It's rare for homeowners to require major repairs or remodeling to prep a property for sale, but there are exceptions. For example, you might need to replace a leaky roof, overhaul a flawed electrical system or remodel an antiquated kitchen that's not up to neighborhood standards.
Unfortunately, there are many pitfalls on the road to finding solid and reputable contractors, according to Tom Philbin, author of "How to Hire a Home Improvement Contractor Without Getting Chiseled."
"When it comes to horror stories, the home improvement field can sometimes make you think you're reading Stephen King," Philbin says.
Though a professional writer rather than a contractor, Philbin thoroughly researched the field, and his book documents many tales of woe involving homeowners who were cheated by contractors or suffered from shoddy workmanship.
"If your electrical work is bad, you risk burning the house down," he says.
Debbie Farson, who heads HomeWise Referrals, (www.homewisereferrals.com), which connects homeowners with qualified contractors, cautions that too much attention on price can yield unfortunate results.
"If you get three bids and one is vastly lower than the others, there could be something seriously wrong, and if you take that bid you might open yourself to problems. Maybe the contractor didn't realize the extent of the work involved in your project," she says.
Farson, a lawyer who meticulously prescreens the contractors in her network, says a small, family-owned firm can be just as qualified for major home improvements as a large company. But she insists experience counts tremendously.
"My rule of thumb is that the principal of the company should have been in the same business for at least five years," she says, adding that experience is especially crucial if your project involves major electrical, plumbing or HVAC work.
Farson urges homeowners to watch for red flags that could foreshadow problems. For instance, she says you should avoid any contractor who insists on payment in cash.
"That's a practice that could indicate a very shady contractor," she says.
Here are a few pointers for those who need major pre-sale work:
-- Make sure your contractors meet local government requirements.
Sid Davis, a seasoned real estate broker and author of "Home Makeovers That Sell," says not all home repairs or upgrades require government permits to ensure that the work complies with local codes. For example, your electrician likely won't need a permit to change a light fixture and your plumber won't need one to fix a leaky faucet.
But in many areas, larger-scale projects -- such as a kitchen overhaul or the installation of a new bathroom -- do require government oversight.
Maybe you think you'll get a lower price from a contractor who circumvents the need for government permits and inspections. But as Davis says, hiring a firm that skirts the law can be risky, especially if you're planning to sell.
"It could come back to haunt you if your contractor turns a blind eye to regulations. That's because the home inspector hired by your buyer could blow the whistle on the contractor and ruin your chance for the sale," Davis says.
-- Consider contractor referrals through your listing agent.
To help their clients, many long-time real estate agents maintain lengthy lists of contractors -- ranging from carpenters to roofers. Such a list can be a useful starting point for home sellers, says Eric Tyson, a personal finance expert and co-author of "House Selling for Dummies."
No matter who sends you a contractor's name, Tyson says you should always check references.
"Maybe the contractor's work has slipped since the last time your agent worked with him. So you should always double-check," Tyson says.
-- Ask many questions before hiring a contractor.
According to Davis, a face-to-face meeting is an important element in the process of screening contractors.
"By meeting the contractor at your house, you can identify sloppy or disorganized companies before it's too late," Davis says.
To make sure your project won't get squeezed out of a contractor's schedule by a larger job, he says you should always ask whether the company is overbooked. You also need to know who will perform the work.
"There's nothing wrong with an estimator coming out to give you a proposal that covers price and terms. But you still need to determine who will do the actual work and whether they're licensed for their trade," Davis says.
-- Get the contractor's promises in writing.
Davis says you should never count on verbal guarantees -- even from a contractor you've previously hired. As he says, there's no substitute for a written contract that provides details on all aspects of the job, including price, timing and scope.
"What if the contractor cheats on the current job or damages your house? Without a written agreement, you'll never recoup your losses in small-claims court," Davis says.
-- Ensure that deadlines are included in the contractor's proposal.
Those planning to put a home up for sale in the near term can't afford delays in necessary home improvement or repair work. That's why Davis says it's very important to have deadlines built in to any agreement you sign.
"There should be real penalties should the contractor fail to perform on time. When selling, the last thing you want are delays," Davis says.
You should also make sure the agreement guarantees that the contracting company carries insurance and that all its employees and subcontractors are covered.
-- Refuse to pay for the entire project at the outset.
In some cases, it can be perfectly legitimate for a contractor to ask for a partial payment at the front end -- especially if substantial material costs are involved.
On a roofing job, for example, you might be asked for a down payment to help pay for the cost of shingles. And a painter might request that you pay in advance for the cost of paint and rollers.
But Philbin warns against paying for the full cost of any job -- including all the labor -- before it's complete. As he says, if you advance the whole cost at the outset, you'll lose all the leverage you'll need should the contractor default.
"Good contractors have good credit lines. So you should never pay more than 10 to 15 percent up front. Remember that if you lose control of the money, you lose control of the job," Philbin says.
(To contact Ellen James Martin, email her at email@example.com.)