You want to sell your home, but you know you must renovate it first, and that means working with contractors. You need to find a reliable, honest contractor.
Renovation could go really smoothly, or you could lose your shirt and mind in the process. Avoid mistakes; learn about working with contractors before you begin a renovation project.
Coordination of Project
Structuring the project is your first challenge when working with contractors. Will you be the general contractor (GC) and make all the telephone calls to coordinate subcontractors? Or will you hire a GC to coordinate and oversee all the subcontractors?
A good GC knows construction, local codes, and standard practice for the work being done.
You will pay 10 percent to 20 percent more when using a general contractor than if you take the task on yourself. So, if you can manage the job, you could save some money. Being your own GC is difficult work, however.
Locating Contractors
After you decide on your role, you need to find a reliable, honest contractor. Ask yourself, “Who am I looking for? Do I need a plumber, painter, and roofer or am I looking for a GC?”
If you know many people in the business of renovating houses, people who have been working with contractors already, start with referrals:
- How many times have you used this particular contractor?
- How long have you used that contractor?
- How did the contractor handle problems and callbacks?
Referrals are by far the best place to start when working with contractors. When your contractor is highly trusted and your referring contact can say they have been using them for many years, your renovation will go smoothly.
If you have no contacts, place advertisements in Craigslist for the type of trade you are looking for. Some businesses have been working with contractors found through Craigslist for many years.
Scout new construction to see which subcontractors are doing excellent work in the areas you need for your renovation:
- Interior and exterior painting
- Granite counter tops
- Tile and flooring
- Roofing
- Siding
- Framing
- Interior drywall
- Cabinet construction and installation
- Landscaping
You can look at the quality of their most recent work, and you know they specialize in that work.
Keep in mind when working with contractors, some work on new construction but do not do renovations. Driving around older subdivisions is another great way to find subcontractors; older homes are often renovated to make them salable to 21st century buyers, so you can see great problem-solving subcontractors at work.
Go to Facebook real estate groups; post your request for a referral on these public Facebook groups.
When you are looking for a contractor, try to find three to five candidates. Some will be too busy for your job; some will not show up; still others will price themselves out of competition.
Qualifying Contractor
With several candidates to consider, what questions should ask your potential contractor?
If you decided to hire a general contractor, you need to ask more questions than if you are being the GC and only hiring and working with contractors in all the trades.
Remember, your GC will be dealing with much more than a subcontractor.
In Texas, GCs need no license, but in other states, a state-issued license is required. If you are in a licensing state, when working with contractors ask these questions:
- What is your license number?
- Do you carry workers compensation and liability insurance?
- What were the last three jobs you worked on as a GC?
- Can you give me five referrals?
- How many years have you worked as a GC?
- Are there any aspects of a renovation you cannot handle?
If you find an experienced GC, she or he can do everything from below ground level on up to the roof.
If you are hiring subcontractors, ask them about insurance and for referrals, too. You should also ask for a cost per square foot for work such as:
- Roofing
- Tile and carpet
- Painting, both exterior and interior
This is almost a trick question when working with contractors. A good roofer, for example, will not quote a price without knowing the pitch of the roof and the materials you want installed. A good, experienced painter will want to know ceiling heights before quoting a price.
Referrals
When working with contractors, follow up on referrals.
If you accept subcontractor without seeing the quality of work they produce, you may be hiring a headache.
Some subcontractors have horrible craftsmanship. When working with contractors, look at their finished work, whether hiring a GC or subcontractor.
When you meet the general contractor at the job site, ask what specific parts of the project she or he did. Look at the quality of the work. If you like what you see, get a bid from the contractor for your project.
If you are going to be your own general contractor, only some of the subcontractors must have insurance:
- Plumbers
- Electricians
- Roofers
- Excavators and foundation builders
The plumber and electrician should have a license; check with your state on specific requirements.
Some subcontractors will claim they can do tile, roofing and painting. Subcontractors who consistently do the best work specialize; they only do that one trade.
Quality is important, especially working with contractors in trades such as textures (ceilings and walls), painting, and tile work.
Prices and finished craftsmanship vary widely.
Payment
Things can quickly get ugly if, when working with contractors, you structure payments the wrong way.
If you decided to go with a general contractor, you need to take extra caution when making your payment structure.
There are several different options when working with contractors:
- You can pay 50 percent of the cost of the renovation up front so they can get started, but this seldom works to your advantage; a GC can begin, then abandon the job with half your money gone
- You can pay 33 percent of the cost, 33 percent at the halfway point, and the final third when the renovation is complete; again, though, the GC may start, but then abandon the job, keeping the first third
- You can pay the full amount when each aspect of the job is complete to your satisfaction; offer to pay weekly for work completed and invoiced that week
If you are your own GC, inform your subcontractors of the same arrangement. Materials can be paid for through you.
Be honest and up front with your GC and when working with contractors in the trades. Give them no reason to doubt you: pay punctually every Friday.
Paperwork
A detailed contract is needed when working with contractors so your GC and subcontractors know exactly what renovation work to do.
The contract signed by both parties avoids misunderstandings.
Lay out the various stages of the project so everyone knows, week by week, what must be done to earn payments.
The contract also has stipulations like liability for property damage to your own property or neighbor’s property.
When dealing with any GC, or working with contractors, ask for a firm completion date. Include a late charge — $75 a day — for going past the agreed-upon date. Get the GC and subcontractors busy so you can move in or get the house sold.
Hope this information was useful when working with contractors for your real estate needs
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