How to Vet a Contractor: The Complete Homeowner's Guide

Hiring the wrong contractor can turn your dream renovation into a nightmare. Unfinished work, disappearing contractors, shoddy craftsmanship, and cost overruns happen every day to homeowners who didn't properly vet their contractors.

Here's how to thoroughly vet contractors and protect your investment.

Why Vetting Matters

The Stakes Are High

Home renovation projects involve:

Significant financial investment ($10,000-$100,000+)
Your family's living space
Your home's structural integrity
Your property's value
Months of disruption

Choosing the wrong contractor can result in:

Financial loss from incomplete or poor work
Safety hazards from improper construction
Legal battles and liens on your property
Stress and family disruption
Lower home value

The Reality of the Industry

Contractor licensing varies by state. In many states, anyone can call themselves a contractor. The barrier to entry is low, which means:

Quality varies enormously
Fly-by-night operations exist
Even licensed contractors can be problematic
Your due diligence is essential

Step 1: Verify Basic Credentials

Licensing

Check if your contractor holds required licenses:

What to verify:

Valid contractor license (if required in your state/municipality)
License in good standing (no disciplinary actions)
License covers the work being performed
License number matches the person/company

How to verify:

State licensing board website
Local building department
Ask to see physical license
Call the licensing board directly

Indiana note: Indiana doesn't require a general contractor license statewide, but some municipalities have requirements. Specialty trades (electrical, plumbing, HVAC) typically require licenses.

Insurance

Proper insurance protects you from liability:

Required coverage:

General liability insurance (minimum $1 million)
Workers' compensation insurance (if they have employees)

How to verify:

Request certificate of insurance
Call the insurance company to confirm coverage
Verify policy is current and covers your project
Ask to be added as "additional insured" for larger projects

Why it matters: If an uninsured worker is injured on your property, you could be held liable. If damage occurs without insurance, you're stuck with the bill.

Business Registration

Legitimate businesses leave paper trails:

Check for:

Registered business entity (LLC, Corporation, etc.)
Physical business address (not just P.O. box)
Business phone number
Years in business

Red flags:

Can't provide business address
Only has a cell phone number
No online presence whatsoever
Vague about company structure

Step 2: Research Their History

Online Reviews

Look beyond the star rating:

Where to check:

Google Business Profile
Angi (formerly Angie's List)
Better Business Bureau
Houzz (for remodelers)
Facebook reviews

What to look for:

Volume of reviews (more is generally better)
Consistency over time
How they respond to negative reviews
Specific details in reviews
Recent review activity

Warning signs:

All reviews from the same time period
Only 5-star or 1-star reviews
Generic, vague praise
Defensive or argumentative responses to criticism

BBB and Complaints

The Better Business Bureau tracks complaints:

Check for:

BBB accreditation (optional but positive)
Complaint history
How complaints were resolved
Any patterns in complaints

Also search:

"[Company name] complaints"
"[Company name] lawsuit"
State attorney general consumer complaints

Court Records

For larger projects, deeper digging is warranted:

Public records to search:

Civil court records (lawsuits)
Liens filed by or against them
Bankruptcy filings
Criminal records (principals)

What matters:

Patterns of litigation
Mechanic's liens (indicates payment issues)
Recent serious legal troubles

Step 3: Get and Check References

Requesting References

Ask for:

3-5 recent references (within past year)
Projects similar to yours in scope and type
References in your area
Contact information (phone, not just email)

Be specific: "I'd like references for kitchen remodels completed in the last 12 months."

What to Ask References

About the project:

What work was done?
Was the original estimate accurate?
Were there change orders, and how were they handled?
Was the project completed on time?
Were you satisfied with the quality?

About the working relationship:

Was the contractor responsive to questions?
Were workers respectful of your home?
Did they clean up properly?
Were there any problems, and how were they resolved?

The key question: "Would you hire them again?"

Reading Between the Lines

Enthusiastic recommendations: "Absolutely! We loved working with them!" Lukewarm responses: "They got the job done." (Explore further) Warning signs: Long pauses, vague answers, redirections

Step 4: Interview the Contractor

The Initial Meeting

Use the first meeting to assess:

Professionalism:

Do they arrive on time?
Are they prepared with information?
Do they listen to your needs?
Do they answer questions clearly?

Knowledge:

Do they understand your project scope?
Can they explain their process?
Do they identify potential issues?
Do they make realistic suggestions?

Communication style:

Are they easy to reach?
Do they respond promptly?
Do they communicate clearly?
Do you feel comfortable with them?

Questions to Ask

About their business:

How long have you been in business?
How many projects like mine have you completed?
Who will be on my project (employees or subs)?
How do you handle permits and inspections?

About the project:

What's your approach to this project?
What might we encounter that could change the scope?
How long do you expect this to take?
How do you handle changes and additions?

About the process:

How do you prefer to communicate?
Who will be my main contact?
What's your payment structure?
What warranty do you offer?

Red Flags in Interviews

Watch for:

Pressure to sign immediately
Significantly lower price than others
Vague answers about details
Can't explain their process
Asks for large upfront payment
Discourages written contracts
Bad-mouths all competitors
Reluctant to provide references

Step 5: Compare Estimates

Getting Proper Estimates

Request detailed, written estimates from at least three contractors:

Estimates should include:

Itemized breakdown of costs
Materials specified (brand, type, quality)
Labor costs
Permit fees
Timeline with milestones
Payment schedule
Exclusions (what's NOT included)

Comparing Apples to Apples

Estimates may vary because:

Different quality materials specified
Different scope understood
Different experience levels
Different overhead costs

Ask clarifying questions to ensure you're comparing equivalent proposals.

The Price Warning

Too low: Concerning. They may:

Cut corners on materials
Use inexperienced labor
Have hidden costs coming
Not be able to finish

Too high: Not necessarily better. They may:

Be overqualified for your project
Have excessive overhead
Simply be overcharging

Middle ground: Often the sweet spot, but price alone shouldn't decide.

Step 6: Review the Contract

Essential Contract Elements

Never start work without a comprehensive written contract including:

Scope of work:

Detailed description of all work
Materials to be used (specific)
What's excluded

Timeline:

Start date
Milestone dates
Completion date
Consequences for delays

Payment terms:

Total price
Payment schedule tied to milestones
Deposit amount (10-30% is typical)
Final payment terms

Change order process:

How changes will be handled
Written approval requirement
Pricing for changes

Warranties:

Workmanship warranty period
Materials warranty coverage
Process for warranty claims

Permits and inspections:

Who obtains permits
Who schedules inspections
Code compliance responsibility

Contract Red Flags

Refuse to sign contracts that:

Require more than 30% upfront
Have vague scope descriptions
Don't specify materials
Waive your right to sue
Allow unlimited change orders
Don't include timeline

Building Ongoing Protection

During the Project

Even after thorough vetting, stay engaged:

Visit the site regularly
Document progress with photos
Address concerns immediately
Verify permits are pulled and posted
Ensure inspections occur
Don't pay ahead of work completed

After Completion

Get final lien waivers from all subcontractors and suppliers
Verify all permits are closed
Keep all documentation
Leave honest reviews
Note warranty periods

FAQ

How many contractors should I get estimates from?

At least three for any significant project. This gives you comparison points for pricing, approach, and professionalism.

Is it okay to ask to see their work in progress?

Yes, and a good contractor will encourage it. Visiting a current job site shows you their actual work quality and crew behavior.

What if they ask for cash payment?

Be cautious. Cash payments may indicate tax issues and leave you without paper trail. Always pay by check or card for documentation.

How much deposit is normal?

10-30% depending on project size and material costs. More than 50% upfront is a red flag. Never pay 100% before work starts.

What if my gut says no but everything checks out?

Trust your instincts. If something feels wrong, it probably is. There are plenty of contractors—keep looking.

Don't Have Time to Vet Contractors?

Thoroughly vetting contractors takes significant time and expertise. Vetted Crews handles this entire process for Indianapolis homeowners—so you can hire with confidence knowing every contractor has been thoroughly verified.

Learn more about how we protect your home investment.