Spring is in the air, and soon the sights and sounds of work crews installing new roofs, replacing siding, building decks, and planting greenery will appear all around your neighborhood. Are you ready to make some smart recommendations to clients?
Of course, you have to be careful. Tales about unskilled and unscrupulous workers who hightail it out of town with a homeowner’s funds before completing a job are legendary. Some of these stories may be true, others embellished narratives of what happens in worst-case scenarios, perhaps inspired by films like “The Money Pit,” a comedy that’s hardly funny for those who can’t seem to turn off the financial spigot needed to fix their homes.
To be fair, contractors have their share of real-life homeowner horror stories, too. Some clients add dramatically to the scope of a job or change their mind midstream about materials that have already been ordered. What’s more, they may expect a contractor to make these changes at no extra cost and still finish the project on time.
While you don’t have to act as referee here, you can improve the odds that the two sides forge a good work relationship by sharing your knowledge as a real estate professional. That’s why it’s important to have detailed criteria when choosing who makes it onto your list of trusted professionals. Think of yourself as the first line of defense, asking the right questions up front: What’s your record for finishing on time? How often do you come in on budget? What’s your process for finding good subcontractors to work with?
It pays to use a crowdsourcing approach to gathering potential contractors to recommend to clients. Sales rep Chris Vasilakopoulos says he and colleagues at Dream Town Realty in Chicago regularly share names of trusted professionals on an office contractor referral list. He also keeps his eyes open. If he sees a home with wonderful detailed millwork, such as a coffered ceiling and wainscoting, he'll ask the homeowner for the names of the general contractor and subcontractors responsible and ask how they were to work with. “I’m frequently asked by homeowners for referrals, and among my favorite ways to get them is to ask past clients who had work done and were happy,” Vasilakopoulos says. Another tactic is to ask subcontractors, mortgage lenders, real estate attorneys, landscape professionals, and insurance agents whether they have recommendations.
Some may wonder if such a list is really necessary in the age of Yelp and HomeAdvisor. But the process of asking friends and family or looking at online review sites should be viewed as a starting point rather than final stamp of approval, according to Debra M. Cohen, who operates a contractor referral business called Home Remedies from Long Island, N.Y. She adds that you and your clients can’t know reviewers’ criteria for craftsmanship, pricing, and customer service, so it’s vital that such recommendations are just one part of the hiring process.
If you’ve been in the business awhile, it might be time to make sure your list of recommended contractors is still up-to-date. Periodically recheck licenses and peruse online review sites to verify that a craftsperson is still deserving of your seal of approval. There’s a scheduling element here, too; good contractors may be tougher to find as weather improves. Often, the best are already booked by the time remodeling season comes around (as well as in the aftermath of natural disasters).
Here are eight key elements to keep in mind when you’re compiling—or updating—your list of trusted home improvement pros. We’ve also included helpful tips to share with homeowners who are vetting potential contractors, to help improve the odds that their project runs smoothly.
1. Check credentials and skills. Many trades—such as plumbing, electrical, and HVAC—require a license, insurance, and accreditation. But there’s no national accreditation system for general contractors. Furthermore, states have very different rules governing who’s allowed to work where, according to the National Association of State Contractors Licensing Agencies. Another important distinction is between being licensed and being registered to work. While some states require licensing—which tends to involve passing exams and proving reasonable competency in a trade—others only require registration, which is simply a written record of who is performing the work that doesn’t guarantee expertise.
2. Inquire about a contractor’s history and focus. Ask them what past projects they really loved working on, what their specialties are, and what type of work they tend to outsource. Also, find out what their scheduling process is like and how many jobs they typically manage at a given time. It’s far better to know that they’re too busy now but could start a new project in a month, for example, then to be surprised by calendar conflicts after the project has begun. See how they feel about taking on small handyman-type jobs, or if they’ll only agree to do so if homeowners bundle them. Finally, ask how long they’ve worked as a contractor and how long they’ve operated their own business. The two require different skill sets, says Cohen, who’s run her own firm for 22 years. While one doesn’t necessarily need to be an expert businessperson to be a skilled craftsman, the organizational skills a general contractor needs in order to get the job done on time are critical.
3. Find out how they stay in touch with clients. A lot of relationships break down not because of dishonesty or subpar skills but a lack of clear communication, says contractor Tom Sullivan, owner of T.M. Sullivan Construction in Norwell, Mass. “By communicating well, we manage expectations and help keep customers happy,” he says. Expectations need to be spelled out—for example, tell your client to relay how often they want to hear about progress and whether via email, text, or a phone call. And if you know a contractor really only responds to texts and your client needs face-to-face contact, don’t match them up as a team unless one side is willing to switch preferences.
4. Visit completed jobs in person. Explain to clients that word-of-mouth referrals are fine, as is seeing finished work on a website or in photos. But a far better way to examine results is up front and in person. Most contractors have prior clients who allow other homeowners to stop by and see their workmanship. Use your unique position as a real estate professional who spends a fair amount of time in other people’s homes as a way to get to know the handiwork of local contractors firsthand. When you see good work, ask who did it and how recently; ask about subcontractors, too. Some contractors have a regular team that works with them; other times, they assemble the right workers based on the specific project.
5. Be nosy about work ethic and attitude. It may be tempting to emphasize the final product over the process, but both are important. These workers will be inside your clients’ homes and neighborhoods, where respect is important. If the contractor or subs start showing up late or ignoring house rules—perhaps by smoking on the premises, trekking dirty shoes through an interior, or using a house bathroom when clients specified having a portable toilet set up outside—your recommendation could backfire. Ultimately, your clients will decide what works—and doesn’t—for them, but occupational habits are important elements to consider for everyone involved.
6. Bid out jobs to several contractors. Advise your client not to rush into a deal. Even if the first bid has a reasonable price and timeline and comes from a contractor with a good track record, it’s important to get another point of view or two. This is especially important for involved, costly projects where each contractor may suggest a slightly different approach. “Know what you want and convey that same information to each so they price the same job or scope,” says Sullivan. “You also may go with one, but use parts of ideas from all.” And always be sure that the contractor breaks down the estimate into fees for materials, parts, and labor, which makes it easier to compare apples to apples. Finally, convey that the cheapest isn’t always best. John Nations, chief residential real estate superintendent for T.D. Desert Development in LaQuinta, Calif., suggests homeowners “go with the lowest ‘responsible’ bid.”
7. Get everything in writing. Some contractors and homeowners are happy to start work on a verbal agreement or with a handshake. Neither may hold up if disputes arise. A written contract covers a variety of elements, from who secures the necessary permits to which manufacturer’s windows and doors are to be installed. “You want a paper trail,” Cohen says, recommending a contract even for minor jobs, such as fixing screens. Jose Oritz, project manager at Cicero’s Development Corp., a renovation company in Plainfield, Ill., says his firm’s contracts also cover assumptions such as a subfloor being in good shape and not needing patching. “And then if it isn’t, additional work needed would be billed at a time and materials charge, which is also specified,” he says. Warranties listed in the contract for labor, craftsmanship, appliances, and materials also will help if something goes awry later, or at least during a specified period. And most detailed contracts offer a way to resolve disputes.
8. Don’t pay until the punch list is fulfilled. It’s typical for homeowners to withhold 10 percent of the total cost until the contractor satisfies every point on their “punch list”—any work that wasn’t finished or hasn’t yet met the home owner’s approval when the job is close to completed. When all is finished, Cicero’s contractor in charge provides clients with a close-out package combining all signed permits, drawings, product specifications, maintenance instructions, and more. “They’re entitled to it in the same way that car owners get an owner’s manual,” Ortiz says.