“We need to hire a contractor.” As a longtime contractor, I know that few phases can generate more anxiety for homeowners.
A home renovation is an exciting opportunity to reshape your home to fit your family and lifestyle. But bringing a contractor into your home for any length of time is a huge commitment, and with trust in contractors at an all-time low—only members of Congress, car salespeople, and lawyers have a worse reputation—it’s as important to prep for a successful work relationship with a contractor as it is to plan every detail of your dream space.
The good news is that with a bit of knowledge and some thoughtful planning, homeowners can feel confident hiring contractors to get exactly what they want done. I’ll share my advice, gleaned from over 40 years in the trade.
Is working with a contractor the right choice for you?
Deciding whether to work directly with a general contractor or an intermediary design firm who manages the relationship with the contractor for the homeowner is a big first step for any larger renovation or construction project. Working directly with a contractor can save some money and be more efficient since there’s only one line of communication between the homeowner and the team doing the work, but it also can require the homeowner to do more legwork to achieve their design vision, and can require a more hands-on approach to project management.
Working with a design firm tasked with doing that work on behalf of the homeowner can take the onus off the homeowner to familiarize themselves with construction specifics, but it also adds another stakeholder voice to the project. This can result in a game of telephone that has the potential to lengthen certain decisions and lead to increased confusion if everyone isn’t on the same page.
Ultimately, it comes down to the homeowner’s particular preferences for their level of involvement and the time they must devote to the project.
Start with a Plan
Begin any project with real planning. That means writing down exactly what you want done. Not just “remodel kitchen,” but a definitive list of what you want and how you want it done. Begin with a list of the obvious and leave a lot of room for editing. Instead of just “new cabinets,” begin with the style, finish, and the budget range of cabinets you like; maybe even some examples from Pinterest or magazines. Yes, it’s going to take some homework. This will be easier to manage if you keep detailed notes as you decide on what you like. Start a favorites file for your project and break it up by category for manageability: cabinets, flooring, appliances, etc. Keeping it all organized in a spreadsheet helps a lot. Add as much detail and the reasoning for your decisions so you can organize your thinking as well as your product choices. Add as much as you can, even if it may be redundant or contradictory. You can, and will pare it down as you proceed. Organize by room or space.
Materials today are obtained by contractors mostly from retail sources, which means that with a bit of effort and attention to detail you can get a good handle on those costs up front. You may not be able to tell how many two-by-fours you need, but major costs for parts of the project that matter to you from an aesthetic or functional standpoint, such as the square footage for flooring or the type and number of cabinets are a simple thing. These costs are for you only—keep track with a spreadsheet.
There are several sources that can help you here. Homewyse.com is a great resource that gives recent completion costs for construction projects in your area. You can even “build” the project in their app if you want to get into the nitty gritty details. The app can even provide a good idea of the “intangible” of labor costs based on whether it’s done by a licensed general contractor or a smaller specialized contractor. Bear in mind that apps that match you to contractors do not tend to be as accurate in pricing, if they have any. Try to gather information from as many sources as you can in your area and enter this in your spreadsheet.
Write a scope of work
Once you have collected all the details of your project, write a summary or “scope of work.” This is a detailed description for each area where you want work performed. Begin with the basics and move on to the specifics. Write what you can and plan on amending it many times as you work through it. This is the document that you will provide to contractors for estimates, so be as specific as you can.
The scope of work is not set in stone. It should be updated any time you receive estimates from a contractor that includes unforeseen line items (e.g., subfloor replacement, beam reinforcement), so you have the most up-to-date records of what the project will entail as it moves through the design and contract and then construction process.
The benefit of a written scope of work is that you can send this to several contractor candidates and speed up the “interview process” considerably. It’s also a great tool to weed out those contractors that don’t provide written estimates. As an estimator, I detail my conditions (specific costs) every time, so I don’t have an issue sharing this information. Any contractor making a real stab at an estimate, not just picking a number out of the ether, should be willing to share this information in some way.
Once you have at least three candidates, schedule an “interview” conference with them and ask questions. There’s no such thing as a stupid question. Choose two final candidates and ask both for written estimates based on all the information you provide. Ask them for copies of all their policies, both client and employee facing, and a sample of their contract. You want to see evidence that the contractor has planned for any contingencies and are responsible, professional project managers.
Get a written contract
Once you have settled on one contractor, it’s time to execute a contract. What benefits you more is detail, lots of it! What benefits a contractor is less detail, because it gives them more latitude for making their own decisions based on their savings, not on your requirements. Include your scope, and/or the scope of the contractor if it contains all your details. Make sure you include the payment schedule, schedule of the project timeline, including major milestones, and due date (and penalties for missing that date), as well as provisions for resolving disputes. Insist on a written schedule. Get a contact list for all subcontractors and key employees. Get proof of insurance, both liability and workers’ compensation. Make sure this proof is sent from the insurance company directly and insist that you are named as policy holder and additional insured. Make a provision for changes (called a change order) and get these in writing too. LDR Group provides an itemized change order and you can insist on this too, as well as a limit to the “markup.” This is usually stated as “contractor overhead and profit” (we limit it to 15 percent overhead and 15 percent profit). This is important, because change orders are where most contractors generate the highest profit levels.
Get everything else in writing, keep track
As you move forward with your project, make sure you continue to get everything in writing—and continue communicating in writing throughout the process as much as possible so you have records of those conversations. Any major decisions or change orders should be communicated or re-confirmed in writing.
Insist on this in the contract right up front. It’s the best way to protect yourself and the contractor. Require weekly progress reports for larger jobs and weekly in person (or Zoom) production meetings. Remember that the best contractors work with you as a team, so be polite and supportive, but do not be afraid to ask questions and insist on contract completion.
In the end, it’s all about “trust but verify,” and a good contractor will have no problem with a thoughtful, well informed client doing just that.
Jeff Eckes is the CEO of LDR Group, a Passive House design/build/renovate contractor in the Mid Hudson Valley.