signing.
Never sign something you don't understand simply because you're ready for construction to begin.
For a deeper explanation, see my Home Construction Contracts guide.
Safety
Safety matters, particularly when people will be working around your home, family, pets, or occupied property.
Ask the contractor how safety is handled on the jobsite.
For larger projects, you may want to know whether the company has a formal safety program, how employees are trained, and how subcontractors are expected to follow jobsite safety requirements.
You can also pay attention once work begins.
Is the site reasonably organized? Are obvious hazards being addressed? Are materials and equipment being stored appropriately? Is the contractor taking reasonable precautions around homeowners, children, and pets?
You don't need to become the project's safety manager. You do need to know you're hiring someone who takes jobsite safety seriously.
Consider Prequalifying Your Contractors
For a large home build or substantial renovation, you may want to take the process one step further and prequalify the contractors you're seriously considering.
This doesn't need to be complicated.
Create the same basic list of questions and documentation requirements for each contractor. That might include company information, relevant experience, references, insurance, applicable licenses or registrations, warranty information, and answers to the vetting questions above.
Using the same criteria makes it much easier to compare contractors objectively instead of relying entirely on price or personality.
Commercial construction has used contractor prequalification for years.
There's no reason a homeowner investing hundreds of thousands of dollars in a home can't borrow a little of that discipline.
The Cheapest Bid Isn't Always the Best Bid
Vetting a contractor isn't about finding reasons not to hire someone. It's about understanding who you're hiring before you give them control of a major construction project.
Price matters, but so do experience, communication, insurance, organization, workmanship, financial practices, and the contractor's ability to solve problems when something doesn't go according to plan.
Do your homework before signing the contract.
It's much easier to investigate a contractor before you hire them than to figure out what went wrong after you've handed them your money.
Check out my post on comparing Bids >>>
Need Help Comparing Contractors?
Choosing a contractor involves more than comparing the numbers at the bottom of a bid. The Texas Bricklady Home Build Package includes contractor-vetting tools, bid comparison worksheets, planning checklists, contract and payment tools, and the Digital Project Planner to help you organize your build from the beginning.
Explore the Home Build Package →
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