Most homeowners decide to hire contractors for just about any kind of  home  renovation or improvement. Contractors are basically the  middlemen between  material suppliers, construction workers and clients.  By hiring them, clients secure their funds and property from poorly done  work and unnecessary costs,  but there are some things that contractors  won’t tell you. Get the inside scoop on contractors and learn some tips to save you valuable time and hard-earned  money.

 Do Not Have Appropriate License

As in any job, there are good and bad contractors. That’s why almost all states require some kind of license for doing this kind of work. There are a lot of  contractors that don’t have these licenses, and by hiring them you won’t get any kind of security that your project is going to be done professionally.

But the state or local-municipality license is not the only proof that you hired a good contractor. You should also ask for referrals from past and current clients. It is also wise to ask to see some of the contractor’s previous work. You should review both completed and ongoing projects to make sure the contractor you choose does her/his job responsibly and with care.

Large Deposits Not Spent On Buying Materials

Large deposits you pay before the renovation starts are in most cases not used for covering initial materials and set-up costs. These big deposits are often taken by the contractors and in some states these are limited by different laws and regulations. Various contractors decide to take big deposits, sometimes even higher than the state limit, and at the same time they have agreements with their suppliers to pay for the material at the end of the fiscal period.

If you give a big deposit to your contractors and your project doesn’t go well, it would be a huge drag to collect the refund. That’s why the best bet would be to check the law beforehand and to always pay the deposit with a credit card, since this way it will be easier to track the money if something goes wrong.

 Earn A Lot On Small Repairs And Simple Renovations

Although everybody thinks that contractors earn most of their funds on big renovation projects, clients don’t know that smaller projects and repairs are largely overcharged, and that is where most contractors profit. Small repairs and renovations can be done by anybody with a good do-it-yourself (DIY) book and the right set of tools.

When there are a lot of free DIY instructables online and good quality tool shops, there’s no need to hire professional contractors for small changes and updates.

constructions workers, rocks truck

Lack of Proper Insurance

It is important for contractors you choose to have both liability and workman’s compensation insurance. It is wise to ask for copies of these documents, otherwise worker’s injuries can cost you a lot.

Some homeowners go that extra mile and ask contractors to add them to their insurance policy, so they can review all changes in the insurance coverage. This should be done, even for the smallest home modifications and repairs, since a possible injury can cost you millions of dollars.

Mark Up Labor And Material Costs

A contractor is a person who organizes building work or home renovation. This means that they usually depend on a number of other people who actually do the work or sell the construction materials. The contractor is the person who puts everything together and takes a fat percentage for managing the project.

Labor costs are usually marked up and provide one way for contractors to earn their salaries, but most people don’t know that they often over estimate material costs as well. So next time when you are negotiating with the contractor, you should purchase the materials beforehand. This way you will skip paying additional contractor fees.

When Do-It-Yourself Works

Of course, there are renovations and construction works that need to be done by the professional contractor, but there are a lot of home improvement projects that can be effectively done yourself, such as building a patio or installing new lighting. This way you will save money and learn new home improvement skills.

Neil Adams is a homeowner and DIY enthusiast, especially interested in sustainability and environment-friendly projects. He loves trying new tools and old materials in his endeavors. When not tinkering around the house with his kids, Neil enjoys writing for a number of home improvement and technology blogs. He is a regular contributor and editor on Smooth Decorator.

Photo 1: Courtesy of Elvert Barnes on Flickr

Photo 2: Courtesy of U.S. Army Corps of Engineers (by Shannon Bauer) on Flickr