How to Choose a Contractor: 10 Questions to Ask Before Hiring#

Hiring the wrong contractor is one of the most expensive mistakes a homeowner can make. Bad work leads to rework, disputes lead to legal fees, and unlicensed operators leave you holding the bag when things go wrong.

We see it in our data constantly. Across over 148,000 home service contractors in our directory, the spread between the best and worst is enormous — in pricing, in quality, and in reliability. The good news: asking the right questions before you hire eliminates most of the risk.

Here are the 10 questions that separate a solid contractor from a costly mistake.

1. Are you licensed in this state and jurisdiction?#

Every state requires some form of contractor licensing, but the requirements vary widely. In California, any project over $500 requires a licensed contractor. In Texas, there is no statewide general contractor license, but plumbing, electrical, and HVAC work all require trade-specific licenses.

What to do: Ask for the license number and verify it on your state's licensing board website. Check that the license is active, that it covers the type of work you need, and that there are no disciplinary actions on file.

2. Do you carry general liability insurance and workers' compensation?#

General liability insurance protects you if the contractor damages your property. Workers' compensation covers injuries to the contractor's employees on your job site. Without workers' comp, you could be liable if a worker gets hurt at your home.

What to do: Ask for a Certificate of Insurance (COI) and verify it directly with the insurance company. Policies should show at least $1 million in general liability coverage. Do not accept expired certificates.

3. Can you provide three references from recent projects?#

References from the last 6-12 months are the most relevant. Older references may reflect a different crew, different business practices, or a different financial situation.

What to do: Actually call the references. Ask about timeline adherence, communication, change order handling, and whether they would hire the contractor again. Visit a completed project if possible.

4. Will you provide a detailed written estimate?#

A professional estimate should itemize labor, materials, permits, and any allowances or contingencies. Vague estimates like "around $15,000" are red flags.

What to do: Get estimates from at least three contractors. Compare line by line, not just the bottom line. The cheapest estimate is not always the best value — it may be missing scope items that will show up as change orders later. Our data shows a 35% average spread between the lowest and highest estimates for the same project scope.

5. How do you handle change orders?#

Changes during a project are inevitable. The question is how they are documented and priced. Professional contractors use written change orders that describe the work, the cost impact, and the timeline impact — signed by both parties before the work begins.

What to do: Ask to see a sample change order form. Confirm that no additional work will be performed without a signed change order. This is the number one source of contractor disputes.

6. What is your payment schedule?#

Standard payment schedules tie payments to milestones: a deposit at signing (10-30%), progress payments at defined stages, and a final payment upon completion. Contractors who demand 50% or more upfront are a risk. Contractors who ask for full payment before starting work should be avoided entirely.

What to do: Never pay more than 30% upfront. Hold at least 10% until the job is fully complete, inspected, and any punch list items are resolved. Pay by check or credit card (not cash) to maintain a paper trail.

7. Who will be on-site managing the work daily?#

Many contractors run multiple jobs simultaneously. The person you meet during the estimate may not be the person managing your project day to day.

What to do: Ask who the on-site lead or foreman will be. Get their direct contact information. Clarify how often the company owner or project manager will visit the site.

8. Will you pull the required permits?#

Permits exist to ensure that work meets building codes and is inspected by the local authority. Skipping permits to save time or money creates serious problems: code violations, insurance claim denials, and complications when you sell the home.

What to do: Ask the contractor to identify every permit required for the project and to pull them. The permits should be in the homeowner's name or the contractor's name — never skipped. Check with your local building department if you are unsure what is required.

9. What is the expected timeline, start to finish?#

A professional contractor should provide a project schedule with start and end dates, key milestones, and an explanation of what could cause delays (weather, material lead times, inspections).

What to do: Get the timeline in writing as part of the contract. Include a provision for how delays are handled and whether there are any penalties for significant overruns.

10. What warranty do you offer on your work?#

Workmanship warranties typically cover 1-5 years. Material warranties come from the manufacturer and may cover 10-25 years. Both should be documented in writing.

What to do: Get the warranty terms in the contract. Understand what is covered, what voids the warranty, and how to file a claim. Ask whether the contractor will still be in business in 3-5 years — check their BBB profile, years in business, and financial stability.

Red Flags That Should Stop You#

• No written contract. Walk away.
• Cash-only payments. Almost always means unlicensed or uninsured.
• Door-to-door solicitation. Legitimate contractors have enough business through referrals and marketing. Storm chasers who knock on your door after a weather event are the highest-risk category.
• Pressure to decide immediately. "This price is only good today" is a sales tactic, not a business practice.
• No physical address. A PO Box or no address at all makes it nearly impossible to pursue a claim.
• Unusually low bid. If one estimate is 40%+ below the others, the contractor is either cutting corners, missing scope, or planning to make it up in change orders.

How to Use Our Directory#

Our home services directory includes transparency scores for contractors based on licensing verification, insurance status, review history, and pricing data. Each listing shows:

• License status and number (verified against state databases)
• Years in business
• Service area
• Customer ratings and review count
• Price range indicators

Find contractors near you to compare options and make an informed hiring decision.

FAQ#

How many estimates should I get?#

Three is the standard recommendation. Fewer than three does not give you enough data to spot outliers. More than five leads to decision paralysis without significantly more information. Make sure all estimators are bidding on the same scope of work.

Should I hire the cheapest contractor?#

Not necessarily. The cheapest bid may indicate cut corners, missing scope items, or a contractor desperate for work due to cash flow problems. Compare the value: look at scope completeness, material quality, warranty terms, and the contractor's track record alongside the price.

What should a contractor contract include?#

At minimum: full scope of work, itemized pricing, payment schedule, start and end dates, change order process, warranty terms, permit responsibilities, insurance requirements, dispute resolution mechanism, and cancellation policy. Both parties should sign and each should receive a copy.

What do I do if a contractor does bad work?#

Start with a written complaint to the contractor, referencing specific contract terms. If that fails, file a complaint with your state licensing board (which can suspend their license), the Better Business Bureau, and your local consumer protection office. If the amount justifies it, pursue the contractor's bond or file in small claims court (typically for disputes under $5,000-$10,000 depending on the state).