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Mike Holmes Reveals the Red Flags to Watch for When Hiring a Contractor

Mike Holmes Reveals the Red Flags to Watch for When Hiring a Contractor

I’ve been in this business for a long time, and the No.1 question I get asked is “How do you hire the right contractor?” Renovations can cost a lot of money – YOUR money – so it’s important to invest the time in finding the right person for the job. One thing to keep in mind is that good contractors can’t start next week. So if you call up a contractor, have them take a look, get a quote, and they’re ready to start tomorrow; this is a definite red flag. Here are some other things to look out for when looking to hire a contractor.

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  1. Free Quotes

A quote is a basic breakdown of a job that includes general estimates on such things as demolition, framing, drywall, painting, carpentry, flooring, electrical, plumbing and HVAC. The quote is supposed to give you a general idea of what a proper job will cost. A good contractor will charge you for a quote rather than advertising one for free. Why? Because a good contractor is a busy contractor. They don’t have a lot of time to look at a job and give a proper quote, so when a client is willing to pay for a quote, it lets the contractor know that they are serious about the renovation. So, be wary of those contractors who offer free quotes.

2. Flimsy Estimates

To me, a quote doesn’t really give you enough information to make a smart decision on a contractor. I also want to see a detailed estimate before hiring someone, and that will cost you too as a detailed estimate takes time to put together. A detailed estimate is a pages-long document that lists every aspect of a renovation, from specific materials being used to required permits (if necessary). It will help you make the right decision when selecting a contractor because it helps you compare apples to apples. Why would one contractor charge you $75,000 for your renovation and another charge you $45,000? It could be the brands they’re using, or the materials. The detailed estimate will show you the specifics. So don’t settle for a flimsy, one-page estimate.

3. No Contract

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It is the contractor’s responsibility to supply you with a contract containing every detail about the work that will be completed on your property.  The contract should include estimates of all materials being used, a list of all sub-trades, start time and end times, what happens in the event of a change order, and a payment schedule tied to milestones or stages, not dates. A contract should also contain information about the contractor and the individual’s business, like a clause showing proof of insurance, so if they get injured while working on your home, they’ll be covered by their own insurance. Another piece of important information is the contractor’s business number or GST/HST number. You can use this number to search the GST/HST registry to make sure the contractor’s business is registered. A contractor is not a contractor without a contract. Don’t get burned; make it right and get a detailed contract.

4. Money Down

A good contractor shouldn’t ask for more than 10% as a deposit or retainer. Any contractor who doesn’t have enough money or stock to get a job started either isn’t doing many jobs, or their business isn’t doing so well. And these are things you need to be concerned about. Why would a contractor need money today to start tomorrow’s job? A deposit or retainer only serves one purpose – it’s a security measure for the contractor and lets them know that you’re serious about the renovation. So a contractor who asks for more than 10% is a definite red flag.

5. Referrals

Referral sites can be good tools to use when researching a contractor, but don’t just trust what you read. I’ve heard stories of people being burned by a contractor who goes belly-up, even though the contractor had stellar reviews on a referral site. You need to research the referral site too. Who writes the reviews? Does the website do background checks on the contractor? Are they recommended by other pros in the industry? If you can, pick up the phone and contact a client directly. Keep in mind that experienced contractors don’t just need referrals; they need a few good jobs under their belt, insurance, integrity, and a network of professionals. Word gets around fast; research beyond the 5 stars on a referral site.

Do your research and pay attention to those red flags. Protect yourself and the money you’re investing in your renovation. Plan it right, hire the right professional and you’ll be alright!

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