how do you know your workers will meet your needs?
The U.S. construction industry is the largest in the world at $1.3 Trillion per year. It is also the least regulated and the easiest to enter and start a business. Most construction companies are owned and operated by three types of people: Tradespeople, Salespeople, and Entrepreneurs. Individually, none of these skillsets are adequate to safely and effectively manage your project and your money. Still, homeowners give these unqualified individuals tens of millions of dollars in down payments and progression draws every day. As an example of a highly regulated city, statistics show that in the city of Houston, Texas more than 4,000 complaints, grievances and lawsuits are brought against LICENSED contractors every year. How can you protect your money and your project?
Vetting a remodeling contractor is difficult unless you are extremely knowledgeable in the construction industry. There are ways you can learn enough about the contractor’s business acumen without being an expert. As always, I recommend you select your builder based upon his or her character and ability rather than by selecting the builder with the best price. See Tips to Hire a Reliable Home Remodeling Contractor.
If you decide to hire an individual trade contractor like a carpenter, painter, or a deck builder, it is more difficult to evaluate the ability of one of these artisan trades. They are widely unlicensed and rarely run a business that is listed on many evaluated search engines like Angie’s List , thumbtack, or Home Advisor. If they are, the qualification process even on these sites rarely goes beyond a cursory background check or verifying an online presence.
Because of the climate of the industry, labor will be a huge risk for your project. A few tips to help include, asking for references of both past clients and ongoing projects. Photos are often good. Photos can also be copied from the web or texted from trade to trade. When your neighbors have work done on their home, watch the project. Notice the working habits of the tradespeople they use. Ask them how the project went. if your neighbor is happy with them ask for the trades’ contact information.
Finally, never give an unlicensed trade money down. Provide the material yourself. Have the trade provide a materials list or have them pull the materials at Home Depot or a lumber yard. Pay for the materials over the phone. Giving money down for materials is not usually a good idea. It creates an opportunity for loss and risks your money and your project. Licensed trades include electricians, plumbers, HVAC contractors. The materials they provide are generally industry specific and are not always available in box stores or building materials retail outlets. They purchase much of their materials from industry specific distributors who deal with and sell to licensed contractors only. As a state licensed contractor, you have recourse if they deal with you in less than an honest manner. So, you are safer when providing a down payment. Even in this case, limit your initial outlay to no more than 50% of the total job.
Craig Walker is a seasoned building industry professional with over 40 years of hands-on experience in architectural design, construction, and project management.