Going pro: How to select and work with a contractor
by Roger Faris
You may have heard stories about contractors who operate without a license, insurance, ethics or skill. They are famous for disappearing in the middle of a job, leaving unpaid bills, botched work, and other misery in their wake. Adding on to your house or remodeling a space can be disruptive and expensive, but it doesn't have to involve fear and loathing. A successful relationship with a home improvement contractor is possible, despite the many grim stories. The important thing is to do your homework.
The perfect contractor for your project should be hard to find. His or her past clients will not be telling all the world about their discovery of a talented, honest, neat, reliable, available and reasonable builder. They know that too much promotion may affect the available and reasonable factors when the time is right for the next home improvement. Somehow, though, the word leaks out.
A good contractor builds a reputation by creating beautiful projects while keeping the clients happy and healthy. This is a good trick, but a few are able to do it. The main marketing plan for these contractors is usually word-of-mouth. It is always less expensive than word-of-yellow-pages, and yet this method can keep the business calendar filled.
While a solid track record will result in job referrals, the contractor must also have good communication skills to sell his or her services to each new client. I've met a few who get around this by working for one or two wealthy people who keep them busy for years. The rest have to go out to meet new people, communicate skillfully, then evaluate and estimate their projects. On top of their other fine qualities they need to have good business sense, and know how to show up and complete the work on time.
Good contractors want to avoid situations where the customer has little idea of what they want and what it might cost to build. They enjoy working for people who are organized and have done their homework. Preplanning can involve an accumulation of shelter magazine photographs and sketches of floor plan alternatives. This might be enough to get started with a design and build contractor. If, however, you are asking someone for cost estimates and a timeline for a remodel or addition, then a more developed plan is needed. Employing the services of a design professional is an excellent way to discover the best solutions for your needs, and to be sure that every detail is carefully specified.
One of the most important elements of your research is to establish a realistic budget for the project. A good way to find out about cost is to ask around and find examples of successful home improvements which are similar to your plans. Most homeowners are pleased to give a brief tour if you call and explain your need for information. Visiting several completed projects gives you experience with how different levels of quality and the scope of a project will influence the budget. Cost per square foot can range from $50 to over $200 depending on what sort of space is being built and what fixtures, appliances, surfaces and details are included.
There are several varieties of contract agreements. Many contractors and homeowners are comfortable with a fixed-bid which requires the contractor to make careful estimation of all of the costs, and accept possible losses if things don't go as smoothly as expected. Experienced contractors will often protect themselves from some of the risk by adding a safety margin to the bid amount. Some contractors may add a substantial "mark-up" to the cost of materials and labor. This can result in a windfall when a customer picks expensive fixtures and fittings.
Unforeseeable problems and hidden conditions often appear during remodeling projects. They can be solved without great difficulty if the contract is clear about who will bear the responsibility, and how additional labor and material costs will be calculated.
Customers often add to a project or change a few details after the work has started. The original contract is amended through change orders. It is essential that these changes are documented and signed by both parties, since they often add significantly to the final cost. The contractor and client need to meet frequently to sort out problems, make decisions, and have a budget review. If you have been careful in your selection of a contractor, and have been diligent in all other preparations, these meetings can be low stress opportunities for sharing information.
Another arrangement is for payments to the contractor to be based on cost plus a fixed fee to cover overhead and profit. The costs are the amounts actually paid out for materials and labor. In addition, the contractor will record and bill at a contracted rate for the hours spent ordering and acquiring parts, supervising labor, working on elements of the job, and meeting with the client. Overhead expenses are those that the contractor incurs as a result of being in business. These should be listed in detail, and an appropriate fraction of the annual overhead costs assigned to the job. A mutually agreed upon profit is the reward for the contractor. This has to be an amount which will provide the motivation to remain in this dema nding business.
A "cost plus" contract can work smoothly if both parties are clear about all of the details. The books and records must be available for review. Also, major project expenses need to be carefully calculated in advance, so the budget can be established and monitored during frequent meetings. This type of agreement has the most potential to be fair to all concerned, since the contractor is paid for services which are performed.
Both contractor and client should feel that they are on the same side in the home improvement battle. Once you have thoroughly checked references and decided to trust your home and financial health to a good contractor, it makes little sense to start viewing everything he or she does with suspicion. You'll have fewer concerns if you can see the situations from the perspective of the other person. For a revealing and entertaining look at how a home project can interact with human psychology, read House, by Tracy Kidder.
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