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Before hiring a general contractor for a major renovation, addition, rebuild, or new home project, verify credentials and insurance, compare written bids based on the same scope, contact references for similar work, and review a detailed contract before you sign. Confirm the rules for the project address: licensing, permits, inspections, consumer protections, and lien procedures vary by state and locality.
Use the checks below to compare candidates and catch gaps while there is still time to ask questions or choose another contractor. This guidance is for U.S. projects; it is a practical checklist, not a substitute for local legal advice.
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What should you check before hiring a general contractor?
Start with facts you can verify independently, then evaluate how clearly each contractor has planned the work. A polished proposal or a referral is not a substitute for checking the contractor’s legal status, insurance, relevant experience, and written terms.
- Verify the contractor’s identity and credentials. Check the business and the individual you are dealing with through the appropriate state or local licensing or registration agency. Confirm the credential is current, belongs to the right business, and covers the type and value of work proposed if your jurisdiction uses classifications or limits. Check complaint or disciplinary records when the regulator makes them available.
- Verify insurance with the insurer or agent. Ask for evidence of general liability coverage and confirm directly with the issuing insurer or agent that it is active and suitable for the project. Check workers’ compensation status for employees and subcontractors as applicable. Rules differ: Washington, for example, says some owner-operators without employees do not need a workers’ compensation account, while California has trade-specific requirements. A certificate or verbal assurance alone may not answer whether coverage applies to your project.
- Ask about relevant work and references. Request recent references for projects similar in scale and complexity—not just a list of satisfied customers for unrelated work. Ask former clients about quality, communication, budget changes, schedule, cleanup, and how the contractor handled problems. FEMA suggests contacting three to five prior clients; that is agency guidance, not a universal legal requirement. California’s contractor board also advises asking for and calling references.
- Identify who will run the job. Ask who will be the day-to-day site lead, how often that person will be on site, who supervises subcontractors, and how you will receive updates and approve decisions. Make sure the person who negotiates the agreement is authorized to bind the licensed business.
- Compare written proposals on equal terms. Give each bidder the same plans, specifications, finish assumptions, and description of the work. Compare what is included and excluded, materials, allowances, fees, timing, warranty, and payment milestones—not only the total.
- Read the contract against the proposal. The signed agreement should match the accepted bid and incorporate the plans, specifications, and any allowances it relies on. Clarify missing details before signing; do not rely on a verbal promise to fill a gap later.
Washington State Department of Labor & Industries cautions that “Focusing only on price may get you a less than desirable result.” A lower total can reflect omitted work, cheaper assumed selections, or an allowance that leaves you paying more later. Treat unexplained differences as questions to resolve, not as proof that one bidder is automatically the better value.
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How do you verify a contractor’s license and insurance?
Use the regulator and insurer, not just documents supplied by the contractor, to confirm the facts that matter. Because the rules depend on location and project type, begin with the licensing authority and building department serving the project address.
- Match the business identity. Search the exact business name and, where applicable, the individual’s name. Check that the license or registration is current and corresponds to the entity named in the proposal and contract. Ask the contractor to explain any difference in names or status before proceeding.
- Check scope and limits. Where a jurisdiction uses trade classifications, project-value caps, or other restrictions, confirm that the credential covers the work being proposed. Do not assume that a credential for one kind of work authorizes every trade on a large project.
- Look for public records. Review regulator complaint or disciplinary information where available. An online review can provide additional context, but it does not replace an official record check or a direct conversation with a reference.
- Confirm coverage with the source. Request the insurer or agent’s contact information and ask whether the general liability policy is active and appropriate for the planned project. Ask how workers’ compensation applies to the contractor’s employees and subcontractors under local rules.
- Ask about bonding where appropriate. A bond is not the same thing as insurance. For a very large project, ask whether a performance bond or other security is suitable and available. Washington L&I suggests considering a performance bond for projects costing more than $6,000 under its state guidance; that figure is not a nationwide threshold or requirement.
Useful starting points include Washington L&I’s contractor hiring guidance, the California Contractors State License Board’s construction project checklist, and FEMA’s checklist to ask a general contractor. These are useful checklists, but the requirements they describe are not interchangeable across states.
How many bids should you get, and how should you compare them?
Get multiple written bids based on the same scope so you can compare assumptions and identify omissions. California’s contractor board recommends at least three bids, but the appropriate number is a comparison practice—not a universal legal minimum.
Before asking for proposals, gather the same drawings, specifications, material selections, and project requirements for every candidate. If some choices are undecided, ask each bidder to state the allowance and explain what it covers. A proposal that is detailed enough to compare is more useful than a bare total.
| Compare | Questions to resolve |
|---|---|
| Scope and exclusions | Which rooms, systems, demolition, site work, protection, cleanup, and debris removal are included? What work is explicitly excluded? |
| Materials and selections | Are products, brands, grades, and finish levels specified? Are any items owner-supplied, and who is responsible for delivery, damage, or installation? |
| Allowances | Which choices are not finalized? What amount is budgeted for each, and how are selections above or below that amount handled? |
| Price and fees | Are taxes, permit fees, disposal, and other stated costs included? Which costs can change, and what documentation supports an adjustment? |
| Schedule | What start and target completion dates are proposed? Are the project phases and dependencies clear, and how are delays or schedule changes handled? |
| Payments | What work triggers each installment? What documentation, completed phase, or inspection supports payment? |
| Subcontractors and suppliers | Which trades or major suppliers are expected? Who supervises them, and how are substitutions reviewed and approved? |
| Warranty and changes | What workmanship warranty is offered? How are changes priced, scheduled, documented, and approved? |
Ask each bidder to explain unusually large price differences, missing line items, or assumptions that do not match the project documents. If one contractor includes a particular material and another uses an allowance, the totals do not represent the same offer. Resolve the difference in writing before ranking the bids.
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What should you ask references about similar projects?
Call references directly and ask questions that reveal how the contractor managed the work, not just whether the client liked the finished result. A major project can involve months of coordination, decisions, disruption, and changes, so communication and problem-solving matter alongside workmanship.
- Was the completed work consistent with what the contractor had described and agreed to?
- Were budget changes explained and approved before the additional work proceeded?
- How closely did the project follow the expected schedule? If dates changed, how was the change communicated?
- Did the contractor keep the site reasonably orderly and protect the parts of the property not under construction?
- Who was the day-to-day contact, and could the client reach that person when a decision or problem arose?
- How did the contractor respond to mistakes, failed inspections, or other problems?
- Were subcontractors and suppliers coordinated effectively?
- Would the client hire the contractor again for a project of similar size?
Where practical, ask whether you can see completed work or a current job site. A visit can help you understand the type of work involved, but it does not replace a reference conversation or contract review. Give more weight to references whose projects resemble yours in scale, complexity, and type of work.
What should be in a general contractor’s contract?
The contract should be specific enough for both parties to administer the project: who is responsible, what work is included, what it costs, when payments are due, and how changes or disputes will be handled. Review it alongside the accepted bid and all plans and specifications it refers to.
- Parties and project: Include the legal names and addresses of the contracting parties, relevant license or registration information, contact details, authorized signers, and the job address.
- Scope and project documents: Describe the work in detail and identify the drawings and specifications that govern it. State materials and selections, exclusions, site protection, cleanup and debris removal, and any owner-supplied items. Make sure referenced documents are attached or otherwise clearly identified.
- Price and allowances: State the total price and explain taxes, permit fees, allowances, and how overages or changes to selections are calculated. Clarify what evidence supports any added charge.
- Payment schedule: Tie installments to defined, completed phases or other verifiable milestones. State what documentation or inspection supports each payment and how invoices and receipts will be handled.
- Schedule: Include a start date, target completion date, project phases, and a process for documenting schedule changes or delays. The agreement should make clear how the parties will communicate about a revised schedule.
- Subcontractors and suppliers: Identify the expected trades and major suppliers, or state how they will be identified. Spell out who supervises them and how proposed substitutions are approved.
- Permits and inspections: State who obtains each permit, who requests inspections, and how inspection results and corrections are handled. Confirm local requirements with the authority having jurisdiction; do not assume work may begin before permits are issued.
- Warranty: Put workmanship warranty terms in writing, including what is covered, exclusions, duration, how to submit a claim, and who performs repairs. Ask separately about manufacturer warranties on products.
- Changes: Require a written change order for each change. It should describe the revised work, price, and schedule effect and be approved by both parties before the changed work proceeds.
- Disputes and ending the agreement: Review dispute-resolution terms, any arbitration clause, termination rights, and attorney-fee provisions if included. Their effect depends on the contract and applicable law; for a major agreement, an independent construction attorney can explain the consequences.
- Required notices and cancellation rights: Check which consumer notices and cancellation rights apply to this project and transaction. Oregon and Michigan guidance describe particular rights in certain circumstances; those examples should not be treated as a national rule.
Do not sign a contract with blank spaces, unexplained checkboxes, missing attachments, or important verbal promises left out of the writing. If the bid, plans, and contract conflict, ask which document controls and have the correction made before signing. Keep the fully signed agreement and every document it incorporates.
For state-specific contract and consumer guidance, see the Oregon Construction Contractors Board’s consumer tools, Fairfax County’s contractor hiring guidance, and the Michigan Attorney General’s advice for homeowners. Check the rules that apply where the property is located rather than relying on another state’s forms.
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Who should obtain permits and arrange inspections?
Clarify the permit and inspection responsibilities in the contract, then confirm the requirements with the local building department. Ask who will apply for permits, schedule inspections, communicate with inspectors, and address any failed inspection or required correction.
Also ask whether any work is proposed before permits are issued. Confirm that the arrangement is allowed by the local authority; do not treat a contractor’s preference as proof that a permit is unnecessary. Required inspections may need to happen before work is covered, so establish how the contractor will coordinate them with the construction schedule.
For a large project, do not leave responsibility ambiguous between the contractor and homeowner. If the owner is expected to obtain a permit or make a submission, ask why, what exactly is required, and whether that division of responsibility complies with local rules. Keep copies of permits, inspection records, and correction notices with the rest of the project documents.
How can you protect payments and reduce lien risk?
Do not pay the full contract price in advance. Agree on a reasonable initial payment and installments tied to completed work or defined phases, and make payments traceable. A calendar date by itself is a weaker payment trigger than a clearly described milestone that can be checked.
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Before paying an installment, confirm what work has been completed and whether the contract requires supporting documents or an inspection. Avoid advances that materially exceed completed work unless a specific materials purchase or other arrangement is documented and appropriately protected. Keep receipts and records of every payment.
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Subcontractors and suppliers may have rights to make lien claims in some jurisdictions if they are not paid, even when the owner has paid the general contractor. Ask for a list of trades and major suppliers, learn whether local preliminary notice rules apply, and obtain appropriately timed lien releases, waivers, or other proof of payment before final payment. The exact document names, timing, and legal effect vary by location, so do not rely on a generic form from another state. Ask the local regulator or a construction attorney what documentation is suitable for your project.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What warning signs should make you pause?
A single concern does not establish fraud, but pressure or evasiveness deserves follow-up—especially when several warning signs appear together. Pause before signing or paying if a contractor:
- Pressures you to sign immediately or offers an unusual discount only if you agree that day.
- Requests cash, untraceable payments, or a very large upfront payment without a clear, documented reason.
- Cannot provide credentials, insurance information, or references that you can verify.
- Refuses to provide a detailed written bid or contract.
- Asks you to handle permits without explaining why and how that arrangement complies with local requirements.
- Leaves major exclusions, allowances, payment triggers, or change-order terms unclear.
Ask for an explanation and supporting documents, check with the relevant regulator, and compare another proposal if the concern remains. Do not let urgency replace the checks you need to make an informed commitment.
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Compare the contractors on evidence and clarity rather than choosing solely by the lowest total. A practical side-by-side review should cover verified credentials and relevant experience, current insurance and any appropriate bond, complete scope, transparent pricing and allowances, realistic schedule, named supervision, reference quality, warranty and change process, permit responsibilities, and payment and lien safeguards.
Before you commit, make sure the chosen proposal and contract agree; all material selections, exclusions, allowances, responsibilities, and milestones are understandable; and the people and companies involved can be checked. For a large or complex project, consider having an independent construction attorney review the agreement and, where appropriate, consulting an architect or owner’s representative. Keep a complete record in a paper file or digital folder: bids, plans, specifications, insurance evidence, permits, receipts, correspondence, inspection records, and signed change orders. Public agencies also provide free checklists and worksheets, so buying a project planner is not necessary to keep those records organized.
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Frequently Asked Questions
Should I hire an architect or owner’s representative for a large project?
It may be useful when the scope is technically complex, the plans need independent review, or you want someone other than the contractor to help monitor decisions and project administration. The right role depends on the project and local requirements; agree in writing on that person’s responsibilities and how they coordinate with the contractor.
What if the contractor says a permit is not needed?
Ask the local building department serving the property to confirm whether the planned work requires a permit. Permit rules can depend on the work and location, so a contractor’s statement should not be the only basis for proceeding.
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Can a contractor use subcontractors without telling me?
Your contract should identify expected trades or explain how subcontractors will be disclosed, supervised, and approved. If subcontractors are part of the plan, ask how you will be notified of changes and how the contractor verifies that they are properly covered and paid.
What records should I keep during construction?
Keep the signed contract and attachments, plans, permits, inspection records, invoices, receipts, insurance evidence, messages about decisions, and every signed change order. A dated record makes it easier to check what was approved, paid for, or changed if a question arises later.
