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Tips in Choosing a Contractor … or Does a Contractor Choose You?

Here are some tips when looking for a contractor or thinking about doing home remodeling. Share your thoughts and comments here and share Patch with your friends on your favorite social media.

I was speaking with some contractors who contacted me about how they could get involved with the HUD 203k rehab loan program. I met some contractors this weekend at the Home Building and Remodeling Show at the Baltimore Convention Center this weekend and I learned something I need to share.

While everyone is looking for business these days, smart contractors (I have no way of knowing if they are GOOD contractors yet), but smart contractors are choosing their customers and the projects they want! Consumers were at the convention center looking around, listening to a sales pitch here and there and looking for information. Looking for a contractor? Not really.

Yet contractors WERE looking for customers and the smart ones were looking for the projects that work for them. I was also surprised that there were several contractors that were familiar with the FHA 203k rehab loan program, had worked with it successfully and actually wanted to do more of that business.

That FHA program works for both refinancing and for new purchases. It has a low 3.5% down payment requirement for purchases, a low interest rate of about 4.5% today, and provides for a HUD Consultant (like me) to help manage the process for you. If you think there might be an appraised value issue, there is an allowance for a 10% differential on the value versus the actual loan amount needed. You can actually borrow 110% of the appraised value if you need to. This will help you get out from under your current mortgage or perhaps make a new purchase work for you.

CHOOSING YOUR CONTRACTOR:

1. Ask for references (and actually call them)
You should be asking about their experience good and bad, what frustrated them the most, what the contractor did best for them, were they on time, on budget, did change orders and did they service after completion.
2. Ask where they have an active worksite – and go visit it
Just look around and see if it is clean, and organized. Were people smoking or drinking? No need to really intrude, just look around and jot down some notes of your impressions.
3. Did the contractor ask you good questions?
Did they listen to you? Were their proposals professional and clearly understandable? Were they on time for appointments? Did they return calls timely?

Some of the contractors I spoke with at the convention center welcomed the opportunity to work with a good rehab consultant as they felt it would help the homeowners get a better understanding of the process. They liked the idea that there was a process to get payments as the job progressed – even though they do NOT get any money upfront with a 203k loan.

So I learned that there are some contractors looking for good customers to work for and not just looking for work. That is a good thing. It doesn’t mean they are good contractors yet, but that is one sure way to separate a good one from the rest.

As a consultant, I help people plan their rehab project, write specifications, submit a bid package to multiple contractors and coach them on speaking with contractors whether they are paying for the project with FHA 203k financing, conventional financing, a line of credit or even cash. My goal is to save you at least what you are paying me for assistance. It is gratifying to me that I can honestly say that I can save most people at least some of what they are paying me to help them and I stay with the project until completion.

If you or someone you know was at the Convention Center, or is evaluating contractors, please comment with your feedback and visit http://203kServices.com for an extensive FAQ list to review.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Alisa Bralove-Scherr January 30, 2012 at 03:23 PM
You should also make sure they have a valid MHIC license. Call 410-230-6309 or visit http://www.dllr.state.md.us/license/mhic/ For more tips, see http://www.oag.state.md.us/Consumer/127.pdf
Janet Metzner January 30, 2012 at 03:26 PM
Thanks Alisa, for the information on finding out if your contractor has a valid MHIC license.
Vito Simone January 31, 2012 at 12:26 PM
Alisa, you are so correct. Using a licensed contractor is very important and does gives consumers recourse protection if they are not satisfied. It should have been part of my post rather than assumed. I will adress this issue in next weeks post.
Buck Harmon February 07, 2012 at 04:45 AM
The MHIC license is a huge public deception... there is not 1 question on the test that pertains to skills needed to perform home improvements. Every question on the test pertains to tax and contract law. Hiring a contractor with a MHIC license in no way assures the homeowner that they are getting skilled craftspeople.. An illusion that generates funding for the state. People with 0 experience can obtain this bogus license. The perceived recourse protection is limited to $15,000.00 and the average wait for a case is 18~ 24 months.... well after 1 year warranty requirements are up in most cases.
Buck Harmon February 07, 2012 at 04:50 AM
Check the contractors experience out , and for sure check references and a job site visit is great, but don't ever assume that because they are licensed they are skilled in any way. I have followed many MHIC licensed contractors thru the years, cleaning up some really poor work. Mainly senior citizens.
runymede March 18, 2013 at 01:39 PM
I have had contractors that have left me "hanging", meaning unfinished work. Usually the unfinished work is of a small nature that they won't come back because they are too busy working on their latest and larger contract.
runymede March 18, 2013 at 01:50 PM
I agree. I have had contractors that left me "hanging", meaning unfinished work. The unfinished work is usually of a small nature and they won't come back because they are "too busy" currently working on a new larger job.
Jayden Eden December 04, 2013 at 10:12 PM
I was going to hire some building contractors in Edmonton. http://www.superiorbuildings.ca/ This will be helpful information. Thank you.

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