Americans have already spent a sizable amount of money on home renovations this year. Hiring the wrong contractor can have serious consequences, so it’s important to do your research to make sure you hire a company that’s competent and trustworthy, particularly if they will be in your home.

By Mechele Mills

Americans invest heavily in home renovations. In the first quarter of 2024, Americans spent $463 billion on home renovations. With that much money going around, some of it will fall into the wrong hands. Whether you’re planning on improving your home’s curb appeal or adding on an entirely new room, BBB advises homeowners to research remodeling companies before you get started.

BBB recommends homeowners consider 10 common mistakes made when hiring a contractor:

1. Not doing research. Hiring a contractor can be complex. It is important to check their experience, credentials, references, required licenses and performance. Remain organized and informed to be successful. BBB Business Profiles organize contractor reviews, ratings, complaints, photos and videos. They also list how many years the business has been in operation. Use the BBB Business Directory to view the profiles of local contractors in your area.

2. Not checking licenses, insurance, or permits. You don’t want to be held liable for an accident on the job site or have your project get shut down for not having the required permits.  General contractors are required to maintain certain licenses, permits and certifications in different states. Anyone you work with should be up to date on their insurance and certifications and secure any necessary work permits.

As a side note, BBB Accredited Businesses must be licensed, bonded, and insured in all instances where it is required. This competency licensing must be current and is necessary to maintain BBB Accreditation. Look for the BBB Seal to pinpoint those businesses that prioritize trust.

3. Not hiring a designer or architect. Although you have a vision for your home renovation, and your contractor has the know-how to tackle the work, keep in mind, a designer or architect’s expertise could be critical. Projects involving entire room remodels, reimagined floor plans, elevations, and additions require professional insight. These professionals provide valuable information regarding the project’s aesthetic, functionality, and structural integrity. Check out trustworthy designers and architects near you on BBB.org.

4. Not hiring a professional. Some home improvement projects could be tackled by you or by someone you know. However, hiring an experienced, licensed, and insured general contractor offers you better protection if anything goes wrong.

5. Not gathering multiple bids. Aim to get at least three quotes in writing and compare them based on the prices and what’s included in the service. Also, ask for comprehensive written estimates outlining the scope of work, costs, and potential additional charges. Make sure you understand everything that is included in the service before making a final hiring decision. Use BBB’s Get a Quote tool to get started.

6. Not having a signed contract. Never permit work to start without a signed, written contract which includes start and completion dates, exact costs, specific work to be done, the means that will be used to protect your property, and what cleanup and debris removal will be done. Read the fine print carefully. 

7. Not paying responsibly. Never make the full payment or large deposit upfront. Stagger your payments according to work stages, making the final payment when the work is completed to your satisfaction. Pay with a check or credit card. Not cash.

8. Not considering more than the price tag. Choosing the lowest bid could result in poor craftsmanship, cheap materials and ultimately, a bad end result. Consider all angles – especially regarding things like reputation, experience and communication – when making big decisions.

9. Not communicating well. Pay attention to the communication habits of your candidates during the interview process and be upfront about your communication needs as you explore what it will be like working with them. Responsiveness is one of the main ingredients in a trustworthy relationship; that’s why it’s included in BBB’s Standards for Trust.

10. Not having an emergency budget. Your project scope is always susceptible to things that are just out of your control. Get peace of mind by creating an emergency fund for these unforeseen circumstances.

Related article: BBB Tip: Create a budget and stick to it!

Learn more about hiring a reliable and trustworthy contractor. Check out more home improvement tips on BBB.org/HomeHQ.

Mechele Agbayani Mills is President and CEO of BBB Serving Central East Texas.