10 ways to help your customer pick the “right” contractor (you).

I just got back from seeing the new home my oldest daughter was looking to buy. She wanted me to look at it because I have enough contracting experience to know about the structure of a home and the mechanical systems. (She’s also wise enough to know that I’m now too old and too lazy to be much help with actual work and only really good at giving sound advice.)

The place, frankly, fit the real estate creed of “Location, Location, Location.” It’s an up-and-coming area of a major metropolitan city and she’s smart enough to know that this is closer to the bottom in the housing market than the top.

Unfortunately, the real bargains still require some work. And this place will be needing plenty!

The heating and cooling system is probably 30 years old; the kitchen and bathrooms were current, if you think 1960 is current. And there’s much more work to do. But, the good news is the structure, which is 8-inch solid brick, is good and the walls, ceiling and real wood floors are in great shape.

My words of wisdom to her were, “Find yourself a great contractor and develop a good working relationship, because you’re going to be working together for quite awhile.” So here are the Top 10 Tips I shared with her on how to qualify a good contractor:

    1. Do an Internet search on the owner and the company and see what comes up - both good and bad. You want to see testimonials from customers who are just like you.

    1. Try to get referrals from your friends and family who have had a good experience working with a contractor in the last two to three years. I say two to three years because things change fast.

    3. Make sure they’re licensed to work where you live so you’re covered if and when permits need to be pulled. You don’t want your job being stopped in the middle and scrambling.

    4. Make sure they’re insured for at least Workman’s Compensation and that they have a Certificate of Liability.

    5. Set a budget range for the project and know going into it that things come up and choices need to be made. I recommend you figure it’ll cost more money and take longer. If it doesn’t, you’re way ahead of the game.

    6. Set up installment payments that give the contractor an incentive to stay on-track, hit objective goals and have a clear completion date.

      Ex:  25% upon signing, 25% on rip out, 25% on install and 25% on completion and inspection (as necessary) all done by Dec. 31, 2009.

    7. Make sure you pick three contractors to come and bid the job. Let them know it’s only going to be three and not 30 bidding. You also want them to know that everyone coming to give a price has been by recommendation. Also, let them know a budget range, but keep it about 10 percent less than your walk-away price.

    8. Have them price up all the options within your budget goals so you can say yes to what you really need. Then see if the budget allows for what you’d also really like.

    9. Try to let the contractor buy all the materials. That keeps you from being stuck in the middle when something goes wrong. What I mean by that is the place that sold you the materials blames the contractor and the contractor blames the place that sold you the materials. If need be, go to the supplier with them so you know what choices you have.

    10. Make sure you have a clear understanding of what they will and won’t guarantee and for how long.
Why did I share this with you?

The contractors I work with have been trained to be the prospect’s “Expert Advisor.” And they’re sincerely interested in helping them have a successful contracting experience. They also have worked with me long enough to be able to successfully address each and every one of the items above in a positive way. They even have testimonials from their customers who say the things that address these items and give the third-party stamp of approval. That’s why, in general they are able to ask for more money and get it than the average contractor they compete with.

So if you want to make more profit, get yourself in position to address these Top 10 issues (and even more if you can) and then back it up with customer testimonials.