There’s no in between with contractors: you’re either eagerly inviting them to your 40th birthday party or you’re angrily filing a lawsuit against them. Ideally, you’re in the former category.

Picking a contractor for your home remodel may just be the most important decision of your life, and there are a few reasons why.

A contractor is someone you’re giving a huge chunk of money to and saying, “tear my house apart and rebuild it.” You shouldn’t trust just anyone with a job like that.

Not to mention, this person will be in your house almost every day, for over a month - more time than you’d probably allow your mother-in-law to stay under your roof. And it’s not like you can just pop in your headphones and ignore them - chances are, you’ll want some status updates as they remove all of your appliances and rewire your electricity.

You know how a bad boss can make or break a new job? Your contractor is the same way. Even if they’re a seasoned pro, if you don’t feel comfortable around them, it can make the project a real pain.

Whether you’re shopping around for a contractor, mid-way through a nightmare project, or seeking reparations from a contractor that took your money and ran - this article will give you tips and tricks on how to make sure your remodel doesn’t turn into a renovation horror story told at dinner parties.

We talked to Jenna Cunningham, a Maryland real estate agent and seasoned home flipper, to get her advice on how to deal with a bad contractor. After Jenna’s home burned down in 2018 her insurance company gave her a recommendation for an established contractor in Baltimore, Maryland. The contractor ended up ditching her and filing for bankruptcy after she had already paid $72,000.

She shared all of her tips and tricks with us, so you don’t end up in the same situation.

Specifically, we’ll talk about:

How to Find a Good Contractor

If you haven’t fully settled on a contractor, start here. There are a few signs that will give you a clue on if the person you’re considering is up to snuff.

1. Do not automatically pick the cheapest quote

There’s a reason that the cheapest quote is the cheapest, and it’s not that you somehow found a secret bargain! With contractors, you get what you pay for. The cheapest contractor may be a mirage - ie., their quote is missing things that a more expensive one is including, so it’s not necessarily cheaper. Make sure you aren’t comparing apples to oranges. But, if everything is accounted for and one quote is coming in way lower than the rest, that’s probably a red flag.

2. Think long and hard about what you want before hiring a contractor

Have your home design plan (whether it’s drawn up by you or a designer) ready before hiring a contractor. Each contractor is unique and has different specialties, so the more specific you are, the easier it will be to find a contractor with the exact experience and expertise you’re looking for. If you hire someone without fully working out all of your project details, they may not be able to complete exactly what you’re looking for.

3. Look up their legal history before hiring

You can do all the Googling you want, but at the very least, make sure your contractor isn’t in the middle of a legal battle before hiring them. You often won’t be able to see this unless you search their business in your state’s case records. This is one thing Jenna really wishes she did. After her contractor filed for bankruptcy before starting the job, she saw that they were already being sued by roughly three other homeowners for the same issue.

4. Get at least three references, at least one from someone you know

Everyone will tell you to get references before hiring a contractor, but it’s important to get references from people you know and trust. Any contractor can give you names to call that will tell you they did a good job. References are much more valuable coming from your friends, family and coworkers who’ve actually worked with them. Jenna’s insurance company recommended her contractor and provided three references, none of whom were people she knew. While the references were good, she found out later the company couldn’t be trusted.

5. Don’t trust online reviews

Sometimes companies can get friends and family members to leave fake five star reviews about them online. This happened to Jenna and she only realized this afterwards after looking up reviewers’ names on Facebook, and seeing they were connected with the business owners. Do not research companies solely using online reviews, as you never know who is actually writing them.

How to Prevent Issues with Your Contractor

If you’ve already hired your contractor but they haven’t yet started the job, here’s some advice to make sure your relationship is set up for success.

1. Discuss timeline and billing expectations up front

The biggest disagreements that Jenna sees with her clients are fights about differing expectations surrounding timelines. A homeowner thinks it will be done a lot earlier than the contractor does, and problems ensue. Jenna suggests that homeowners “be upfront. Everyone wants to meet expectations. But if your contractor doesn’t know yours, they can’t.”

2. Be nice to your contractors

Jenna reminds her clients that it’s hard to find good contractors, and once you find one, you’ll probably want to use them again. That’s why it’s important to maintain a great working relationship. You won’t want to have to begin the long contractor search again if you don’t have to.

3. Pay their bills on time

If a contractor’s rate is standard, then they deserve it, says Jenna. Construction is hard work and respect is a two way street. If you don’t scoff at your contractor’s rates, and you pay their bills on time, then they’re more likely to respect your needs and wishes as well. Contractors are often swimming in potential work, and if you don’t treat them well, they have other clients who’d be happy to take them on. Make sure they want to work with you, too.

4. Make sure ALL of your wants and needs are in the contract

Lastly, any portion of your renovation project that you’re expecting needs to be in the contract. From the labor, to the work being done, to appliance installation, to electrical work, it’s better to be overly detailed than to not get what you want. If you haven’t discussed a specific vision in your contract or in person with your contractor, don’t assume it will happen.

5. Make sure your contractor is insured and bonded

If your contractor isn’t insured, there’s nothing you can do if things get ugly. The state you live in can’t protect you, and you don’t have as many options to take action against them. If they are insured - even if their business goes up in flames, and they therefore aren’t able to complete the project, you’ll have options. If your contractor is bonded, it means if they abandon the project, your lender will help cover any money they took from you.

6. Do not pay your contractor more than 10% of the total cost before they start the project

Why? If they walk away from the job before starting and take the money you gave them already, your state’s guaranty/recovery fund will pay up to a certain amount back if your contractor was licensed with the state.

How to Deal with a Bad Contractor

There are a variety of problems you can encounter with a bad contractor. Here’s some advice for the most common ones if the job is underway:

• Your contractor is taking too long to finish a job

Unfortunately, contractors are busy people. They often are juggling 2-3 projects at once, and also have a lot of responsibilities on their plate with a single project. But there’s a difference between slowly making progress and a complete standstill.

One homeowner recommends talking it out and if necessary, offering to help. If they’re working with a small crew, the timing may just have to do with lack of manpower, and when you’re desperate enough, offering to make a trip to Home Depot can make a big difference.

“I volunteered to go to Lowes to pick things up. I offered to help, just to speed up the process in any way that I could. Like, tell me what you need,” said Elizabeth, a Maryland homeowner.

Overall for this one, we’d say: check in as much as possible. There’s not much you can do to speed up the process unless you start doing the work yourself, and we don’t recommend that. However, you can ask for periodic updates and changes to the schedule as much as possible - that way, you’ll be prepared if you have to make alternate living arrangements.

• They don’t communicate well

This is a common issue that homeowners run into with contractors, and it can be really frustrating. While contractors are great at tiling, some aren’t so great at talking about the tiling.

We recommend that you over-communicate. Don’t assume that they’re going to come at the same time everyday, or that they’re going to report their progress to you. If you’re having your mother over on Saturday and don’t want construction during that time, even if they’ve never come on a Saturday before, tell them anyway. You’ll save a lot of hassle in the long run if you’re as open as possible about your expectations, wants and needs, and weekly schedule. Consider them as another member of the family in terms of scheduling - you know your son’s soccer practice schedule, and for the duration of your construction project, it’s just as important to know your contractor’s.

Also, you may need to adapt to their communication style. Contractors don’t spend a lot of time sitting around. While you might prefer to chat with them when you get home from work, they might need to get over to their next project at the same time. If you use your commute to follow up with them via text but they never respond, see if a phone call at a specific time of day is easier.

Overall, you should assume that you’ll have to initiate all conversations, on their terms, and go from there. This may involve shifting priorities with family or work to make communication happen.

• They’re inappropriate

While this problem isn’t as common, it can make for a pretty terrible working relationship. Maybe your contractor won’t stop cursing around your kids, spouting offensive political views, or inviting you out for a drink after they finish your insulation.

Whatever it is, treat the person like you would a well-intentioned family member, and set a boundary. It’s important to do so early on if you notice something you don’t like, as it will only get worse and harder to bring up as time goes on.

“They assigned this specific guy who had the hots for me,” one homeowner told us about her contractor. “I tried to be nice, but it was difficult.” She ended up spending a lot of time in her room while he was there, trying to avoid unwanted conversations.

We’d recommend that you bring it up with the contractor’s boss if it’s a subcontractor and a conversation doesn’t work. It’s not rude to ask for common courtesy from someone you hired in your own home.

• What to do when a contractor does poor work

Talking to your contractor about quality of workmanship is one of the hardest things to bring up. Whether the project doesn’t look like what you pictured, it caused something else to break, or you’re noticing sloppy work, it can be awkward to talk about.

We’d recommend starting off with some questions, rather than accusations. In many cases, you may just not understand the renovation process, and asking your contractor about what they’re doing can help you gain some clarity.

For example, if it looks like your window is a few inches further to the left than you discussed previously - ask them about it! It’s possible that it just looks different than how you pictured in the rendering, and they’d be more than happy to fix it.

It’s easiest to ask questions like this while they’re at your house, so try to plan to be home while your contractor is there working to get a conversation started.

How to Fire Your Contractor

Sometimes, if a situation is bad enough, it may be worth it to fire your contractor and look for a new one. As a precursor, we’d recommend that you speak to an attorney, as we can’t offer any legal advice.

However, here are some questions you can ask yourself before taking action (if you choose to do so):

• What are your state laws regarding contractors rights?

Every state has requirements in regards to your contractor’s rights when it comes to firing, and similarly, every state has a different suggested recourse if you’d like to fire your contractor. Check out the Better Business Bureau (BBB) in your area.

• Has your contractor truly violated his/her contract?

Unfortunately, you need a good reason to fire your contractor, and one example of a good reason means that they’ve violated your contract in some way. Before deciding to fire your contractor, read through your original contract in its entirety and highlight anything you believe your contractor hasn’t followed through on.

• Did you give your contractor a chance to correct his/her errors?

It’s a good idea to try to work out any issues you have with your contractor before firing them. Consider giving your contractor a chance to correct their mistakes or solve any issues before resorting to a more drastic measure.

• Do you have any documentation of your contractor’s errors?

If you’re firing your contractor for violating their contract, you need some proof that they actually did violate the contract. Even if you don’t have photos, texts or email receipts, it’s best to keep a journal documenting what’s happening with your contractor, at the very least to keep things straight in your own head.

Also, make sure if you do decide to take this step, that you fire your contractor formally, in writing, and let your bank know (if you’ve taken out a loan) in writing as well.

But again, these are only things to keep in your mind if you’re going through this process. We recommend you seek real counsel with questions you have about your situation.

Seeking Resources After a Contractor Ripped You Off

In Jenna’s situation, her contractor filed for bankruptcy after she paid a third of the total cost - which was $72,000. She has some advice for homeowners in similar situations.

• Check out your state’s home improvement commission

Jenna found the Maryland Home Improvement Commission (MHIC). If you’ve hired a licensed contractor, you can file a complaint with the commission and request arbitration, rather than hiring a private attorney, which can cost hundreds per hour.

• Check for a mediation clause in your contract

Jenna notes that if you have a mediation clause in your contract, you will have to see if you can first solve your issue through mediation before filing a complaint with your state’s commission. This can be difficult if your contractor is nowhere to be found.

• Check out your state’s guaranty/recovery fund

Every state has a fund set up to help homeowners using licensed contractors who have been ripped off. This fund is offered through the state’s home improvement commission. Each state has a different maximum amount of money you can recoup. While Jenna was out $72,000, it was still worth it to recoup the maximum amount of $20,000 (in Maryland) from the fund.

• Write a negative review

Unfortunately, Jenna never got money back from her contractor, and that’s sadly the case for many homeowners in these situations. Luckily for her, she was able to write negative reviews about this company, and even talk to lawmakers about improving rights for homeowners, citing her own story as an example. If you’re frustrated, tell your story on Angie’s List, Google Reviews, or another site. Just make sure anything you write is truthful information.

Lastly, with any of these issues, we recommend chatting with a professional about your own personal situation, as we can’t offer any legal advice.

How RenoFi Helps You Avoid Bad Contractors

One thing we can offer is RenoFi’s Contractor Due Diligence process. All homeowners preparing to apply for a RenoFi Loan are required to submit their contractor’s information and documentation. RenoFi’s experts will make sure to thoroughly vet your contractor and make sure they are up to par, taking some of the burden off of you as the homeowner. We’ll make sure they are licensed, call up their references, and even take a look at their experience and history.

According to RenoFi’s experts, here are the top three reasons why contractors don’t make the cut:

• Limited experience for scope of work presented

We often see very seasoned contractors, but sometimes those contractors are experienced in limited capacities. They may have been an electrician for a long time but that doesn’t mean they can renovate a kitchen from start to finish.

• Missing credentials/licensing

Sometimes we see contractors who are not licensed or not fully insured. This is typically an easy fix but it is a red flag if the contractor needs to scramble to update their insurance or license.

• No recent and applicable references

We like to see references that are recent renovations and had a project completed that was commensurate to the scope of work we are reviewing. If a contractor can’t provide a reference from the last two years of a project similar to the one they plan to undertake, that’s not a good sign.

Want to learn more? Contact RenoFi today.

Find a Lender