Check Off These Items Before Hiring Your Next Contractor

By Keith Blazek1 Comments
 
Understanding how to work with contractors is important for anyone to understand, but it becomes even more important for self-directed IRA investors since they cannot complete the work themselves on investments held within their IRA. Hiring the right contractor the first time will save you time, money, and headaches down the road. In a recent Eriesense.com article, Patti Orton Kuna outlines a simple checklist you can go through before selecting and hiring your contractor.
 
Finding a contractor
  • Ask your friends, coworkers, family members, or fellow investors for referrals
    • The best indicators are past experiences from those you trust. If they had a positive experience it is likely you will too.
  • If you are a member of any networking or social clubs, these are great resources as well
  • Check your local homebuilders’ association
  • Begin to compile a list before you are in need of a contractor. In cases of emergency, rushed decisions can often be poor decisions.
Vetting a contractor
  • Perform a fact check on any information the contractor provides you
  • If he or she belongs to a trade association, check to see what the requirements are to belong.
    • Does it have a code of ethics, eligibility or performance standards, or required exams or hours of work?
  • Check the Better Business Bureau and other state or local regulatory agencies
  • Ask for a list of references and follow-up with past customers to hear about their experience
Paperwork you need to see
  • A copy of their contractor’s license
  • Insurance certificate
    • General liability and worker’s compensation coverage
    • If they get hurt working for you, you don’t want to be held liable
  • Written warranties
  • A detailed and itemized quote for both labor and materials
  • A written and agreed upon contract, don’t merely accept the one they have if there is something you’d like included
    • Detail the cost, expected work, timeframes, warranties or guarantees, payment plans, and any other relevant details
Be wary if…
  • They ask to be paid entirely up front
  • They only accept cash
  • They are hesitant or unwilling to sign a contract
  • Their work vehicle doesn’t list their business name
  • They are hesitant or unwilling to provide a list of references
  • They don’t want you around when they are working
Add a comment below detailing your experiences or best practices for hiring a contractor. What type of things do you typically check for? Is there anything we missed that people should watch out for?