Hiring a contractor is one of the biggest decisions you’ll make as a homeowner – and it’s one that roughly half of all homeowners don’t end up happy about. You’re going to be paying a substantial amount of money, communicating with this person on a regular basis, and they’ll be working in your home for a significant period of time.
The decision of who to hire must be taken very seriously. Hiring the wrong contractor can easily turn into a remodel nightmare – imagine living in a home that’s only half remodeled because you and the contractor are in a dispute. No one ever thinks it’s going to happen to them, but it absolutely can happen to anyone.
Here at GreatBuildz, a free service that connects homeowners in Los Angeles, Orange County, Ventura & San Diego with reliable remodeling companies, we use a thorough contractor screening process – here are some tips from our experience.
Meeting with three or more contractors and getting multiple estimates is a great place to start, but it should be just the beginning of the process. Like hiring a nanny or caregiver for your child, you should always take extra steps and precautions to ensure you can truly trust the contractor that just “feels right” based on your gut feeling. Your gut is a starting point, not a finish line.
Step 1: Verify the Contractor’s License on the CSLB Website
This is such an easy thing to do and only takes a few minutes. In California, you should navigate to the check license page. Here, you can confirm the renovation company you’re considering has an active license, check company owner names, see if they have any infractions on their license, and determine how long the company has been licensed. If everything checks out, you move on to the next step.
But if you find some issues or inconsistencies, you need to explore this with the renovation company. For example, if their license is only 6 months old or has some sort of infraction, that’s a clear sign that you should think twice before hiring this company. Presumably, the contractor ‘neglected’ to tell you about this and now you must reconsider whether this is a person you can truly trust.
Pay attention to another client’s has complaint to the CSLB, because the issue must be pretty serious. This process is much more time-consuming than just writing a bad review. If someone is willing to take the time to do this, there probably is a serious issue with the company. A reputable contractor would rarely let a dispute escalate to this level; they would have found a way to make the client satisfied before they filed a complaint.
Step 2: Check Online Reviews and Reputation
If you Google the company name, you may find reviews on sites such as Yelp, Houzz, etc. Be careful to ensure that the reviews you find are for the correct company, as there are many companies with the same or similar names across America, and you want to make sure you’re looking at the right reviews.
Some companies won’t have any online presence or reviews; many renovation companies don’t spend any time marketing online and that’s not a negative sign. For those that have reviews, make sure that good reviews greatly outnumber bad ones. A few bad reviews, especially old ones, shouldn’t necessarily be a deal-breaker when you look and hire a contractor.
Like the rest of us, contractors are only human and it’s unlikely they can please all of the people all of the time (some people are impossible to please). Read the negative reviews and determine how bad their behavior seems to you…and feel free to ask the contractor to explain their bad reviews. A significant number of bad reviews (especially in the last 2 years) clearly indicate a pattern and you should think twice about hiring this company.
Step 3: Get a Copy of Their Insurance Certificate
Ensure their insurance is up to date and verify that it includes Workers Compensation insurance (assuming the contractor has employees). If you want to be extra thorough, you can call the insurance broker listed on the certificate and ask how long they’ve been doing business with the renovation company and whether they have had any insurance claims. You don’t want to hire a contractor if they can’t provide a copy of their General Liability and Workers Comp insurance certificates.
If the insurance is slated to expire shortly, make sure you get an updated insurance policy before you start your job. You don’t want to be in the middle of a renovation and find your contractor has let their insurance lapse.
Step 4: Get at Least Three Written Estimates and Compare Bids
Most people think that collecting estimates is just about finding the lowest price – but that’s a mistake that can cost you big. You should be getting written estimates from at least three contractors so you can compare what’s actually included and what’s not. One estimate might come in lower, but if it’s missing line items that another estimate includes (like permit fees, finish materials, or demolition) that’s hardly a bargain.
When you review estimates, pay attention to how each contractor breaks down the costs. Are they providing a detailed scope of work, or just a single lump sum number? A vague estimate is often a sign of a contractor who either doesn’t want to be held accountable or hasn’t fully thought through your project. Also, be cautious of any bid that comes in dramatically lower than the others – that usually means the contractor is either cutting corners, planning to hit you with change orders later, or underestimating the scope.
If you need help understanding or comparing contractor bids, check out our guide on comparing estimates or try our free BidCompare AI tool.
Step 5: Call at Least Three References
It goes without saying that the contractor will give you the names of their happiest customers. For that reason and because of the time involved to make calls, many people will skip this step; but that would be a mistake. My experience is that even the happiest customers will provide some valuable information if asked the right questions.
Ask the references questions like, “Did the project come in on budget and on time?” and “I know you said he’s terrific, but if there was one thing you could improve about your experience, what would it be?”. You’ll likely find that most people will share some information that is useful and influence your decision on whether to hire a contractor or not.
Again, no renovation company is perfect and it’s best to know their shortcomings upfront, so you can set realistic expectations for yourself. The references could also give you valuable tips such as the best way to communicate with the contractor or the things to look out for with his crew, etc.
We’ve published the full script our team uses on these calls, including what to listen for in each answer: 15 questions to ask contractor references.
Step 6: Interview the Company Owner or Project Supervisor
Most of us assume that the person coming to our house to give us a cost estimate for our project is the owner of the construction company, but often this is not the case. Especially with larger renovation companies, the person at your house is just a salesperson, probably one of several on their staff. Even if the salesperson is extremely likable and knowledgeable, it will be difficult for you to gauge the company based on this person as they won’t be involved in your project; their job is solely to make the sale.
That’s why I suggest interviewing the owner of the company, or at the very least, the supervisor who will be your day-to-day contact during the project. Make sure that you feel comfortable speaking to this person and that you won’t feel intimidated communicating with them during the project. Ask them a few difficult questions and see how they respond. Ask them if they feel comfortable operating under the terms you desire.
For more on what to ask during that conversation, check out our full list of questions to ask a contractor before hiring.
Step 7: Understand the Payment Schedule and California Deposit Laws
This is an area where a lot of homeowners get burned, so pay close attention. In California, there’s actually a law that limits how much a contractor can ask for as a down payment: it’s capped at $1,000 or 10% of the contract price, whichever is less. If a contractor asks you for a larger deposit than that before any work has started, that’s a major red flag.
Beyond the initial deposit, you should agree on a payment schedule that’s tied to project milestones, not dates on a calendar. For example, a certain percentage when demolition is complete, another percentage when rough framing and inspections pass, and the final payment upon completion. Never pay the full amount before the work is done. You want to always have enough money held back to motivate the contractor to finish the job. A contractor who pushes for large payments upfront, or who wants cash only with no receipts, is telling you something – and you should listen.
Step 8: Review the Contract Before Signing
I know this sounds obvious, but you’d be shocked how many homeowners sign a contractor’s agreement without reading it carefully – or worse, proceed without a written contract at all. Everything you’ve discussed, every promise that’s been made, needs to be in writing. If it’s not in the contract, it doesn’t exist.
At a minimum, your contract should include:
- a detailed scope of work describing exactly what will be done (and what won’t)
- the total cost and payment schedule
- a projected timeline with start and completion dates
- information about who is responsible for obtaining permits
- a process for handling change orders (changes to the scope that affect the price or timeline)
- language about dispute resolution
Read every line. If something is confusing or seems off, ask questions before you sign. A good contractor will welcome your diligence – they want clear expectations too.
Red Flags to Watch for When Hiring a Contractor
Even if you follow every step above, it helps to know the warning signs that should make you walk away. In our experience working with thousands of homeowners, here are the most common red flags:
The contractor asks for a large deposit upfront – well beyond California’s legal limit. They show up to the estimate meeting without any references, portfolio, or proof of insurance. They pressure you to sign a contract immediately or offer a “today only” discount. They don’t want to pull permits or suggest you pull the permits yourself to “save money” (this shifts all liability to you). They can’t provide a written estimate or contract, everything is verbal. They’re impossible to reach during the estimate phase – if they’re hard to get ahold of now, imagine what it’ll be like in the middle of your remodel. They have a pattern of recent negative reviews online.
Trust your instincts, but back them up with facts. That’s the whole point of doing this homework.
Frequently Asked Questions About Hiring a Contractor
What is the best way to hire a contractor?
The best way to hire a contractor is to vet them thoroughly before signing anything. That means checking their license on the CSLB website, verifying their insurance, reading online reviews, getting at least three written estimates, calling references, and interviewing the person who will actually oversee your project. If you want to skip the legwork, GreatBuildz does all of this screening for you for free, and connects you with reliable, pre-screened contractors in Southern California.
What not to say to a general contractor?
Avoid telling a contractor your maximum budget upfront – that number has a way of becoming the price of the job. Don’t badmouth other contractors you’ve met with, as it sets a negative tone. And never issue ultimatums like “take it or leave it” when negotiating. A good working relationship with your contractor is built on mutual respect, and you want open communication from day one.
What is the average cost for a general contractor in California?
General contractors in California typically charge a markup of 15% to 25% on top of the total project costs (materials, labor, subcontractors, permits, etc.). So if the hard costs of your kitchen remodel are $80,000, expect to pay between $92,000 and $100,000 with the GC’s fee included. The exact percentage varies depending on the project size, complexity, and the contractor’s experience level. For more detailed pricing, check out our California remodeling cost guides.
GreatBuildz is a free service that connects you with reliable contractors so you don’t have to go searching for one. With our thorough screening process, we will make sure that your project is in the best hands. Call us at 888.668.2454 or submit your project here.
Related Articles:
10 Things to Check When Hiring a Contractor
58 Vital Questions to Ask a Contractor Before Hiring
5 Things to Do Before Getting Remodeling Estimates
How to Find the Right General Contractors for Any Project
Topics to Discuss with a Contractor During an Interview
