10 Industry secrets for hiring the best home improvement contractor at the best price.

Are you hiring a home improvement contractor to do remodel your kitchen, put on a new roof, or even install an addition to your home? Hiring the right contractor can be a risky, often scary proposition for a homeowners, especially since horror stories of shoddy work and frauds abound.  So we tok the time to poll several contractors themselves, to give you their insider information and tips how to hire the right person, get the best work done, and save a ton of money.  Here's what they said:

1. Schedule work in the off-season.
Too many homeowners wait until the busiest time to call a contractor, but then get frustrated that everyone is booked for months or charging top dollar.  Don’t wait until the hottest week of the summer to get your air conditioner serviced, or the nicest stretch of weather to get your house painted.  Plan ahead and try to book contractors in their slow season – usually winter, rainy times, or even holidays for a lot of businesses.  By being flexible with the timing and getting things done off season, you’ll be able to get the best price because they’ll just want to stay busy and make payroll for their crew.

2. Utilize preventive maintenance.
We see people wait and wait and wait until a small problem becomes a big problem and then becomes an emergency.  It’s almost like homeowners are afraid of bad news (or the cost) if they find something wrong, so they ignore the problem.  I assure you that will cost way more in the long run.  Neglecting common maintenance, like loose gutters, missing roof shingles, dirty filters, uncaulked windows, etc. can lead to bigger problems and even major water damage, so don’t be afraid to get a handyman to give your house a “check up” or look over every spring or fall, so you can find problems when they are still small and easily addressed. 

Also remember that when it comes to house painting, caulking, etc. 2 sides of your house – the south and west in sunny areas, or wettest and least sunny in cold weather climates, usually weather the fastest.  Too many people wait until the whole house needs painting, leaving those 2 sides way too neglected.  Instead, don’t be afraid to get half the house painted, or even the single most weathered side, as needed, without having to paint the whole thing.

3. Know when to use a general handyman and when to use a specialized pro.
A handyman is someone who handles a lot of small jobs, but probably doesn’t specialize in just one thing.  They’re great for every day tasks, like installing a ceiling fan, painting a room, installing tile on a kitchen floor, or changing a toilet, but bigger, technical jobs may be out of their realm.  Always use licensed contractor who specializes in their one vocation when it comes to significant electrical, major plumbing issues, roofing, or foundation or structural issues.  However, calling these big-job pros for very small jobs on your honey-do list might cost too much, and be suitable for a handyman.

4. Research them online.
Do a little digging into the online reputation of the contractors you are hiring.  There are plenty of websites out there – Google, the Better Business Bureau, Department of Consumer Affairs, Angies List, Home Advisor, etc. who will alert you to any problems or complaints against home improvement firms.  Of course you don’t want one subjective review from one customer to make the decision for you, but if there are major violations on file, or consistent complaints by multiple consumers, it’s probably best to move on.

5. The art of asking for references.
This is a tip that will really help you out – and might put a few contractors on the defensive!  Of course homeowners always ask for references (usually 3 for some reason, but I recommend 5) but too often the contractor just gives them the names and numbers of 3 people who were very happy with their work.  Instead, for referrals from the last 5 jobs they did chronologically – not just 5 total.  That way they won’t be able to pick and choose only the positive ones, and if they give you a list of names and numbers and there’s a time gap, you know something was less-than favorable during that time.

6. Work begets work.
Understand that good contractors always want to stay busy, and getting new work is a big part of their focus.  So when negotiating a price (always negotiate) let them know you’ll give them good reviews online, testimonials for their websites and social media, act as a reference for future clients, you’re your neighbors and friends about them, and allow them to put signage up in your front yard while they work.  They’ll appreciate your efforts to help them market, and probably will offer a better price.

7. Hire the tired-looking family man.
Trust me on this, you want to hire the family man who’s been in business for a while who looks tired.  They’re the ones who really need to work to feed their families and their own mortgage.  Be wary of the young college kids with nice tans who come in under everyone else’s price – they probably won’t have the same experience, or motivation to work hard.  Definitely be careful of the slick-talking salesman who offers to give you some special deal that no one else will, promises the moon, and just happens to have a completely free schedule starting Monday.  If it’s too good to be true, it ALWAYS is when it comes to home improvements.  

Make sure to ask who will be doing the actual work - the contractor himself?  His crew?  Unlicensed subcontractors or cheap day laborers?  Ask if he'll be on site at all times.

8. Get it all in writing.
A written contract is your only legal protection if things go south and the work isn’t performed correctly. Therefore, take some time to make sure the contract for services looks good.  Ask questions and make sure all points are covered.  Make sure you have their home address, office address, all contact information, and a copy of their contractor’s license on file.  Clarify start time and when the work will be completed.  This is very important because too often contractors take on more work than they can chew, just to get the deposit or some up front money, and then they keep juggling between jobs.  Clarify if they will only be working on your job exclusively, and if the job runs behind schedule, build in a reasonable per-day discount fee for your inconvenience (and to motivate them.)  Make sure it’s clarified who will pay for and transport materials (and what quality they’ll use) and if they’ll clean up trash once the job is done.  

Very important – NEVER pay everything up front.  Once you hand over all (or most) or the money for the job, it’s amazing how quickly their motivation will wane.  Plus, it’s illegal, and most states have regulations on how much up front money then can charge.  I usually break the total cost into 3 payments – the day the work is started (or to pick up materials,) halfway through at some predetermined completion point (like when the house is prepped and primed, for house painting) and then upon completion when you are happy with the work.  Make SURE to have their money when you say you will to keep it fair.

9. Understand the three levels of estimates.
Get at least three estimates for the work you need done (but five is even better.)  Type out a “spec” sheet with the exact work you want done, specific materials, etc. so you can compare apples to apples once they submit bids.  Ask for references with their bids.

There are usually three levels of estimates – one contractor who will charge through the roof, basically trying to get as much as the customer will pay.  They lose a lot of jobs this way, but take advantage of uninformed homeowners or people with means.  Hey, God bless America, they can charge whatever they want!  The second estimate is middle-of-the-road, work that is priced moderately and consistently by several contractors.  The third is work that is drastically less than even the mid-range bids.  I highly recommend you throw out the highest bids and stay the heck away from the lowest bids – choose someone with a middle-of-the-road price that is fair for you and fair for them, but most importantly they will do the work correctly and finish the job to your satisfaction.

10. Cash is king!
The last tip is one that is sure to save you money.  Honest contractors work extremely hard for their money, and love to keep ever cent in their pocket (by not giving it to the IRS) as possible.  Therefore, they LOVE customers who pay cash.  Whether they declare the income on their taxes or not is none of your concern, but at the very least it gives them a lot more flexibility.  So AFTER you get a written bid from them, ask what they would knock off if you agreed to pay cash.  Most contractors will entertain a cash discount, and may even knock off 5-10% off the price. 

Flipping homes isn't easy but can be very rewarding with these strategies.

It’s true – flipping houses certainly is not easy. Though the practice was popular in the real estate boom, we could argue that people who tried to buy homes, fix them up, and resell them immediately for a profit were more speculators than sharpened flippers, riding the easy wave of rampant appreciation and no-risk financing. And while the real estate bust did litter the market with rock bottom priced foreclosures and short sales, many of the true bargains were had by cash buyers and institutional investors, not the average Joe.

But these days, even with our modest or leveled appreciation and common sense financing, it’s still possible to flip a home for profit. Flipped homes accounted for 4.6 percent of all U.S. single-family home sales in 2013 according to RealtyTrac, up from 4.2 percent in 2012 and only 2.6 percent in 2011. But caveat emptor – buyer beware – fixing and flipping correctly are functions of market research, competitive advantage, realistic goals, and patient strategy, not glamorous deal-making (like on the real estate TV shows) and quick $100,000 profits. So if you are going to undertake a “flip” the right way, here are some points to consider:

What’s your competitive advantage?

It’s tough to go into a home purchase with the intent to flip it without some sort of advantage that will make the numbers work in your favor. Do you have cash – or access to it – so you can close quickly and make offers on homes that are impossible to get loans against? Are you a contractor who can do the fixing work yourself? Without something in your favor, you may have a tough time.

If not, partner up.

If you don’t have that advantage don’t despair; you can partner up with someone who does have cash or is a contractor. In fact, having a partner for the first couple of flips you do is a great way to defer risk. Your contribution will most likely be the time and management it takes to make the whole thing happen.

What to look for in a house.

There are different strategies of course, but when starting out, I recommend looking for location, location, location…and square footage when identifying a property to flip. Find a big house in a desirable neighborhood that needs a lot of cosmetic work – like paint, carpet, tile, landscaping, etc. Once you do the work modernizing it, your value will be virtually guaranteed because of its size and neighborhood.

The right contractor is everything.

It’s extremely difficult to pay top-dollar retail prices on construction work and still pencil out a flip, especially if you get into big items like the roof, heat and AC systems, etc. But there are plenty of smaller contractors hungry for work who will do a great job. Have your team in place well ahead of closing on the purchase of the home and have all the work, materials, and timelines coordinated so you hit the ground running. Build performance or late clauses into their contracts so if they don’t perform, they’re not getting paid.

Of course you’ll want a great home inspection done before you commit to the property, and have your construction team with you to walk through and start planning at that time.

Timelines.

As a general rule, things always take longer than expected with a flip. There are always sneaky little unforeseen problems that pop up, so just to be safe, whatever your timeline for completion is, build in a 30-40% buffer when running numbers.

Be super conservative with costs.

Likewise, it always costs more than anticipated – almost never less. So budget for the unexpected and you’ll still be able to turn a profit even with obstacles.

Offer, then negotiate.

Remember that an offer to buy a property is really just the start of the negotiation, not the end. Of course you don’t want to waste anyone’s time, but if there is anything you see in the appraisal, roof inspection, home inspection, or seller disclosures that hints of diminished value, have your realtor renegotiate the price. Be aggressive and fair, and only remove contingencies and continue with the deal if you it pencils out as a great flip.

Avoid the “funky” spaces.

If a home has a garage conversion, an addition that looks anything short of perfect, or a sun porch built to be square footage, skip it. You won’t be able to solve those problems easily and the potential buyers will see them as negatives, not positives.

You want to put “lipstick on a pig.”

That’s flipper-speak for a cosmetic fixer, like we talked about. Paint, lighting fixtures, flooring, tile, countertops, landscaping, a few new appliances, etc. are the best ways to fix up a home inexpensively and efficiently and make a profit on the flip. Meanwhile, a new roof, new cabinets, plumbing problems, and installing heat and AC units will put a big dent in your budget. Of course, if you know these problems exist going in and you budget for them and your purchase price is reduced accordingly, then they could be just what you’re looking for.

Have a realistic exit strategy.

You’re always looking to pay less and get a great deal and guess what? So will the new buyer. So don’t expect to get the tip top of the market when you sell. Instead, set an aggressive sales price to attract lots of buyers and create a bidding war so you’ll sell the home quickly.

What’s your plan B?

We all plan to succeed, but with flipping houses it’s a good idea to formulate a plan B. So if the budget gets out of control so you can’t break even at a realistic price or it won’t sell soon enough, have a plan to put some renters in there for 6 months or a year until you can sell it – without losing your money.

Don’t count on appreciation.

I don’t recommend factoring any appreciation into your projected profits for a flip, especially if it’s a short term 3-6 month project. If the market goes up a little in that time, then it will be a bonus.

Be careful of financing.

If you get financing on your purchase and then try to flip it, talk to your lender and read the fine print, first. Many loans had prepayment penalties (less prevalent now) or 90-day flip restrictions (like FHA loans) that threw a monkey wrench in the plans to unload the house quickly.

Time into summer.

One way to maximize buying at the right time (low) and selling at the right time (high) is to buy a home in the winter, fix it up, and then put it back on the market in the spring or summer when there are generally more buyers and interest in moving.

Research.

Know everything about the neighborhood you’re buying in. Study many detailed market analysis and track what properties are for sale, pending, and closed as you’re undertaking your flip. There should be no surprises that you’re in a special flood zone, you can hear the train from the house, or prices are dropping.

Pre-market.

It doesn’t hurt to have a “Coming Soon” sign on the property while you work or flyers showing the projected before and after photos. That will generate interest from passerby’s and those who live in the neighborhood, and you might even have a few people making offers the first day it’s on the market. 

Get ready for lots of work.

Buying, fixing, and flipping is an arduous process, with many early morning meetings with contractors and late nights at Home Depot. Remember that most of your important work is done before you even make an offer, when you’re identifying properties. A good realtor who understands your strategy and price points is invaluable, but you’ll have to do lots of legwork, too, to make sure it’s the right deal.

25 Interesting facts about Home Depot, the world's biggest home repair store.

If you own a home, chances are you are a frequent visitor to a local Home Depot store. Some of us even remember fixing up our first little home, when we practically lived in the Paint and Hardware aisles of the home improvement mega store. But no matter whether you're a weekend DIY warrior or a professional contractor, here are some interesting facts about the world's biggest hardware store:

1. Home Depot is by far the largest home improvement retailer in the United States as well as the world. It now operates in all 50 states as well as the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, Canada, and Mexico, as well as other ventures overseas.

2. It’s also been our fastest growing retailer, surpassing the expansion of Target, Best Buy, and even Wal-Mart.

3. Home Depots operate out of huge warehouse-style buildings, with floor plans averaging 105,000 square feet and offering just about everything a construction project needs, from the biggest builder to the DIY weekend warrior.

4. The largest stores are in Union, New Jersey (225,000 square feet!) and Anaheim Hills, California (204,000 square feet).

5. The company was founded in 1978 by Arthur Blank, Ron Brill, Pat Farrah, and Bernard Marcus. Their original goal was to build superstores far bigger than any of their competition, which provided good prices based on volume purchasing and offered excellent customer service. Some would argue the latter!

6. The first two stores took over buildings leased by J.C. Penny in metro Atlanta in 1979. Home Depot still maintains its corporate headquarters in nearby Cobb County, Georgia.

7. Every year, Home Depot totals about $90 billion in sales on average, with ¾ of that coming from retail sales. It’s a permanent fixture on the Fortune 500 list of biggest companies in America.

8. Throughout the 1990s and 2000’s, Home Depot has frequently amended its company slogan. Since 2009 it’s been “More saving. More doing” which replaced "You can do it. We can help,” the slogan since 2003. Other past slogans include "The Home Depot, Low prices are just the beginning", "When you're at the Home Depot, You'll feel right at home", and "The Home Depot: First In Home Improvement!"

9. Home Depot now dominates the online construction and home improvement market as well, with at least 120 million visitors to their site every year.

10. Home Depot has the most employees who are Olympians and Olympic medal winners of any company in the world.

11. The company is active in politics, with 72% of their campaign contributions going to Republican candidates in past elections. Former Home Depot CEO Bob Nardelli was a personal friend of U.S. President George W. Bush and made the maximum allowable contribution to his campaign.

12. The Home Depot is a huge advocate of athletics on every level. NASCAR driver Tony Stewart pilots the Home Depot car and they support Joe Gibbs Racing. The Home Depot also have supported the U.S. and Canadian Olympic teams and co-founder Arthur Blank owns the Atlanta Falcons 

13. You can buy some strange things in Home Depot, including a Remington heat clip set for hair extensions, a brownie making machine, a children’s’ potty training kit, pink Flamingo statues, a $600 Viking corded phone, and a jerky gun to turn your dried meats into jerky sticks.

14. The Home Depot has long flirted with an international presence. It has 180 stores in Canada in every territory and employs 35,000 people there. It also has 11,000 employees in 106 stores in Mexico with an annual 10% growth rate. At one time they also expanded to Chile and Argentina, though those experiments soon were pulled back.

15. Looking to cash in on the prosperity and real estate boom in China, they opened 7 stores, but closed those in 2012 because of fledging sales. Apparently it was a cultural difference that precipitated the failure, as Chinese shunned Home Depot’s “Do-It-Yourself” philosophy. In China, manual labor is considered for commoners or lower class, and the Chinese who could afford Home Depot wanted completed design and remodel projects, not step-by-step help and tools. A representative of Home Depot said it best in an interview with the Wall Street Journal: "The market trend says this is more of a do-it-for-me culture.”

16. Despite their international setbacks, Home Depot is still considering expansion to the UK, Ireland, and Poland.

17.Despite the success of their super stores, Home Depot has had plenty of failed business experiments, too. They opened several convenience stores and fueling stations aimed to attract contractors, builder based HD Supply, and a line of home furnishings, landscaping suppliers, and an EXPO appliance design center

18. In a gruesome scene that played like something out of a zombie movie, a man once walked into a Home Depot in California, grabbed a sheet rock saw, and started sawing his own arm off. A police officer in the store immediately applied first aid, saving his life. No one knew why he did it though it was thought he was in some sort of drug-crazed episode.

19. The real estate market crash of 2008 hit Home Depot particularly hard, as they had to close 54 stores nationwide and lay off thousands of employees. In 2008 and 2009, their sales were down approximately $20 billion from their peak.

20. The company is deeply invested in philanthropic causes. The Home Depot Foundation, the charity wing of the corporation, has donated over $200 million in contributions, materials, and time to organizations like Habitat for Humanity, California-based City of Hope National Medical Center, and KaBOOM!, who builds playgrounds in inner cities.

21. Home Depot has a good track record of supporting U.S. military veterans, and offers an ongoing 10% discount to our military community.

22. Inexplicably, Home Depot employees are still not unionized. In 2004, workers at a Detroit store voted down a proposal to garner union representation, which would have made them the first store to do so.

23. In 2014, Home Depot suffered a massive security breach of its customers’ financial data and other records. The damage was discovered to include about 56 million credit card numbers of its customers. To make amends, Home Depot offered a free year of credit monitoring to those affected and revamped their electronic payment systems.

24. Home Depot funds an interesting project at Duke University – the “Home Depot Smart Home”. On campus, ten upper class engineering students live in a special home designed like a research laboratory, collecting their feedback and innovations on security and home monitoring, home technology, communications, energy efficiency, entertainment, and the environment.

25. Home Depot reports that they are environmental conscious, committed "to the environment and pledge to continue to be an industry leader in looking for products and services that are respectful of our world”. While it’s been criticized for not doing nearly enough to promote responsible building, lumber, and chemical waste initiatives, Home Depot has introduced a environmentally-safe label for 3,000 of its products and pushes for recycling and cleaner-energy lighting. The Home Depot Foundation pledged $100 million over the next decade to build 10,000 green affordable home units and plant at least 3,000,000 trees.