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Get Bids on Your Job
It's usually a good idea to ask at least three contractors to estimate the costs of your project. This is normally a free service and it helps prepare you for negotiating a final contract. Make sure that the bids detail the scope of the work, the types of the materials that will be used, and the total cost of the project.

Normally, the costs of a project are either set at a fixed price or "cost-plus." In a fixed price bid, the contractor promises to do the work specified at a certain cost. Any changes which you decide to make would have to be negotiated with the contractor separately. In a "cost-plus" bid, the contractor does the work,- submits all the invoices and labor charges to the client, and adds a certain percentage for contractor's profit and overhead, typically 20 percent. If you are borrowing money for the job, it is a good idea to discuss the bids with the lender.

Carefully Compare the Bids
Once you receive the bids, take time to compare them carefully. Be sure each includes everything you want. If a bid contains unwanted or unneeded items, keep these in mind for possible negotiations with the contractor. Remember that the bid is a starting point in your negotiations.

Keep in mind that the lowest bid is not necessarily the best bid. A particularly low bid may indicate that the contractor does not fully understand the scope of the project or is too inexperienced to accurately estimate the amount of labor and materials required.

Beware of Con Artists
Door-to-door fraud is a growing problem in the United States. Contractors do not normally solicit work in this manner. Here are some things to look out for:

• Arrival in an unmarked truck or van
• A "contractor" claiming "We've just done a job nearby and have some material left over, so we can do the job for half the price."
• A post office address with no street address (and even a street address should be checked), or a phone number that is just an answering service.
• High pressure sales tactics
• Refusal to give you a written estimate, contract, their contractor's license number, or local references.

Signing A Contract
Once you've agreed on a bid with a contractor, get it in writing. A contract should be written and explicit in detail. It should include:

• An exact description of all the work to be performed
• A list of the materials to be used which defines textures, brands, colors, sizes, and models
• The total dollar amount of the contract and a schedule for payments. Be very cautious about a contractor who demands a large payment up front (50 percent or ...more). Contractors are accustomed to pay-as-you-go schedules or waiting until after the job is done.
• Any promises made by the salesperson/contractor
• Who will be responsible for getting the necessary building permits
• The starting and completion dates
• Any warranty (for example, a Home Owners Warranty) and a holdback clause which allows you to withhold final payment until
..sometime after the job's completion to allow you time to inspect the job. If there are any problems, this can serve as an incentive
..for the contractor to fix them.
• Cleanup. This item is often neglected, but it should be considered especially if a good deal of debris will be generated.
• The contractor's signature as well as your own.

Disclosures and Liens
A contractor's bond may not be enough to cover a claim which might arise from the work done under your contract. If your job costs $1,000 or more, the contractor must give you a disclosure statement which contains the contractor's registration number, bond information, and a warning against "materialmen's liens."

Under a "materialmen's lien," the contractor, any subcontractor, or material supplier for your project can go to court and try to take possession of your property if they are not paid. As a precautionary measure, you may request that the contractor provide you with original "lien release" documents from each supplier or subcontractor on your project before you make final payment. The contractor is required to provide you with further information about lien release documents if you request it.

FINAL ADVICE (Please Read!)

When hiring a contractor there are many things to consider. Obviously cost is important, but there are other equally, if not more important factors. Value for your money, is what you ideally want to achieve, i.e. you feel you have received a quality product and service for a fair price. There is an old saying in construction, "The sweetness of a good price is long forgotten after the sour taste of a poor job!".

Qualifications, experience, licenses, and references are important points to consider when trying to determine which contractor is right for the job. If you feel a contractor is reputable and will stand behind their workmanship it is often worth a little more. Selecting on price alone will, more often than not, lead to a lesser quality of work and a job that is not guaranteed. This is usually because the contractor believes the low price they quoted is good enough on its own or they may have gone out of business because they never achieved a reasonable profit on their work.

When receiving more than one quote from what you feel are quality firms, the next most important factor is to ensure the work scopes are the same and all estimates are based on similar materials both in quality and quantity. The quotes should also provide detailed estimates outlining exactly what is included and what is not, as well as terms and conditions of the warranties. If there are material selections to be made at a later date, or undecided at the time of the bid, ensure an allowance figure is included or you may receive a big surprise when your contractor says, "I never allowed for that in my price!".

If one quote seems excessively high or low it usually means the estimate is not based on the same work of materials. Contact the contractor at this point and ask why; there may well be good reason.

Once you have made an initial decision based on price and workscope, you should inquire if the contractors experience and qualifications fit the type of project you are undertaking. There are a lot of excellent home builders with little or no experience in renovation or restoration work (there is a big difference). Ask for references and follow up, if you don't receive the references you request, you may want to reconsider.

Finally, you should ensure the contractor carries all necessary licenses and insurance to carry out the project. The contract should be on company letterhead and signed by a representative of the company. Contracts should also outline payment terms, conditions, as well as who pays for any hidden work and how change orders will be handled. A start and completion date may also be necessary in some instances.

Clear and honest communication between all parties can make even the longest project a little more palatable.

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