Sometimes you need to spend big money on your house. In the case of a storm it may be paid by insurance, but sometimes, you need to replace an aging mechanical system or other part of your house and the responsibility is all yours. It can be intimidating to go through the process of selecting a contractor for a home project like this, because the job probably isn’t inexpensive, and the whole process is a disruption in your daily life. Whether you’re talking about replacing a furnace, remodeling a room, or adding-on, you should consider this a guide for how to go about the process and what to consider along the way.
There are 6 steps to this process including:
- Preliminary Research
- Collecting Bids
- Weighing bids and options
- Work Completion
In this post, we’ll talk about how you should go about each of these to make sure you get the best work possible at a price you can be happy with. Just like buying a house, being an educated buyer here ensures you get the best work at the best price available.
Before you jump in to getting bids, it helps to know what you can expect. For this example, let’s consider a the purchase new furnace and install, but you can translate this into an addition or a new roof pretty easily. Start by finding out what is currently installed and consider how it’s working for you.
- What are the specs of what you are replacing or improving (size, power, model number, name etc.)?
- What do you hope to improve? (Reliability, energy efficiency, additional features and technologies)
- Are you replacing “with kind” or are you looking to dramatically change characteristics? If you are going to a high efficiency furnace from a standard efficiency unit, the wiring, plumbing and layout may change significantly.
- Get estimates of cost using estimators like HomeAdvisor and their True Cost Guide.
You may not start out knowing all of these items, but at least a little familiarity will help you in dealing with contractors, and your confidence in your ultimate decision will go up over time because of it. If you can, spend some times looking into the current technologies and do a little reading on the internet – it can really payoff in the long run. Using Google, you could search “best high efficiency furnace” and come up with a search that leads you to additional questions or answers some of your basic questions.
Often people look at this the wrong way – this process is about more than just the lowest price. You may find the lowest bid is not the best bid, and I can guarantee you’ll learn more about your project along the way. To start this process, ABSORB all of the information you can about contractors. Some way to do this include:
- Google Searches (i.e. Plumbers near Minneapolis)
- Ask friends or colleagues
- Referrals on websites like Nextdoor
- Ask for Recommendations on Facebook or other social media sites.
- Look at the coupons and advertisements that show up in your mailbox*
*Experience shows to exercise caution on coupons – more on that in the next sections.
Once you have a list of names and contacts, it’s time to arrange bids. Depending on the job, a bid can take 30 minutes to a couple of hours – someone will usually need to be present, especially if the job requires the estimator to get in the house.
Rules for the Estimate / Bid Process
Once you’ve got a little background information, it’s time to call companies to provide estimates. Not everyone you call would/should get the opportunity to bid and your phone conversations and emails will determine that. Use your knowledge gathered already along with your gut reaction when talking to people. When you’ve scheduled your estimates, here are some things to think about:
- Be Present – you don’t need to hover over their work, but check in and ask questions. You wouldn’t make another large purchase and let the transaction happen behind your back would you?
- Ask WHY – why does the company or technician prefer a certain product or method.
- Gauge Professionalism – Does the company take pride in their work. Does it show in their uniform, vehicles, tools? Are they on time? Do they take off their boots or wear shoe covers?
- Pay attention to what they say and do not say – if the estimator says “I forgot” or makes any excuses for anything – can you honestly count on them to do the best job?
- Determine what, if any, of the work you will be responsible for – Do you need to arrange for any portion of the work or permitting process? It’s unlikely that you would have to arrange for the above, but knowing weighs into your ultimate decision.
- Ask about available promotions and rebates – this is especially important when installing high-efficiency appliances/materials in homes. If you have a coupon, don’t mention it now.
- Get a timeline – how long does the work take? When could work start? What can I expect?
- Ask for References – in today’s digital landscape, this may not be strictly necessary, but how they respond should tell you how likely you are to find a GOOD reference. In the next section we’ll discuss online reviews.
How many bids should you get? That’s up to you, but I would say not less than 3 estimates in your hand is ideal to make an informed decision. More can be better, but even three in hand means you likely called half a dozen contractors.
Weighing Bids / Options
When you’ve gotten a variety of estimates to complete the work on a large home project, you should have an idea of the expectations of cost and related concerns. You might even have an idea of the winner, but now is not the time to rush. Collect your bids and compare using four areas of importance along with the following criteria and questions as a starting point
Your bids should fall in line, and generally be within a reasonable price range. You COULD eliminate high and low bids, or just high bids, but it helps to know WHY those bids might differ.
- Is every person offering the same kind of work or specs?
- How do they plan to go about the work?
- Are promotions or coupons reflected in the work?
In my experience, installers offering coupons often inflate their prices and drop them to a more normal range via a coupon. In most cases, you don’t even have to mention the coupon you saw in the mail as it will be added to the bill. Most installers/contractors will also offer a discount for cash or check payment in full – actual amount may differ by contractor.
- What guarantees or warranties are in place on work and materials?
- What are some long term considerations of the bid? (If I go with a different product, will it have a longer usable life than another bid? If I plan to add on to my house, will I need to re-visit the work done here before it has come to the end of its life?)
- In the case of building projects, determine how materials surpluses are handled. Can you expect a credit for overages?
In today’s digital age, you could select a contractor for a large home project just buy looking at their google reviews and ratings, and while it might be tempting to do so, it’s worth digging a little deeper.
Earlier we mentioned asking for references. This can be a good way to get impressions of people who have had work done, but don’t expect negative reviews among those provided. If you have access to sites like Angie’s List or other membership based services, this can be helpful, but rest assured, someone has written something about a company on Google or Facebook. Remember though, that critics are often the loudest and use the following rules when evaluating reviews:
- What is their overall rating score?
- How many reviews do they have?
- How does the company RESPOND to negative reviews?
- What is their social media presence?
Good contractors are not always good social media managers, and that’s fine, but if there are very few reviews and a high score, that deserves a little more digging. If they don’t respond to negative reviews, or get snarky and unprofessional, that says a lot about that company to a consumer. If they ARE active on social media, all the better, but sometimes that may be all there is, especially with a new company. In that case, it’s important to be aware of a companies age.
Don’t forget tried and true resources either, such as the Better Business Bureau. While there is no one place to find all about a company,
With the other portions of your decision process done, you can focus on the timeline. Determine when the work can be done – if you’re talking about heating and air conditioning, or a new roof following a storm, you may have to wait a little bit before work begins. If someone else can get you in sooner, that may matter more than the bottom line price of the estimate.
How long will the work take? Some jobs could take a part of a day; others might take weeks or months. You should already have an idea of this, but if one contractor is suggesting taking a lot more or less time than the competition, you might want to know why.
After selecting a contractor and setting a date for work to begin, make sure you need to know what preparations should be made before hand.
- Do you need to remove furniture or will the provider do that?
- Is there anything you need to arrange for in terms of permits, dumpsters, etc?
- Does someone need to be present the entire time work is completed?
- What additional cleaning or moving of items will make the job go smoother?
Congratulations! At this point either the work is done, or soon to be done. You’ve determined how you are going to pay for this large home project, and based on what you know, should be pretty comfortable with your decision. The time to enjoy is soon, but there are a couple additional items to consider. Because this is a large job, your contractor wants to ensure they get paid. Often they have ordered materials well in advance of your job, and they have scheduled others after you so don’t have the opportunity to re-schedule easily if you back out. Many contractors protect themselves with something called a Lien.
What’s a Lien?
In short, someone places a claim on the value of your house. This is called a lien, and if placed by the contractor, should be for the amount of the estimate including materials and labor. If you didn’t pay up, then they can collect on this at a later date. When you go to sell your home some years down the road, this can be an issue that needs to be dealt with, or you can ensure you document your complete and full payment to avoid this.
Rules for Payment
- Get everything in writing, and document checks written, dated invoices, completed work, etc.
- Request a Lien Waiver. Save this with other documentation in your important records. If you are planning to do work immediately before selling your home, you may need to provide these to the title company to close the sale.
- Before paying, ensure that the work is done to your satisfaction and as written.
- Many projects require permits to be pulled and closed. Verify if this has been completed and any inspections done or scheduled to be done.