Three things to settle before anyone digs: written estimates, who handles the permit and 811, and a written contract.
Before you pick one
- Get several written estimates. The FTC reminds homeowners the lowest bid may not be the best choice.
- Check the license. Many states, but not all, require contractors to be licensed or bonded. Our city pages say what we could confirm for each city.
- Ask for insurance certificates. Without current coverage, the FTC says you could be held liable for injuries and damage during the job.
- Ask who pulls the permit and who calls 811. A competent contractor gets all necessary permits before starting work, and someone has to contact 811 a few business days before digging. How 811 works.
The contract
Ask for a written contract even if your state doesn't require one. It should spell out warranties on materials and workmanship and who honors them. If you sign at home, it should state your right to cancel within three business days. The New York Attorney General's office adds that changes agreed out loud need to go into the written contract, because the contractor is only bound by what it says.
Paying
Some state laws limit how big a down payment a contractor can ask for. Boston's consumer affairs office advises paying no more than a third up front and getting a receipt for each payment. Hold the final payment until the job is done and any required inspections are finished.
Red flags
The FTC lists a contractor who only takes cash, wants everything up front, or pushes a lender they know among the signs of a home improvement scam. The BBB calls cash only with no receipt a big red flag.
Sources: Federal Trade Commission: Hiring a Contractor (March 2014 booklet, via govinfo.gov); New York State Attorney General: Hiring a Home Improvement Contractor tip card (PDF); City of Boston Consumer Affairs: Home Improvement and Contracting Tips; Better Business Bureau: 10 mistakes to avoid on a home improvement project; 811 (Common Ground Alliance): Before You Dig.