With the National Association of Realtors' reporting current pending home sales down 21.4 percent from the first quarter of 2007, and Standard & Poor's citing the steepest decline in home values in the 20-year history of its housing index, many homeowners are now choosing to remodel their current home rather than selling in an effort to hold home values in the turbulent U.S. housing market. To execute the strategy successfully, most projects require professional help and Better Business Bureau (BBB) is offering advice and guidance on finding trustworthy contractors who can help make the strategy pay off.
According to the Home Improvement Research Institute (HIRI), homeowners spent $306.7 billion on remodeling projects in 2007. Despite substantial declines in other U.S. housing market indicators, HIRI expects only a modest decline in home improvement spending in 2008, and estimates the amount of money spent by homeowners will exceed $302 billion.
Many homeowners feel that finding a trustworthy contractor is a difficult task. According to the recently released BBB/Gallup Trust in Business Survey, 73 percent of respondents indicated that they didn't have a great deal or a lot of trust in contractors.
"Homeowners often don't know where to begin looking for reliable help for home improvement projects, but finding a trustworthy contractor doesn't have to be a difficult task," said Kathleen Calligan, President & CEO of the Better Business Bureau. "While asking friends and family for references is advised, homeowners can start their research easily and quickly online with free BBB Reliability Reports that provide an unbiased assessment on many types of contractors operating in their community."
For homeowners looking to make renovations, BBB offers the following advice on how to choose a contractor they can trust:
Start with trust Most homeowners have heard of, and in some cases experienced, shady contractors that ask for payment up front, perform shoddy work, and then refuse refunds or redress of issues. BBB encourages homeowners to do their homework - starting online at www.bbb.org where they can search BBB's online directory for BBB-accredited contractors and remodeling businesses in their area.
Get references BBB recommends homeowners ask all contractors for local references and then take the next step by finding out if those customers were satisfied with the contractor's work. If possible, homeowners should visit and inspect completed projects.
Ask the experts BBB advises that homeowners find out if a contractor is a member of a professional association which has standards or a code of ethics. All BBB Accredited Businesses have agreed to uphold BBB standards for ethics in the marketplace. Homeowners can also check with BBB to learn how long a contractor has been in business and if the firm has been responsive to any complaints filed with BBB.
Compare costs Homeowners should solicit at least three bids from prospective contractors based upon the same building specifications, materials, labor and time needed to complete the project. Homeowners need to discuss bids in detail with each contractor, making certain they understand the reasons for any variations in the prices and not automatically making a decision based on lowest price. Cost differences may include issues such as quality of materials, craftsmanship and subcontracting for specialized labor.
Check on insurance BBB reminds homeowners to ask contractors if the company is insured against claims covering worker's compensation, property damage and personal liability in case of accidents. Further, BBB advises people to then call to verify the contractor's insurance coverage after obtaining the name of the carrier and agency.
Are they bonded/licensed? Contractors must typically meet licensing and bonding requirements set by the state, county or city housing authority. Homeowners should confirm the contractor meets all requirements and can legally operate in the state.
Given the tough housing market, it's important that homeowners make smart, informed decision affecting their most valuable investment - their homes. For advice they can trust on finding reliable professionals to help with home improvement and remodeling projects, homeowners can turn to www.bbb.org.