How to Hire a Contractor: A Complete Guide | Contractor Revenue Authority

Step-by-Step: How to Hire the Right Contractor

Define Your Project Clearly

Before contacting any contractor, understand what you need. Clear project scope saves time, reduces confusion, and helps contractors provide accurate estimates. Note what is broken, what you want changed, and any constraints (budget, timeline, living situation during work).

Homeowner tip: Write down your project in 2–3 sentences. If you cannot describe it clearly, contractors will struggle to give you accurate pricing.

Verify Licensing and Insurance

Every contractor you consider should carry valid general liability insurance and appropriate state licensing for their trade. Request copies of both before signing anything. Do not take their word for it — verify directly.

Homeowner tip: Ask for license numbers and call your state contractor licensing board to confirm active status. Insurance can be verified by requesting a certificate of insurance directly from their carrier.

Check References — And Actually Call Them

Any reputable contractor should provide references from recent projects. Call at least 2–3 past clients and ask specific questions: Was the project completed on time? Was the final cost close to the estimate? How were unexpected issues handled?

Homeowner tip: Ask references specifically about communication. A contractor who communicated well throughout the project is worth more than one who was cheap but hard to reach.

Get Multiple Written Estimates

Obtain at least 3 written estimates from different contractors for the same scope of work. Estimates should include line items for labor, materials, timeline, and payment schedule. Be suspicious of any estimate that is significantly lower than others — it may indicate corners will be cut.

Homeowner tip: Use a consistent scope when requesting estimates. Changing the scope between contractors makes comparison difficult and meaningless.

Review the Contract Thoroughly Before Signing

A proper contract protects both parties. It should include: full scope of work, payment schedule, start and completion dates, change order process, warranty information, and cleanup responsibilities. Never start work without a signed written contract.

Homeowner tip: Never pay the full amount upfront. A standard payment schedule is 1/3 at signing, 1/3 at midpoint, and 1/3 upon completion. Be cautious of any contractor demanding more than 50% upfront.

Maintain Communication Throughout the Project

Stay engaged during the project. Request regular check-ins. Document everything with photos before, during, and after work. Address concerns early — small issues become big problems when ignored.

Homeowner tip: Establish a primary contact method before work begins. Whether it is phone, text, or email — agree on how and when you will communicate.

Common Hiring Mistakes Homeowners Make

Hiring Based on Price Alone

The lowest bid often excludes important work or uses inferior materials. Compare value, not just price. The best contractor is not always the cheapest.

Skipping License and Insurance Checks

Hiring an unlicensed contractor saves nothing if their work causes damage or injury. You bear liability when proper vetting is skipped.

No Written Contract

Any agreement without a written contract is extremely difficult to enforce. Verbal agreements leave homeowners with no recourse for disputes.

Paying Too Much Upfront

Large upfront payments give contractors little incentive to complete quality work on time. Spread payments across project milestones.

Not Checking References

References from the contractor's own list are useful, but they can be curated. Ask for references from jobs similar to yours.

Assuming the Lowest Estimate Is the Scope

Contractors sometimes bid low knowing they will recover costs through change orders. Ask what is included and excluded in every estimate.

How to Hire a Contractor