INDIANAPOLIS — Before hiring a contractor, do your research beyond online reviews. This week’s “Tip of the Week” offers ways to check a business, compare bids and protect yourself before work begins.
Start by searching for the business on BBB.org. Review customer feedback and complaints, and look for any Better Business Bureau alerts about patterns such as unfinished work.
“Look at how they’re responding to when something goes wrong, because that’s a really huge indicator of how they’re going to treat you as a customer if something goes awry,” said Jennifer Adamany, a spokesperson for the BBB Serving Central Indiana. “Sometimes these projects don’t go the way that anyone plans. So, if they are defensive, if they are not responding at all, that really is a key indicator.”
The BBB also issues alerts about patterns of concerning behavior, legal disputes or government action, Adamany said.
“They’ll put alerts to warn consumers if they’re seeing any patterns of or legal disputes or government action that consumers should be aware of,” she said.
Check your state’s secretary of state database to confirm the business is registered and in good standing. In Indiana, you can also search court records through MyCase.IN.gov. Search for the business and the owner or representative, and review any criminal cases or civil lawsuits.
Ask the contractor for references from recent local projects. Contact the references to ask what work the contractor did, whether the work met their expectations and whether the contractor stayed within the estimated budget and timeline. If possible, inspect the work yourself. You can also ask whether the contractor belongs to a professional association with standards or a code of ethics.
Get at least three bids from different businesses and make sure each bid covers the same work and materials. The lowest price may not be the best choice. A bid well below the others could mean the contractor plans to cut corners or does not understand the project requirements.
“Getting multiple quotes from multiple companies because some may come in with really low pricing that’s enticing, but you’re going to get less quality work or less quality materials for that,” Adamany said.
Be cautious if you find little information about a business. A company can close and reopen under a different name, Adamany said.
“If they’ve been around for a long time and there’s no digital footprint of them, it could be an indicator that it’s a scam,” she said.
Do not rely only on reviews on Google, Facebook or Yelp. Businesses may solicit favorable reviews or pay for them, Adamany said. The BBB accepts reviews and verifies them, she said.
“There’s a lot of ways for businesses to garner reviews that are favorable,” Adamany said. “Sometimes they will flat out just ask, give us a five star review, which is misleading because you want honest feedback from customers that it serves, and you can pay for reviews nowadays. That’s why I think using sources like BBB that will take reviews, but they verify it.”
Before work begins, get a written estimate and a complete contract signed by you and the contractor. Do not let anyone pressure you to sign before you are ready. Read the agreement and make sure you understand it. It should include contact information, start and completion dates, a detailed description of the work, material costs, payment terms and warranty information.
The contract should also say who will obtain building permits and handle cleanup. Include all verbal promises in writing. Ask how much work the contractor plans to subcontract and request information about the subcontractors. Ask questions about anything you do not understand, and never sign an incomplete or partly blank contract.
Confirm that the contractor has the licenses and insurance required where you live. Licensing rules vary by location. In the United States, contact your state licensing agency. In Canada, requirements vary by province; your local BBB may be able to help. Once you have the contractor’s insurance information, call the insurer to confirm coverage for workers’ compensation, property damage and personal liability.
Make sure the contractor has the required building permits before the project starts. Contractors usually obtain the permits, but the customer may pay for them. The contract should explain who is responsible. Request that a local building official complete final inspections before you make the final payment.
Understand the warranty and how to request service if problems arise after the job is done.
Set a payment schedule and do not pay the full amount upfront. Arrange payments so the final payment is due only after the work is complete and you have inspected it. Avoid cash. Make checks payable to the company, not an individual, or pay by credit card. A credit card may give you a way to dispute a charge if the contractor does not complete the work as agreed.
When the job is complete and you have made the final payment, ask for a receipt marked “Paid in Full.”
