We are just getting ready to interview for a builder of our retirement home in Prescott.  What are some of the most important questions we should ask?

Joe and Diane, Williamson Valley, Prescott

Especially now, with the economy, our industry is faced with unprecedented growth of would-be contractors.  People who have worked as a laborer or a framer have decided they want to start their own business and bring home more bucks.  In spite of the fact they lack sufficient capital and experience; they print up flyers, distribute business cards and place ads in the yellow pages and the newspapers.  In an attempt to get the best price, you, the unsuspecting citizens call these numbers and ask for a bid.   Now the problem starts.  Often times, the phone number is just an answering machine.  You ask for a bid, you are pleased with the price.  The contractor tells you he needs a large portion of money upfront.  He says he needs to purchase materials or to pay workers.  They may even tell you they have a sick child.  RED FLAG!  At first things may seem fine, in a day or two the workers show up, a small amount of material is delivered, or a piece of equipment is on site.  Now the excuses begin.  You call and call.  Then he calls and is very apologetic and tells you about his truck breaking down or he was tied up on another job.  He promises to get on your job right way.  A week later he still has not returned, he has your money.  Does this sound ridiculous?  Well it happens everyday with you, the consumer losing thousands of dollars.  The majority of licensed contractors are competent, honest, hardworking and responsible.  This industry, due to complaints from homeowners (some valid and many not valid) is a top source of consumer issues, nationwide, not just applicable to Prescott.  YCCA is always operating to be proactive against unlicensed contractors, addressing issues with unscrupulous contractors and we are making sure our community and citizens are safe and well protected against the bad guys and we are proud of our membership and contractors.  We do not want you to experience a bad home building event so we recommend following these points.  Always make sure you used a licensed contractor.  Keep in mind, that anyone can say they are licensed – MAKE THE CONTRACTOR PROVE IT!  Ask for a copy of their State License, call YCCA and we can verify and confirm.  This is protection for you.  Make sure you know what the expiration date is of their license.  In Arizona, they must be renewed every 2 years.  Do not start a major project with one month remaining on the license because they may not renew and then their license is not in good standing, and you are not protected.  Contractors without licenses do not have them for a reason and this is a huge red flag.  If you would like to learn more about why you should use a licensed contractor, give me a call.  Make sure the contractor has general liability insurance and workers compensation insurance.  These types of insurance protect you and your home from damage or negligence of the contractor, his employees and subs.  Also, again, keep in mind, anyone can say they are insured, MAKE THE CONTRACTOR PROVE IT!  If your contractor does not have insurance and something goes wrong, you have three choices – you can pay for the damages and repairs out of your pocket, go can go after the contractor for the costs and damages, which mean suing.  Keep in mind, if the contractor cannot afford to carry insurance, what are the chances he has any money to pay you from a judgment.  The third item is, that you might have to file against your homeowners insurance and there is no guarantee they will pay for the damage.  A red flag is that contractors that do not carry insurance are more than likely avoiding other rules.  These same risks are involved if the contractor doe snot carry workers compensation.  You are at risk and you will be liable for any injuries suffered by the contractor or his employees on your property.  If the contractor is a one-man operation, he can be exempt.  Ask to see his exemption.  This is risky, if the contractor shows up with a help and the helper is injured and there is no workers compensation because he is exempt, you will be liable for the medial bills.  It is always safer to deal with a fully insured contractor.  This is a great risk to hire a contractor without workers compensation.  You can be held responsible by law for their medical treatment.  Ask for references in writing.  A good responsible contractor will be happy to provide references.  Call the references, ask what the contractor could have improved upon, asked how well he met his promises.  Ask if they would hire him again.  Ask your contractor if he will provide you with written lien waivers.  A lien waiver is a legal document which says you have paid the contractor in full for the services rendered by contract and the contractor waives his right to place a mechanics lien on your property.  A good general contractor will also provide you with lien releases from any subcontractors that do work on your project.  This protects you in case the contractor does not pay the subcontractors after you have paid the contractor in full.  Without a lien release from the subcontractor you will be liable for paying them.  This amounts to you paying twice for the services!    It is also important to make sure that the contractor himself or one of their high-level foreman/lead carpenters are on your job daily.  There are contractors that are salesmen only and once they have established a level of trust, your job can be turned over to someone who does not have your same high standards.  Make sure your contractor pulls all of the applicable building permits; this is your assurance that your home will be built to code and will have the applicable inspections, which protects you.  If a contractor asks you to pull the building permit this is a RED FLAG, possibly because they are not licensed and possibly because they are having financial issues.  Ask your contractor what professional organizations they are a part of.  If they are not a member of an organization, this is not a risk. Most contractors that are part of an organization are conscientious and interested in bettering the industry.  And the organization is conscientious and interested in educating the consumers and protecting the consumers.  Make sure you understand the terms of the contract before signing and turning over any money.  Make sure change orders are in writing, so not agree to them verbally.  Be cautious of advancing monies for work not yet completed or even started.  The cost of buying and owning a home is the biggest investment made by most of us in our lifetime.  Property owners and home builders often look for the lowest price when looking to build and/or remodel.  Since most unlicensed contractors are not bonded or insured, they can often under bid the licensed professional.