Smart Moves by Ellen James Martin

Contractors Without the Headaches

Home improvement is a $300 billion business in America. Yet many sellers do a lot of head scratching when they need to hire a plumber, electrician, painter, carpenter or roofer to get their property prepped for market.

"Most people don't know where to turn to find the right contractors to get their walls repainted or their leaky faucets fixed without paying too much or waiting too long," says Eric Tyson, co-author of "House Selling for Dummies."

Tyson says it's a rare house that doesn't need some level of help from contractors before it's put up for sale. Problems that should be addressed could include such relatively minor tasks as replacement of a non-functional doorbell or such complex ones as new roofing.

But getting a good contractor can often take time. He recalls that a four-day fence installation job in his backyard wound up taking six weeks because of the contractor's busy schedule.

He urges sellers to exercise caution when hiring contractors to do their pre-sale work. Here are a few tips on avoiding snags:

-- Ask for a list of contractor referrals from your listing agent.

Chances are the agent you engage to list your home will maintain a lengthy roster of reliable contractors. Included should be a range of service providers, from carpet installers to landscapers.

Such lists can be a valuable resource for home sellers.

"Granted, the contractors recommended by your agent aren't necessarily the cheapest guys in town. But they probably have proven track records and can likely get the work done within your deadline," Tyson says.

Contractors who work closely with real estate agents do so because agents represent a steady stream of repeat business. This gives the sellers who hire them more clout.

"What the contractor realizes is that if he does a terrible job, he could be removed from the agent's roster. Naturally this should help keep him in line," Tyson says.

-- Make sure any contractors you're considering have time for your job.

To avoid getting squeezed out of the contractor's schedule by larger jobs, Tyson says you'll also want to be sure any company you're considering isn't overbooked. You'll also want to know who exactly will be performing the work.

"You might be very impressed with the person who comes to the door the first time. Then you soon realize this was just a salesperson and that the people doing the actual work are not as capable. This can be extremely disappointing," Tyson says.

-- Communicate clearly with your contractors.

Stephen Carpenter-Israel, a real estate broker and president of an independent realty firm, recommends that home sellers have a serious, face-to-face conversation with any contractor they plan to hire.

To make sure your expectations are fully understood by the contractors, at your first meeting present them with an outline of the work, including any relevant details.

"This written statement can serve as an informal agreement that the contractor can sign and which establishes expectations in advance for jobs of a limited scope," Carpenter-Israel says.

-- Get all your contractor's promises in writing.

Tyson says that all too often homeowners make agreements with contractors based on verbal guarantees. There's no substitute for a written contract that covers all the key elements of the project, including price, timing and scope.

Because the prompt completion of work is essential to your success as a home seller, Tyson suggests you insist on financial consequences for a missed deadline.

"It's often prudent to include small incentives if the work is done on time or early and penalties if it's done late," he says.

You'll also want to incorporate into your agreement language indicating that the contracting firm guarantees its work and carries all the proper insurance coverage on its employees and subcontractors.

-- Don't allow contractors to cut corners on government inspections.

Obviously, not all home repairs or upgrades require your contractor to obtain a government permit and an inspection to ensure that the work complies with local codes. For instance, your electrician probably won't need government oversight to change light fixtures and your plumber likely won't require it to replace a broken water heater.

Major projects may be different, however. Examples could include the installation of a new bathroom or deck.

Perhaps you think you'll get a better price from a contractor who asks to circumvent government requirements. But Carpenter-Israel says that skirting the law can be risky, especially for those with plans to sell who could face legal problems later.

"Otherwise, you'll have no means of recourse," he says.

-- Refuse to cover the entire cost of the work from the outset.

Partial payments to a contractor are sometimes appropriate before work has begun, especially when significant material costs are involved.

For instance, you're likely to be asked to make a down payment on a carpet installation job. And your house painter might reasonably request that you cover the expenses for paint, rollers and brushes before work begins.

But Tyson says there is no justification for covering all labor costs on any home improvement project before the work is satisfactorily completed.

"It's a massive mistake to pay for the entire project at the start. If you do, you give away all your bargaining leverage should the contractors botch the work and need to do it all over again," he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)