You’ve likely seen the story on your local news: A fly-by-night contractor swoops into town and scams dozens of homeowners out of thousands of dollars each before disappearing without a trace.

No one wants to go through such an ordeal. And yet it happens all the time, especially during the summer when more homeowners start home improvement projects.

The vast majority of contractors are honest and trustworthy, but there will always be those who are ready and willing to run a scam and run off with your money. So how can you make sure you find a reliable and reputable contractor who keeps their promises? And how do you make sure you’re hiring the right professional for the job? Let’s take a look.

Do You Need a Contractor or Handyman?

Take a look at your project to-do list. Perhaps you need to replace the roof, fix the leak under the kitchen sink, re-tile the hallway floor, and install a ceiling fan in your son’s bedroom. You’d also like to build a small deck for summer cookouts.

Some of these projects are relatively easy to complete, while others are far more complex. So the question becomes: Do you need to hire a contractor, or will a handyman suffice?

Certain projects require in-depth knowledge and even local or state certifications; for these projects, you’ll need a contractor. Other projects can be tackled by someone who knows how to use a bandsaw or who has the time to fix a leaking pipe; for these projects, you can call a handyman, who will typically charge less per hour or project than a licensed contractor.

Here’s how to figure out which professional to hire for your project.

Handyman

A handyman will typically complete general home repair and routine maintenance projects, such as:

• Replacing a sink
• Installing a new toilet
• Painting
• Cleaning gutters
• Drywall repair
• Installing a patio
• Seasonal maintenance projects
• Minor HVAC repairs
• Flooring repair or replacement
• Yard work
• Fence repair
• Eliminating outdoor mold

These projects are not complex and don’t require much specialized knowledge.

Contractor

Contractors are better suited for larger jobs that require a permit, specialized knowledge, or both. These professionals fall into two categories: general contractors and contractors.

General Contractor

A general contractor (GC) acts as a manager for large projects. They hire contractors, known as subcontractors, to perform specialized tasks such as installing new plumbing, installing new countertops, or rewiring a house. General contractors make sure that all permits are filed, all deadlines are met, and costs stay on budget.

You should hire a general contractor for projects such as:

• Remodeling a kitchen or bathroom
• Building an addition
• Building a new home

Contractors

Contractors are skilled and licensed tradespeople who work independently with several general contractors or with a larger agency. You would hire a contractor for projects such as:

• Building a deck
• Rewiring a home
• Installing a whole-house generator
• Replacing plumbing or installing a water heater
• Installing new windows or doors
• Rebuilding a fireplace or installing a wood stove
• Installing tile or masonry
• Installing an HVAC unit

If you’re still not sure if you need a general contractor, regular contractor, or handyman, follow these rules from HomeAdvisor:

• If the job will take more than a week, hire a GC.
• If the job requires several different pros to complete, hire a GC.
• If the job requires a few permits, hire a GC.
• If these rules don’t apply to your project, you might be fine with a regular contractor or even a handyman.

How Much Will It Cost You?

You may be wondering if you should do it yourself (DIY) or hire a contractor. And if you do hire someone, how much will it cost you?

A contractor’s quote depends on a number of factors: the type of project, how expensive materials are, and where you live. It’s impossible to quote an average price because projects vary so widely.

For example, if you’re thinking about remodeling your kitchen, you’ll likely have to hire a general contractor who will also enlist subcontractors such as plumbers and electricians. The cost for a project like this depends on the scope of the project and average hourly rates for each subcontractor, which can vary widely depending on where you live.

According to HomeAdvisor, average rates for contractors include:

• Electrician: $50 to $100 per hour
• Plumber: $45 to $200 per hour
• Tile Setting or Stone Setting Professional: $863 to $2,681 per job
• Roofer: $7,524 per job
• HVAC: $284(repair) or $4,274 (installation) per job
• Window Installation: $5,274 per job
• House Painting (Exterior): $2,803 per job

Estimating what you’ll pay for a smaller project that requires a handyman is a bit easier. These professionals typically charge less than a contractor; according to HomeAdvisor, the typical cost for a handyman project, nationwide, is $178 to $650.

How to Find a Great Contractor

A quick online search is enough to scare you off from ever hiring a contractor. The Web is full of horror stories from families who hired a contractor who:

• Ran off with their money without ever performing the work
• Did the work so poorly they had to hire someone else to fix the job at double or triple the cost
• Took months or even years to complete a project, for tens of thousands or even hundreds of thousands of dollars over budget

If your area has recently gone through a major storm, such as a hurricane, tornado, hail storm, or flood, you also need to watch out for “storm chasers.” These are contractors who swoop in from out of town to fix homes damaged by a recent natural disaster. While some of these contractors are legitimate, many are just looking to make some quick cash and then hit the road before homeowners discover their shoddy work.

Still, there are plenty of honest and trustworthy contractors out there. How do you find one? It takes time, work, and patience, but your efforts will pay off.

1. Do Your Homework

Websites like Angie’s List and HomeAdvisor help take the guesswork out of hiring someone sight unseen; these are great places to start your search. Each site has an extensive database of home improvement contractors reviewed by verified members.

Another option is to contact your local chamber of commerce or building trade association and ask for their recommendations.

You can also ask your insurance company, even if they’re not paying for the work. Most insurance companies have agreements with reputable local contractors. Not only can you take advantage of the review process your insurance company has performed on these companies, but you might even get a price break based on the relationship between the contractor and your insurance company.

Once you’ve researched your options, make a list of at least three highly rated contractors you want to get a bid from and contact them directly.

2. Get Contractors’ License Numbers

After you create a shortlist of contractors, narrow down your list by calling and asking the contractors for their license numbers and certificates of insurance. All contractors, regardless of the state in which they operate, are required to have a business license and insurance coverage.

Having a business license number will allow you to contact your local municipality and determine whether the contractor is legally in business, while the certificate of insurance will ensure that the contractor is covered in the event anything goes wrong. Good contractors should carry both workers comp and liability insurance through their business. Ask to see their insurance policy so you can review their coverage.

Keep in mind that a business license is not the same as a contractor license. Each state, city, and municipality has different requirements for contractor licensing. Visit HomeAdvisor’s state licensing page to look up your state’s unique requirements so you know what licenses to look for from a reputable contractor.

3. Ask Questions

When it comes time to meet each contractor, it’s helpful to have a list of questions written out so you don’t forget something important. Consider asking them some or all of the following questions:

What Local Trade Associations Do You Belong To?

After the interview, call these organizations up and check that this contractor is indeed a member in good standing.

How Long Have You Been in Business?

Ask for proof for their tenure, since some fly-by-night contractors will claim “20 years’ experience” in the area when they actually only got into town last month.

Can You Give Me at Least 3 Recent References?

The keyword here is “recent.” Good contractors should be ready and willing to share the contact information of at least three homeowners they’ve worked with over the last year. If all they have are old references, it might be a sign that their work quality has dropped.

When you talk to these homeowners, ask them:

• How quickly did this contractor return your phone calls?
• Was the project completed on budget? If not, what happened?
• Did the contractor keep their promises to you?
• Was the contractor responsive to changes with the project? If there was any disagreement, what happened?
• Would you recommend this contractor to someone in your family?

What Timeline Do You Have for This Project? Are You On Any Other Projects That Could Affect This Timeline?

Also ask them about any recent bids they’ve made with other homeowners. They might not have any projects lined up right now, but what happens if two other homeowners hire them later in the week?

What Payment Schedule Do You Require?

Remember, an honest contractor will never ask for the full project amount up front, but most will ask for a deposit and regular payments throughout the project. Make sure you know when payments are due and how much they will be.

Will the Same People Work on This Project Every Day?

If you’re interviewing a general contractor, ask them who will be showing up at your home every day. What kind of vetting process do they use when hiring subcontractors? Will it be the same team of subcontractors every day, or will different teams show up on different days? Find out the details so you know what to expect.

What Should I Do to Get the House or Workspace Ready?

Do you need to move furniture? Take pictures off the walls in adjoining rooms? Roll up the rugs?

This is also a chance to ask if there’s anything you could do to prep the area that might lower the cost of the project.

What Will the Project Look Like, Really?

With this question, you’re asking how the project will affect your life and your family. Follow-up questions could include:

• How loud will the work be?
• How much dust will get blown about?
• How much trash will be generated, and will it all be cleaned up every day?
• Will one of us have to be at home while work is being completed?
• Will you use any tarps to protect furniture and other objects?
• Will your contractors wear shoe protection when they’re coming in from outside?
• Where will you need to store tools and materials during the project?

If it’s a large project, ask if the contractor brings a port-a-potty or if subcontractors will be using one of your restrooms throughout the day.

Some of these questions might seem a little nitpicky, but don’t underestimate how much it might annoy you when a contractor tracks mud all over your carpeting because they didn’t take off their boots. Find out this stuff before the project begins so you can communicate your expectations and save yourself some headaches.

4. Get An Itemized Bid

Every contractor you interview should provide you with an itemized bid. This is a bid that lists, item by item, everything you’ll be paying for. It should include:

• All labor costs (including estimated subcontractor costs, if your project calls for them)
• All materials (including specifics such as paint, drywall, and light fixtures)
• All permit fees
• Any other expenses, such as travel fees the contractor expects to bill for

An itemized bill gives you clear and upfront information about how much the project will cost. It also gives you the power to stay on budget. If the contractor’s initial bid is more than you can afford, you can easily change the scope of the project to better fit your budget. For example, you might decide to go with less-expensive tile or do all the painting yourself.

If changes to your original quote are necessary, document them on your original quote and make sure that both you and the contractor sign it. Your quote should also contain applicable information regarding warranties or guarantees on work performed and materials used.

Keep this agreement in a safe place until your warranty expires in case you ever have to pursue legal action against the contractor.

You also need to clarify whether the contractor’s bid is an estimate or fixed price. Estimates can wind up costing you much more, so find out what factors might affect the final price.

If your contractor doesn’t want to give you an itemized bid, don’t hire them.

Red Flags to Watch Out For

A disreputable contractor can show up any time, at any place. But they often exhibit some red flags you can keep an eye out for.

1. They Solicit Door to Door

Good contractors usually have more work than they can handle and don’t need to knock on doors or put flyers in mailboxes to find work.

Some disreputable contractors use door-to-door solicitations to scam their customers outright. For example, in one of my old neighborhoods, an asphalt resealing contractor would periodically roll down the street, pitching their services to anyone who happened to be outside. One neighbor unwisely hired him, and they agreed upon the price and shook hands on it. No contract was involved.

The contractor finished the job that afternoon and demanded double the price he’d initially quoted. Because no contract was signed, it was a case of “he said, she said.” My neighbor had to take the contractor to small claims court to resolve the issue; he won his case, but not without a significant amount of time and stress.

Another common scam involves landscaping. A truck loaded with trees, bushes, and flowers will drive around neighborhoods, asking homeowners if they want to buy these super cheap “surplus plants” and have the landscape professional plant them in their yard. Usually, these plants are on death’s door, and the homeowner pays good money only to have to dig them up a week or two later.

Be wary of anyone going door to door looking for business. More often than not, this is a sign of someone who’s desperate for work.

2. They Ask You to Get Permits

Reputable contractors take responsibility for getting all necessary permits for a project because they’re the ones who will be talking to the building inspector when they arrive to inspect the work. They file the permit under their contractor license number.

A scammer will ask you to get your own building permit, which means you’ll have to lie about who’s really doing the work. As a homeowner, you can get your own permit for DIY projects, but if someone else is doing the work, they have to get the permit — and, thus, they’re the ones responsible to the inspector. All too often, contractors who request that homeowners get their own permits are unlicensed or have a bad reputation with local inspectors. Either way, run.

3. They Want All the Money Up Front

It’s normal for contractors to ask for some money up front, usually a lump sum amount or a percentage of what they quoted in their bid — typically, no more than 10%. If a contractor wants all the money up front, show them the door.

4. Their Bid Is Way Too Low

You should get at least three bids before you hire anyone, and these bids should be relatively similar in price.

Be wary of any contractor who submits an extremely low bid. There’s a good chance they’re bidding low to get their foot in the door so that later, they can hit you with unexpected charges for material or labor.

Another common scam with low bids involves a contractor saying he wants to use your project for “advertising purposes” or as a showcase piece for his portfolio. Just say no and walk away. An extremely low bid is a sign of inexperience, cutting corners, or worse.

Get a general idea of what your project should cost before you start looking at bids. Check out Remodeling’s Cost vs. Value Report, which lists the typical costs of 30 common home improvement projects by area.

Final Word

It’s scary enough to shell out thousands of dollars or more for a home improvement project, and it’s even scarier when you don’t fully trust the person responsible for completing the work.

Finding a great contractor takes time and research, but it’s well worth the effort. Dealing with someone who’s professional, experienced, and trustworthy will relieve a lot of stress in an already stressful situation and ensure that you get what you’re paying for.

What has your experience with contractors been like? Do you have any tips for finding a great contractor (or any horror stories to share)?