Hiring the wrong contractor can add thousands of dollars to the cost of your home improvement project. These tips will help you hire like a pro.

Before you start
If you'll need to borrow to pay for a project, check with your bank or a reputable lender ahead of time. Financing offered by a contractor may have less favorable terms.

Check with your local building department in advance to see if your project will require permits. The building department can also tell you if contractors need to be licensed or registered to perform work in your city.

How to find a contractor

• Referral sites are often glorified advertising. Many sites that offer to connect consumers with home improvements professionals list any contractor who pays for a listing. These sites may do little to vet the contractors they list or to assist homeowners who run into trouble. View these contractor and handyman referral sites with the same skepticism you would reserve for ads. They are not indicators of quality.
• Ask friends and family for recommendations. Word of mouth referrals are often the best. Some neighborhood social media groups may have lists of contractors used and recommended by neighbors.

Get quotes and vet contractors

• Get written estimates for your project from several contractors. Estimates should include details about work performed and products used. If estimates vary greatly, call the contractors back to confirm details or ask why. A large price gap could indicate differences in materials or in the scope of work. You won't know until you ask.
• Check out how a contractor treated other customers. Look at consumer complaints at the Better Business Bureau or review sites like yelp.com, both to spot issues with work and the company's response to criticism.
• Once you settle on a company, ask the contractor for multiple references and check them. Some questions to ask:
  • Did the contractor start and complete the job on time?
  • Were the crews polite?
  • Was the job site kept neat?
  • Did the price stay the same (or close) to the estimate?
  • Were there any problems with the job? How were they handled?
  • How satisfied are you with the work?
  • Would you hire the contractor again?

Review the contract before you sign

Carefully look over the contract before you sign to make sure it:

• Contains your name and address, the contractor's name and address, a start and end date for the work, and a complete description of the work to be done.
• Requires the contractor to pull any permits required in the contractor's name, not yours.
• Requires your written approval for any changes made after work begins. Change orders should detail the work involved and clearly state the cost.
• Contains both itemized costs for the work and the total cost of the project. If you can't arrange payment in full at the end of the job, structure payments so that the bulk of the money is paid when the job is completed.
• Clearly explains any contractor guarantee or warranty.
• Includes all of the contractor’s oral promises.
• Doesn't require you to pay attorney's fees, court costs or damages in case of a dispute. Be wary of arbitration clauses, which can prohibit you from getting a fair hearing if there is a dispute.