How to Hire a Contractor: A Step by Step Checklist
The short version of how to hire a contractor: write the scope of work yourself before you call anyone, get three bids on that identical scope, verify license and insurance at the source rather than from a handed-over PDF, call references who had problems and not just the happy ones, and sign a contract that ties every payment to a finished milestone. Do those five things and you have removed most of the ways a project goes wrong.
The single biggest lever is the first one. Homeowners who hand three contractors a vague idea get three different projects back and no way to compare them. Homeowners who hand three contractors the same written scope get three quotes for the same work, which is the only comparison that means anything.
Updated September 2026
Every bid you get will be built on quantities. Use our free Square Footage Calculator to measure the rooms, walls and surfaces yourself first, so you can check a bid's quantities against your own numbers before you sign anything.
How to hire a contractor, step by step
Nine steps, in order. Skipping any of the first four is where the trouble starts.
- Define the project in writing. One page. What you want done, what stays, what goes, what you are supplying, and how you will know it is finished.
- Measure everything and write the numbers down. Room dimensions, wall areas, ceiling heights, linear feet of trim, roof or deck footprint. You need these to sanity check what a bid claims.
- Build a short list of three to five contractors. Ask neighbors who had the same trade do the same work. Check the state licensing board's search by trade and area. Local supply houses know who pays their bills.
- Screen by phone before you schedule a site visit. Five minutes saves everyone an hour.
- Get three bids on your identical written scope. Not three ideas. Three prices for one document.
- Verify license, insurance and business registration yourself, at the source.
- Call references, including one from more than two years ago. Old references tell you how the work aged and how warranty calls were handled.
- Read the contract line by line and fix what is missing before signing. Scope, schedule, materials by brand and model, payment milestones, change order process, lien waivers, warranty, cleanup.
- Set up your own project file and a weekly check in. Photos, dated notes, every change order in writing.
Our companion guide on getting contractor bids goes deeper on the bid request itself, and our list of contractor red flags covers the warning signs that should end a conversation early.
Write the scope of work before you make a single call
A scope of work is not a design. It is a description precise enough that two different companies would build the same thing from it. Include these:
| Section | What goes in it |
|---|---|
| Location and extent | Which rooms, which walls, which surfaces, and the measured dimensions |
| Demolition | What comes out, what gets protected, who hauls the debris |
| Substrate work | What happens if the surface underneath is not sound, and who decides |
| Materials | Brand, model, color, size, finish for anything you care about |
| Owner supplied items | What you are buying and delivering, and by when |
| Exclusions | What is explicitly not in this project |
| Finish standard | Level of drywall finish, paint sheen, grout line width, edge details |
| Permits and inspections | Who pulls, who schedules, who meets the inspector |
| Site rules | Work hours, parking, bathroom use, pets, dust control, daily cleanup |
| Completion | The punch list process and what counts as substantially complete |
Two of those rows do more work than the rest. Exclusions stop the argument later, because a bid that quietly excludes subfloor repair is not a lower quote, it is a different project. And substrate work is where nearly every remodel surprise lives. Say in advance how it gets handled: the contractor stops, photographs it, prices it as a change order, and you approve before the work continues.
The finish standard row matters more than people expect. Drywall finish levels are an industry standard from Level 0 through Level 5, and a wall in raking light next to a big window needs a higher level than a bedroom wall. Write down which one you expect, or you will get whichever one the crew usually does.
What actually drives the number on your quote
You cannot judge a bid without knowing what a contractor is pricing. Every quote is built from the same stack, and every one of these levers moves the total.
Quantity. Measured area or length, plus a waste allowance. This is the part you can check yourself. If your measurement says a room is 168 square feet and the bid says 210, either they are including something you did not see or they made an error, and both are worth a question.
Labor hours and crew size. How many people, for how many days, and how much of that is skilled work versus helper work.
Access and staging. A third floor bathroom with a narrow stair is a different job from a first floor bathroom with a door to the driveway. Every sheet, tub and bag has to be carried. Anything needing scaffolding, a lift or roof anchors adds setup days before any work happens.
Prep and protection. Floor protection, plastic containment, dust barriers, moving and covering furniture, and daily cleanup are real hours that appear in a thorough bid and are invisible in a thin one.
Demolition and disposal. Volume of debris, how far it has to be carried, and disposal fees at the transfer station. Heavy debris like tile, plaster and concrete is priced differently from light debris like cabinetry.
Substrate condition and unknowns. Old subfloor, hidden water damage, undersized framing, knob and tube wiring, cast iron waste lines. A contractor either carries a contingency for this or writes it as an exclusion. Find out which.
Code and permit work. Bringing an old circuit up to current code, adding a required vent, or replacing a stair rail because the project triggered it. Permit work also adds inspection wait days to the schedule.
Material grade and lead time. Standard stock versus special order changes both the price and the calendar. A long lead item can hold a crew off your job for weeks.
Season and backlog. Roofers in the fall and concrete crews in the summer are busy. A busy contractor bids to stay busy at a comfortable rate. The same company in a slow month bids differently.
Complexity and detail. Cuts, angles, transitions, and edges. A rectangular room with one door is fast. The same square footage broken up by a bay window, two closets and a stair landing is not.
Warranty and business overhead. A company that answers warranty calls, carries full insurance, runs payroll and keeps a crew on staff year round has costs that a one truck operation does not. That gap is real value, not padding.
How to compare bids apples to apples
Print the three bids and build a comparison sheet with your scope down the left side. Do not compare totals. Compare rows.
| What to normalize | The question to ask each bidder |
|---|---|
| Measured quantities | What square footage or linear footage did you use, and how did you measure it? |
| Waste allowance | What percentage of waste is in your material quantity? |
| Demolition and haul away | Is disposal included, and is a container included? |
| Substrate repair | What is your allowance if the surface underneath is bad? |
| Materials | Is this the exact brand, model and grade in my scope? |
| Owner supplied items | Which items am I buying, and by what date do you need them? |
| Permits | Who pulls them, and are permit fees inside your number or billed at cost? |
| Protection and cleanup | Is containment and daily cleanup included or extra? |
| Subcontractors | Which trades are subbed, and are those trades licensed and insured separately? |
| Schedule | Start date, working days, and what happens if it runs long |
| Payment milestones | What has to be finished before each payment is due? |
| Warranty | How long, on labor and on materials separately, and in writing? |
| Exclusions | What is specifically not included that I might assume is? |
When one bid is far below the others, the answer is almost never that the company is more efficient. Nine times in ten they scoped a smaller job. Ask what is excluded, and you will usually find it in one of the rows above.
Worked example: comparing three bids on one bathroom
A hall bathroom, 8 ft by 10 ft. Tile the floor, tile the tub surround, replace the vanity and toilet, new light and fan, paint.
Measure first and write the numbers down:
- Floor: 8 x 10 = 80 square feet, minus the tub footprint of about 5 x 2.5 = 12.5 square feet, so about 67 square feet of tile.
- Tub surround: three walls, roughly 5 ft + 2.5 ft + 5 ft = 12.5 linear feet, tiled to 6 ft high, so about 75 square feet.
- Painted wall area: perimeter of 36 linear feet times 8 ft ceiling = 288 square feet gross, less the door, window and tiled surround.
- Waste allowance: 10 percent on a straight tile layout, 15 percent on a diagonal.
Now the three bids come back. Bid A and Bid C are close to each other. Bid B is well under both, and the temptation is obvious.
Reading the rows instead of the totals turns up three differences. Bid B lists 60 square feet of floor tile, which is short of your 67 plus waste, so it will run out. Bid B excludes subfloor repair entirely, on a bathroom where the floor already feels soft at the toilet. And Bid B lists a bath fan by capacity but no duct work, in a bathroom whose current fan vents into the attic.
Bid A carries a written substrate allowance, a fan ducted to a roof cap, and the exact tile from your scope. Bid C matches Bid A on scope but starts six weeks later.
The comparison is now real. Bid B is not cheaper. It is a smaller project that will grow through change orders once the subfloor is exposed. The choice is between A and C, and it comes down to schedule.
That is the whole discipline. Measure, list, compare rows, ask the question the missing row raises.
Verify license, insurance and references properly
License. Search the state board's own site by number and by business name. Confirm the status is active, the classification covers the trade you are hiring, and the name matches the business on the bid. Read the disciplinary history, which most boards publish.
Insurance. Ask for the agent's contact details, then ask the agent to send you the certificate directly with your name and project address on it. You want general liability and workers compensation confirmed separately. If a crew member gets hurt on an uninsured job at your house, that can land on your homeowners policy.
Business registration. Look up the entity with your Secretary of State. Confirm how long it has operated and that the address is a real place. A business that renames itself every couple of years is often outrunning its own history.
References, done right. Ask for three, and specifically ask for one from at least two years ago. Then ask these:
- What went wrong, and how did they handle it?
- Did the final number match the contract, and if not, why?
- Did they finish on the schedule they promised?
- Was the site clean at the end of each day?
- Did you have a warranty call, and how fast did they come back?
- Would you hire them again for something bigger?
The warranty question is the most revealing one on the list. Anyone can be pleasant while they are being paid.
The contract: what has to be in it before you sign
| Clause | Why it protects you |
|---|---|
| Full scope by reference | Attach your scope document and name it in the contract |
| Materials by brand, model, color and size | Stops substitution of a similar item |
| Allowances stated in units, not vaguely | An allowance of "tile" is meaningless, an allowance of a defined grade is not |
| Start date and working day count | Gives the schedule teeth |
| Payment tied to completed milestones | You pay for finished work, never for future work |
| Change order process in writing | No verbal changes, ever, signed before work proceeds |
| Lien waivers with each payment | Protects you from a sub or supplier who was not paid |
| Permit responsibility | The contractor pulls permits for their own work |
| Cleanup and debris removal | Named explicitly, including who supplies the container |
| Warranty terms | Labor and materials, with a term and a phone number |
| Punch list and final payment | Final payment comes after the punch list is signed off |
| Termination clause | How either side exits, and what is owed at that point |
On payments, the principle is simple. Money follows finished work. A deposit that covers ordering materials is normal. A schedule where you are always slightly behind the work, never ahead of it, is what keeps a project moving and keeps your leverage intact until the last item is done. Many states cap what a contractor can collect up front, so check your own state's rule before you agree to anything.
Never let the final payment go before the punch list is complete and the permit has passed its final inspection. That last payment is the only reason anyone comes back for the small stuff.
Questions to ask before you sign
- Who will be on my site every day, and who is the one person I call?
- Which parts of this job are subcontracted, and are those subs licensed and insured?
- How many jobs will your crew be running at the same time as mine?
- What is your process when you open a wall and find something unexpected?
- How do you handle a change order, and how fast do I get the price?
- What does a normal week look like: start time, end time, days on site?
- Where will materials and debris be staged?
- What is the last day you would call this project finished, in the worst case?
- Who cleans up, and what does the site look like on a Friday afternoon?
- What is your warranty, and can I see it in writing?
What makes an estimate go up mid project, and how to control it
Almost every increase comes from one of four places. Three of them are avoidable.
Owner changes. You saw a different tile. This is the most common cause and it is entirely in your control. Make decisions before the start date, not during.
Hidden conditions. Rot, old wiring, a leak nobody knew about. Not avoidable, but manageable if your contract already says how it gets priced and approved.
Scope that was never written down. The thing you assumed was included. Avoidable with the scope document.
Schedule drag. Long lead materials, permit delays, weather. Ask about lead times before signing and order early.
Two habits keep the number honest. Approve every change order in writing before the work happens, with a price and a schedule impact on it. And keep a dated photo log, especially of anything about to be covered up by drywall. If you want a sense of which projects tend to return value at resale, our page on home improvement return on investment is a useful gut check before you expand a scope mid project. And for the human side of it, living through a renovation covers dust, schedules and staying sane.
FAQ
How many contractor bids should I get?
Three is the working number. Two gives you no way to spot an outlier, and five wastes everyone's time, including yours. What matters far more than the count is that all three are bidding the same written scope, because three bids on three different assumptions tell you nothing.
Should I hire the lowest bidder?
Only after you understand why it is lowest. A low number usually means a smaller scope, a thinner allowance for the unknown, less protection and cleanup, or subs you have not vetted. Once you have normalized all three bids to the same scope, the lowest one is often no longer the lowest.
Do I need a general contractor or can I hire trades directly?
Hire trades directly for a single trade project like painting a room or replacing a water heater. Use a general contractor once a project involves three or more trades in sequence, because the value of a general is scheduling, coordination and being the one throat to choke when the tile guy shows up before the plumber has finished.
What should I never pay for up front?
Never pay for the entire job before it starts, and never pay in cash to an individual instead of a business. A deposit that covers ordering materials is normal practice. Anything beyond covering materials and mobilization means you are financing someone else's business, and your leverage disappears the moment you do it.
What is a lien waiver and do I really need one?
It is a signed document from the contractor, subs and suppliers confirming they have been paid for the work covered by that payment. Without it, a sub who never got paid can put a lien on your house even though you paid the general in full. Make signed waivers a condition of each payment and the problem disappears.
How do I check a contractor's license?
Go to your state's licensing board website and search by license number and by business name. Do not accept a photo of a license card, since photos are easy to alter and easy to have expired. Confirm the status is active, the classification matches the trade, and the license holder's name matches the business on your bid.
What happens if the work fails inspection?
The contractor fixes it and calls for a reinspection, and that should be in your contract as their cost and their responsibility. This is one of the main reasons the contractor, not you, should pull the permit. If you pulled the permit, the code official considers you the responsible party.
How long should a contractor's warranty last?
Ask for labor and materials separately, since they are different. Material warranties come from the manufacturer and vary widely by product. Labor warranties from the installer are commonly a year or more, and the real test is not the length but whether the reference you called two years later said the company actually came back.
