Thursday, September 9, 2010

Important things to know when hiring any home service contractor

The term “Licensed and Insured” is, in most cases technically incorrect….or at least can be misleading. There are no special licensing requirements for many home service contractors in Georgia (painters, flooring installers, repair and maintenance contractors, etc. have no state licensing requirements beyond the essential business license). General contractors must be licensed by the state and must prove and carry liability insurance. If you call upon a licensed general contractor to complete a small remodeling, painting, etc. project be prepared for a hefty bill….and here is the real kick in the pants; He is simply going to call a sub-contractor and add his/her management fees!

Any repairperson or contractor you bring into your home or business should definitely have a business license and carry liability insurance. You should positively ask to see it because if you do not, you the homeowner are liable for any injuries or damage caused by the contractor and their employees! You are even liable for any sub-contractor’s employees and their injuries and actions! For example, you hire a contractor…say “Joe’s Handyman Service” to complete some drywall and painting in your home. Now let’s say Joe decides to hire “Mike’s Drywall Company” to prepare the walls for painting. Mike’s employee “Henry” is on the ladder sanding the drywall and he falls injuring his back and leg. Joe does not have insurance or a business license…neither does Mike. Guess who is responsible for all of Henry’s medical bills and time missed from work? YOU, the homeowner are 100% liable! Savannah Renovations, LLC carries a one-million dollar property liability policy and two-million in injury insurance brokered through Morris & Templeton Insurance.

You should always request a quote or estimate from your contractor. This is good for both the home/business owner and the company you are hiring. This works well for both parties to understand the pricing, payment schedule, and the exact expectations of the work to be completed. Verbal agreements can be acceptable if you have worked extensively with the contractor in the past; however, it is always best to have something in writing. This is often one of the most difficult jobs of being a contractor. I view it as Justitia (Lady Justice) holding the Scales of Justice. On one side of the scale is high quality (higher cost) and on the other is reduced-standard (lower cost) job in the estimating process is to find the correct balance. Let’s face it…you are not going to get a 1,600 square foot addition to your home for 500 bucks and a case of beer! I try my best to evaluate each customer and listen carefully to their words as they describe what is wanted and needed. I look at the quality of construction of the home or business to pick up clues as to the cost of construction and quality levels that currently exist. Armed with that information, I gather material pricing and estimate times, add overhead expenses and an estimate is born. I think all contractors do try to offer the best prices that we can…but in every case, there is a line that we simply cannot or will not cross. There is a point where money is lost…there is also a point where what is asked for could damage a companies reputation.

Once you have your estimate, beware of the bargain.
Most people like to get the most they can for the best price. Who would not? If you do have a bid that is much lower than the others are, and you feel that the contractor is reputable and offering an honest service…you should at least ask questions. It is possible that one of the contractors missed something important, or is quoting on different materials. These are important things to know when you are paying for any product or service.

Be careful of front-loaded payment schedules.
If any company needs more than 10% to begin your project this should be a huge red flag! The only reasons they would need the customer to pay up front is that the company is not solvent (which is bad enough), or worse…it could be a scam called “spiking the job” where a company takes a large amount of money upfront. Then by completing a small amount of work can avoid criminal charges….leaving you, the customer to deal with the civil issue of trying to get your money back. Being a business owner, I can certainly understand that contractors fear not being paid. They also would like some sort of “commitment” on the part of their customer. However, I also know that if excellent service and quality are offered…customer dead beats are usually not an issue. As a matter-of-fact in seven years, Savannah Renovations has never had a delinquent customer!

My last thought for today…

Know exactly what you want and expect before work begins.
To put is simply…
“While you are at it” can be the five most expensive words in the English language!


  1. Indeed! Hiring a licensed home contractor is very important, because a licensed contractor is a professional and has a lot of experience in doing home projects. Anyway, if you have time, you can also read more information about home contractors.

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