Considering Home Renovation?

Tips for finding contractors and getting your plans in order.

If you’re considering a home renovation project, the ultimate goal is the fabulously reconsidered kitchen, the newly installed wine cellar or the genius home theater. But planning experts will tell you: Don’t underestimate the planning time, financial investment and research involved in finding the right contractor to get the job done.

The more defined renovation plan you have—down to the details—the easier it will be to work with remodeling professionals and a contractor. If the project involves installing new wiring, you’ll need a licensed electrician and in many cases, an electrical permit. Similarly, moving plumbing fixtures may require a permit and ultimately an inspection. The more specialists involved—and the more permits and paperwork—the longer the remodeling project will take overall.

You’ll also want to set a budget and determine whether your goal is to improve the resale value of your home or enjoy the renovations for years to come. Making expensive improvements in a home you plan to sell can actually backfire by pricing it out of comparable homes in your area. And many contractors recommend building in a financial buffer to be able to deal with unforeseen problems, like plumbing or wiring that needs to be updated to meet building codes.

Find the right contractor

Once you’ve decided on your project, finding the right contractor is key. Personal recommendations are often best, says Scott Spencer, Worldwide Appraisal & Loss Prevention Manager for Chubb Personal Insurance. You can also check services such as Angie’s List for consumer reviews and the Better Business Bureau for complaints.

Ask what types of projects contractors specialize in; whether they use in-house specialists or subcontractors (and if so, how they select them); if they offer proof of insurance to protect you and their own workers from damage and injury; and if they can provide recent customers as references. Do they carry any bonding to ensure the job is completed on time? Spencer also notes you should ask your contractor for a copy of the “certificate of liability” to confirm adequate insurance limits. For any one incident, the limit should equal the total insured value of the home. “For instance, if you are building a $3 million home, the contractor should have at least $3 million in liability coverage for any one occurrence,” he says.

Review the contract

When you’re ready to review the remodeling contract, take special care to look at all its sections and have it reviewed by your attorney if the project is sizeable or you could benefit from the extra set of eyes. The contract should include the details of the project start and end dates—including interim dates for multi-phase projects. Information about permits, licenses and inspections should include license numbers and whose responsibility it is to obtain them.

Look for payment amounts and due dates. Experts recommend never paying more than one-third of the renovation project’s total cost up front (plus, state and municipal laws may regulate how much a contractor can require as a down payment). Warranties or guarantees should be included in the contract, covering supplies and the final work.

One important tip, Spencer adds: Before signing a contract, be sure that the terms do not waive your right to recover payment for a loss that was caused by a negligent third party—such as a job the contractor outsourced. It’s called “waiving your right to subrogation.” In the event that the contractor is negligent you want to be able to recoup any monies lost from the third party if there is a lawsuit, he says. “This may ensure that your insurance record is not affected by any claims for which you were not responsible.”

While planning a remodel is labor intensive, doing your due diligence can make the process run more smoothly—and make you happier in your new space.