If you plan to build using an uncommon material or building system (e.g. timber frame construction, SIP panels, straw bales, ICFs) or want a highly energy efficient house (e.g. built to Passive House standards or using double stud walls), you’ll want a contractor who has experience building with those materials / systems.
FINDING PROSPECTIVE CONTRACTORS
Talk to friends, neighbors and co-workers who’ve done home construction projects. If you can, take a look at the work done and ask about their experience. You might try asking for recommendations from the local building inspector, who'll know which contractors routinely meet code requirements, or pay a visit to your local lumberyard, which sees contractors regularly and knows which ones buy quality materials and pay their bills on time. If you’re doing a remodeling project, check with the National Association of the Remodeling Industry for a list of members in your area (nari.org). To find builders in your area that are members of the National Association of Home Builders, visit nahb.org.
DO YOUR RESEARCH
Once you’ve got names of potential builders, it’s time to research them. Look at the Better Business Bureau website for information regarding complaints. Keep in mind that a complaint is not necessarily proof of a bad act on the part of the contractor, but a slew of complaints can signal potential difficulties with the contractor’s services.
Check out a contractor’s reputation on online rating sites you trust. Do people seem to have similar experiences, good or bad?
TALK TO THE CONTRACTOR
Now that you’ve done the initial vetting of prospective contractors, it’s time to contact those who’ve made the cut. Give each prospective contractor a call. Ask him questions. (I have compiled a list of “Questions to Ask a Prospective Builders”, which I give out to clients.)
Ask for references from former customers of the builder, and randomly call several of those references, (although you should keep in mind that the contractor is likely to “cherry pick” past customers and is unlikely to use an unsatisfied customer as a reference). My resource “Questions to Ask Builders’ References” provides a helpful list.
Ask the contractor for a list of subcontractors normally used during projects. Contact the subcontractors and ask them about their experiences in working with the general contractor. Ask if they were paid promptly. Ask them for any safety or ethical concerns and whether they're comfortable working with the contractor.
Ask the contractor for credit references from suppliers and call them to find out whether the contractor pays his bills on time.
MEET THE CONTRACTOR
Assuming that everything has checked out well, meet with the prospective contractor face to face. Is he easy to communicate with? Does he inspire trust? Is this someone that you’d like to work with over many months?
Visit a current job site and see for yourself how the contractor works. Is the job site neat and safe? Are workers courteous and careful with the homeowner's property?
Visit completed projects that the contractor has built. Is the quality of construction good?
BID OR TO NEGOTIATE?
At this point there is one of two ways that you can go. You can request bids from more than one contractor, or you can choose your favorite and ask that one for a proposal. There are pros and cons to each method.
IF YOU CHOOSE TO BID THE PROJECT
If you choose to bid out the project, now is the time to ask for bids. It may be tempting to get lots and lots of bids, but it’s preferable to choose only three. This will give you a fair sample to choose from without wasting the time of many contractors who have a small chance of seeing any payback for the many hours that it takes to put together a bid. It will also be easier for you to make a decision if you don't have a multitude of bidders to choose from.
Give each prospective contractor a set(s) of drawings. Ideally your prospective contractors will be bidding from a complete set of architectural plans and specifications that call out every detail of the project. Otherwise each contractor will make his own assumptions about what you want, and the bids will be apples-to-oranges comparisons.
Each bid should include a detailed breakdown of the cost of materials, labor, and overhead and profit. With luck, each contractor will have broken down his bid in a similar way to make it easy to compare, but it’s more likely that you will have to do some deciphering and ask some questions to figure out what is and isn’t included, and the cost of each item. I have put together a spread sheet that I can use to help clients compare bids from different contractors.
ALLOWANCES: If you have an abbreviated set of architectural plans or have not yet chosen all of the materials and products for your project, any items that haven’t been nailed down will typically be handled with an allowance, a dollar amount meant to cover, for example, the cost of your cabinets. Be aware that allowances are often too low, which can result in an unpleasant surprise when you get the bill for the actual cost of those items. Even if you aren’t ready to make a final selection of items, you can get a rough idea of their cost by going to the store or looking online to get a sense of the price range for the style and level of quality that want. Don’t forget to include the cost of sales taxes and delivery charges for the items.
SELECT THE CONTRACTOR
Once you have all of the bids in hand, don’t automatically choose the lowest bidder. Be wary of any bid which is much lower than the others. A contractor whose bid is substantially lower than the others may have left something out of his estimate and may try to cut corners when he realizes that he can’t do the project for that price. All else being equal, it's better to spend more and get someone who is competent, has a good reputation, communicates well and whom you’re comfortable working with.
NEXT: CHOOSING YOUR CONTRACTOR, PART 2: THE CONTRACT