Fires, floods and catastrophic storms call for preparation. But even with precautions in place, damage or the destruction of your home always catches you unawares. Unlike a typical remodeling project, eagerly planned with exciting changes, a post-disaster rebuild is an unwelcome ordeal. Suddenly, you’re meeting with insurance agents and adjusters, arranging temporary housing and making countless decisions, all while coming to terms with the loss of your home.
Eager contractors enter the picture early and play a major role in the outcome of the project. You must therefore select the right one for the job. (Easier said than done during this emotional and stressful time.) The 22 tips below (sorted into 4 categories) will help, especially if you've never hired a contractor before.
Be Alert to Scams
“The stress after a disaster can make you very anxious to get your life back to normal as quickly as possible. Don't take actions too quickly. You may regret them later.” This advice from Iowa State University Extension and Outreach in Hiring Contractors after a Disaster highlights the need for caution when choosing a contractor: Rushing into a rebuild can make you vulnerable to shady business practices and outright scams.
Signs you shouldn’t ignore:
- Be skeptical of door-to-door contractors who show up without an appointment, offering a limited time-only cut-rate deal on the work you need. High-pressure sales and scare tactics can force you into quick decisions before you’ve considered your options.
- Flattering words and other forms of “emotional grooming” distract from the real issue. Unscrupulous contractors may try to create a false sense of connection or camaraderie with you to make it more difficult to turn them down (e.g., “Saw your Golden Lab in the yard. My wife and I have rescued Labs for 15 years!”).
- A contractor doesn’t need your credit card or bank information. Unless you’ve signed a contract and are paying a portion of the bill, keep all financial information to yourself.
- The Coalition Against Insurance Fraud advises, "Don't pay a contractor in full before work begins, or before it's finished. The contractor could disappear with your money, leaving your repair job unfinished. Normally you should only pay about 20 percent or less upfront."
How to fight back:
Carefully vetting contractors is the best way to avoid a scam, but if you think you’ve been had, you have options.
- Contact your credit card company if you realize you’ve given out your card number to a shady contractor. Ask them to close the account and issue a new card.
- Report problem contractors to the Better Business Bureau (BBB) or the consumer division of your state Attorney General’s office.
- Check Houselogic.com’s list on taking action against common contractor scams.
Your Contractor, Your Choice
It can be tempting to rush when you’re anxious to rebuild. Before you act, however, stop and reflect on your priorities for the project. “Taking your time at the start of a project increases the odds you will be satisfied with the work when it’s completed,” advises AARP’s Dealing with Disaster guide. The extra time you spend evaluating each contractor and bid helps you make an informed choice.
Do your homework:
- Ask trusted family members, friends and neighbors for referrals. Realtors and online home-services directories such as Angieslist.com and Porch.com are good referral sources too.
- Get the names of at least three contractors and check their BBB listings. Have complaints been filed against the company? How were those complaints resolved?
- Meet with the contractors in person, and look for signs of professionalism. Are they members of the local and national Home Builders Association? They should be. Professionalism could also include business cards and/or letterhead with a physical address, a vehicle with a company logo or other business identification or a professional, long-standing website.
- Ask for proof of proper licensing and insurance, including liability and workers’ compensation insurance. Find your state’s contractor licensing requirements at HomeAdvisor.com.
- Request references and contact several to ask about the work performed. Ask past customers if they'd use the same contractor again. Consider visiting the site of an ongoing job - you'll see the contractor and crew in action and the work environment they keep.
- Pay attention to the contractor’s communication style and demeanor. Daniel Diclerico cautions in Consumer Reports, “trust and a good rapport…are essential…Any negative feelings you have during the initial interview (Too bossy? Condescending? Rushed?) will only intensify as the project heats up.”
- Get at least three written estimates and evaluate them closely for detail and organization. “Look for a bid that thoroughly outlines every aspect of the job, from the cost of the porta-potty for the crew to the fee for the town building permits—and of course the contractor’s price for each and every element of the project, with a bit of detail about the options that he’s priced,” says Josh Garskof in Money magazine.
- Keep notes about each contractor and bid as you make your choice. A checklist like this one from Iowa State University Extension and Outreach helps.
Get it in Writing: Contracts, Permits and Change Orders
According to AARP’s Dealing with Disaster guide, “a well-written and detailed contract is very important. Make sure that everything you agreed to is in writing. Don’t be rushed into signing too quickly. Take your time to make a decision and get a second opinion before you sign. Any genuine good deal will still be there tomorrow.”
Be smart about contracts and documentation:
- A contract protects you and your contractor. In any contract look for a detailed breakdown of labor and materials, start and end dates, a payment schedule, “exclusions” noting any work you will do yourself, “allowances” for materials the contractor may purchase and a penalty fee for going over the work deadline.
- Weigh the pros and cons of fixed-price and cost-plus contracts.
- Contractors are responsible for obtaining permits for the work they will do. Don’t be tempted to help out by pulling permits for them – this makes you the party responsible for the work, not the contractor.
- Be aware that building codes may have changed since your old home was built, and there may be requirements for new construction that apply to your project.
- Try to set boundaries with yourself about the project: It’s easy to tack on more work “while we’re at it,” which can ratchet up costs. Your contractor must keep track of any additions or changes to the contract with a change order.
- Some changes to the contract are inevitable, so keep careful records. A survivor of the 2007 Angora wildfire in California says, “for all change orders, we had a right to see the sub-contractors' and material suppliers' invoices. We got copies with each bill for each change order. Each change order was made in writing from us to the contractor and was as specific as possible. Each invoice for each change order was evaluated by us.”
- Don’t sign off on a work completion certificate until all the work has been completed satisfactorily. Never make your last payment on the work until everything is finished.
Rebuilding your home after a disaster is a daunting task. You can improve your odds for a positive experience by taking time to set priorities, evaluating your choices, carefully vetting contractors and reviewing contract details.
Need help navigating a rebuild? Give us a call anytime.