Our Approach for Choosing a Contractor

As we're getting older, we are having contractors do more of the repair and maintenance work around our house. In our area, we usually choose company with a good reputation, especially if neighbors and friends have referred them. The cost is usually on the higher end of the estimates, but the work and follow-up is also better.

Recently, I've had to help mom with some property. Since I live a long distance from my mom, I've had to do more due diligence than usual, because I don't have neighbors and friends in the area. Here's what I did to identify a contractor for the work on my mom's property:

Ask for local referrals. In this case, I checked with local government officials for their recommendations since the work was regulated. In some cases, I was given a specific name and in other cases, I was given a list of approved contractors.

Get at least three estimates. For me, getting estimates is an educational experience. I usually ask lots of open ended questions and learn about how contractors think about and do their work. Having three estimates gives me a better understanding of the range of costs for the work.

Check Better Business Business Ratings. I check the rating (A+ to F) and look at the complaint history. Most important to me is a low level of complaints and 100% resolution.

Get a copy of insurance coverage. For us, it is important that the business carry general liability, vehicle and worker's comp insurance. Otherwise a homeowner could be liable for any damages or injury that occurs during the project. In my mom's case, her own liability coverage would not cover any suits against the homeowner for damages caused by a hired contractor.

After getting all the above information, we chose a contractor who best met all the criteria. For reference, we gave the job to the contractor with the middle price estimate.

For our own work, we were regularly doing the first three steps, but were not always doing the insurance verification with the larger, well known companies in the area. However, we have decided to now include insurance checking even for large companies, since it is better to confirm than to find out a company has let it's insurance lapse.

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This is not financial advice. Please consult a professional advisor.

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