How to check a contractor before you hire

Hiring someone to work on your home is one of the few purchases where you pay a stranger a large sum, let them into your house, and only find out afterwards whether the work was done right. Most contractors are honest and competent. The checks below take an hour or two, and they are how you find those contractors and avoid the rest.

1. Start with the basics: is the business real and reachable?

Before you look at anything else, confirm that the business exists outside of the ad, flyer or text message that brought it to you.

• Look up the business name, phone number and website. A real contractor usually has a consistent name, a working phone number and a physical service area. Search the business on CheckThisBiz to see its public listing, whether its website loads, and how long its domain has been registered.
• Call the number yourself. Use the number from an independent listing, not only the one on the door hanger. You want to reach the same business either way.
• Ask for a physical business address. A contractor with no address, only a mobile number and a first name, is harder to hold to a contract or find later if something goes wrong.

2. Check the license with the state, not the contractor

Many states and some cities and counties license contractors, especially for electrical, plumbing, HVAC and general building work. Requirements vary a lot: some states license nearly every trade, others license only a few, and some leave it to local governments.

• Ask for the license number and the exact name it is issued under.
• Look it up yourself on the state or local licensing board's website. Search for your state's name plus "contractor license lookup", and make sure you land on an official government site (usually ending in .gov).
• Check that the license is active, that it covers the type of work you need, and that the name matches the business you are hiring.
• Note any disciplinary actions or complaints the board lists. One old complaint that was resolved is different from a pattern.

If your area does not license a trade, ask the building or permitting office what applies. The answer is useful either way.

3. Ask for proof of insurance, then verify it

Insurance protects you if a worker is injured on your property or the contractor damages something. Ask for two things:

• General liability insurance, which covers damage to your property and injuries to others.
• Workers' compensation insurance if the contractor has employees. Rules on who must carry it differ by state.

Ask for a certificate of insurance sent directly from the insurance agent, not a photo of one. Call the agent or insurer on a number you look up yourself and confirm that the policy is active and covers the dates of your job.

4. Get more than one written estimate

Asking two or three contractors to bid on the same job tells you what the work should cost and how each one thinks about it. A detailed estimate lists materials, labor, the scope of work and what is excluded. Be careful with a bid far below the others: it may leave out work you will be asked to pay for later.

5. Talk to references and look at finished work

• Ask for two or three recent customers with jobs similar to yours, and call them.
• Good questions: Did the work start and finish when promised? Did the price change, and why? Would you hire them again?
• Read online reviews across more than one site, and look for patterns rather than single comments. A long history of steady, specific reviews says more than a burst of short five-star ones.

6. Put everything in a written contract

A written contract protects both sides. Before you sign, make sure it includes:

• The contractor's full business name, address, phone and license number
• A detailed description of the work and the materials, including brands or grades where it matters
• The total price and a payment schedule tied to completed stages of work
• Start and completion dates, and what happens if they slip
• Who pulls the permits and schedules inspections
• How changes to the job are approved and priced (in writing)
• Warranty terms for labor and materials
• Cleanup and debris removal

7. Keep payments in step with the work

A deposit is normal for many jobs, since contractors often buy materials up front. Some states limit how large a deposit a home-improvement contractor may ask for, so check your state's consumer protection office. After the deposit, pay as stages of the work are completed and inspected, not in advance.

• Pay by check or card so there is a record. Be very wary of anyone who asks for cash only, a wire transfer, gift cards, cryptocurrency or a payment app transfer to a personal account.
• Hold the final payment until the work is finished, inspected where required, and you are satisfied.
• On larger jobs, ask about lien waivers. In many states, subcontractors or suppliers who are not paid by your contractor can place a lien on your property. A lien waiver is a signed statement that they have been paid.

8. Make sure permits are pulled

Many kinds of work, such as structural changes, electrical, plumbing, roofing and additions, need a permit from your city or county. The permit process brings an inspector to check the work. A contractor who suggests skipping the permit to save time or money is shifting risk onto you: unpermitted work can cause problems with insurance claims and when you sell.

If something goes wrong

Keep copies of the contract, estimates, receipts, messages and photos of the work. If you cannot resolve a dispute directly, you can file a complaint with the licensing board that issued the contractor's license and with your state attorney general's consumer protection office. If you think you were the victim of a scam, you can also report it to the Federal Trade Commission at ReportFraud.ftc.gov.

The short version

Confirm the business is real, check the license and insurance with the people who issue them, get it in writing, and never let your payments run ahead of the work. To see how CheckThisBiz checks a listing, website and domain, read its methodology, or look up a contractor now.