How to Hire a Contractor: The Complete Process

The best referral is a neighbor who completed the same type of project you're doing, in the same climate, in the last 1–2 years. Ask to see the finished work in person. This is worth more than any online review.

Every state has an online lookup. Search "[state] contractor license lookup." Find licensed contractors in your specialty and geographic area. This is a better source than lead-gen platforms — these are contractors who bothered to get licensed.

Lumber yards, tile suppliers, and roofing distributors know which contractors pay promptly and buy quality materials. A contractor with an account at a good supply house is meaningfully more vetted than one you found on a lead platform.

Search your state licensing board, enter the contractor's name or license number. Confirm: active (not expired or suspended), correct specialty, no disciplinary actions. Do this for every contractor before they set foot on your property.

Get an actual certificate of insurance (COI) showing general liability and workers' compensation coverage. Call the insurance carrier to confirm it's active. Expired or fake COIs are common. Without workers' comp, you may be liable for injuries.

Request references specifically for the same project type you're doing. Call them. Ask: "Did they finish on time? Within budget? How were change orders handled? Would you hire them again?" A contractor who cannot provide references is a contractor with no satisfied customers to show.

Give every contractor the same written scope document: dimensions, materials, inclusions/exclusions. Without a standard scope, you get bids for different jobs. BidLens can help you build this spec.

Three bids from the same scope reveals the market rate and outliers. The lowest bid is often a red flag — either scope is excluded or the contractor plans to use change orders. The highest is often marketing, not quality.

Total bid price is meaningless without knowing what's included. Compare: materials (brand, tier), labor breakdown, what's excluded, payment schedule, timeline, and warranty. A $2,000 lower bid that excludes permits and demo is not a better bid.

The contract must include: exact scope of work, specific materials (brand and product line), start and completion dates, payment schedule tied to milestones, change order process (written + signed before proceeding), and warranty terms.

Industry standard: 10–20% deposit to secure the schedule, additional progress payments tied to milestones (materials delivery, framing complete, etc.), final payment after completion and your walkthrough. More than 33% upfront removes the contractor's incentive to finish correctly.

The most common way homeowners overpay is approving verbal changes mid-project. Every change to scope, price, or timeline must be a signed written change order before the contractor proceeds.