What Questions Should You Ask Before Hiring a Contractor?

Jan 9, 2027 · By Oanh Nguyen · Broker & Loan Officer · Investing

A renovation is only as good as the contractor who does it. The right contractor can keep your project on budget and on schedule, with work that passes inspection and holds up for years. The wrong one can cost you time, money and peace of mind.

For investors, the stakes are high. Every week of delay adds holding costs. Every unplanned change order eats into your returns. And poor work can show up later as repairs, disclosure issues or problems with tenants.

The best protection is asking good questions before you sign anything. In this post, I'll share a contractor-vetting list built around scope, licensing, insurance, references, bids, schedule, payment terms and change orders.

This is general information, not legal advice. For contract questions, talk with a real estate or construction attorney. The Contractors State License Board (CSLB) publishes consumer guidance on hiring contractors and home improvement contracts.

Start With a Clear Scope

Before you call contractors, write down what you want done.

A good scope of work includes:

• Each task, room by room or system by system.
• Materials and finish levels, like cabinet type, countertop material and fixture grade.
• Who supplies materials: you or the contractor.
• Permits you expect to need.
• What's excluded.
• Your target timeline.

When every contractor bids the same scope, you can compare bids fairly. My post on evaluating a fixer-upper renovation budget explains how to build a scope.

Questions About Licensing

In California, contractors generally must be licensed by the CSLB for jobs above a certain value, and licenses are issued for specific classifications.

Ask:

1. What is your CSLB license number?
2. What classification is your license? Does it cover this type of work?
3. Is the license active and in good standing?
4. Will any subcontractors work on the job, and are they licensed?

Then verify using the CSLB's online license lookup. It shows the license status, classifications and bond and workers' compensation information on file.

Red flag: a contractor who won't give a license number, or asks you to pull permits as an owner-builder for work they're doing. The CSLB explains the risks of acting as an owner-builder.

Questions About Insurance

Ask:

5. Do you carry general liability insurance? Can I see a certificate?
6. Do you have employees, and do you carry workers' compensation insurance?
7. Will you name me as an additional insured, if appropriate?

Why it matters: if a worker is injured or property is damaged, insurance can make a big difference in who pays. Also ask your own insurance agent how your policy applies during a renovation.

Questions About Experience and References

Ask:

8. How long have you been doing this type of work?
9. Have you worked on similar projects? Can I see photos?
10. Can you give me references from recent clients with similar projects?
11. Have you worked on rental or investment properties? Investors often have different priorities, like durability and speed.
12. Have you worked with this city's building department?

When you call references, ask:

• Was the project finished on time and on budget?
• How were changes and problems handled?
• Was the site kept clean and safe?
• Would you hire them again?

Questions About the Bid

Ask:

13. Is this bid based on my written scope?
14. What's included and what's excluded?
15. Are there allowances for items like tile, fixtures or appliances? How much?
16. Does the bid include permits, plans, dumpsters and cleanup?
17. How long is the bid valid?
18. What could make the final cost higher?

Compare at least two or three bids line by line. A much lower bid may be missing items, using lower allowances or underestimating the work.

Questions About the Schedule

Ask:

19. When can you start?
20. How long will the project take?
21. Who will be on site each day, and who's my main contact?
22. What could cause delays, like permits, inspections or material lead times?
23. How will you keep me updated?

For investors, time is money. Every extra month adds holding costs like loan payments, taxes, insurance and utilities.

Questions About Payment Terms

Ask:

24. What's the payment schedule?
25. Are payments tied to completed work or milestones?
26. What's the down payment? California has rules limiting down payments on many home improvement contracts. The CSLB explains them.
27. How will you handle lien releases from subcontractors and suppliers?

Tips:

• Don't pay far ahead of the work completed.
• Keep records of every payment.
• Ask for lien releases as payments are made. Subcontractors and suppliers who aren't paid may have lien rights on your property. The CSLB has information on mechanics liens.
• Avoid cash-only arrangements.

Questions About Change Orders

Change orders are one of the biggest sources of budget overruns.

Ask:

28. How do you handle change orders?
29. Will every change be in writing, with the price and schedule impact, before work begins?
30. How do you price changes?
31. What happens if you find hidden problems, like rot or old wiring?

Tip: Agree in writing that no change will be made or billed without your signed approval.

Questions About Permits and Inspections

Ask:

32. Who will pull the permits? Usually the licensed contractor should.
33. Who will schedule and attend inspections?
34. Will you provide copies of finaled permits at the end?

Finaled permits protect you when you rent, refinance or sell. My post on verifying permits and property records explains why.

Questions About Warranty and Completion

Ask:

35. What warranty do you provide on labor and materials?
36. How do you handle a punch list at the end?
37. What does "complete" mean in the contract?
38. Will you provide manuals and warranties for installed equipment?

Extra Questions for Rental Properties

Renovating a rental has its own needs. Add these questions when the property is, or will be, a rental:

• Have you worked in occupied units? If tenants live there, the contractor needs to respect notice requirements, schedules and privacy. California Civil Code section 1954 covers landlord entry, and you'll give the notices.
• Can you recommend durable materials that hold up to tenant turnover?
• Can you work in phases so some units stay rented?
• How quickly can you handle turnover repairs between tenants?
• Will you keep work areas safe for tenants and neighbors?

After You Hire: Managing the Job

Hiring the right contractor is the first step. Staying involved keeps the project on track.

1. Hold a kickoff meeting to confirm scope, schedule, payment milestones and communication.
2. Agree on regular updates, like a weekly call or written summary with photos.
3. Visit the site at key stages, such as after demolition and before walls are closed.
4. Track payments and lien releases in a simple log.
5. Keep every change order signed and filed.
6. Collect finaled permits, warranties and manuals at the end.
7. Walk the job with a punch list before the final payment.

Good records also help your CPA at tax time and help you answer questions when you sell.

Get It in Writing

A clear written contract protects both you and the contractor. It should generally include:

• The contractor's name, address and license number.
• The scope of work and materials.
• The total price and payment schedule.
• Start and completion dates.
• How change orders are handled.
• Permits and inspections.
• Warranty terms.
• Required notices under California law.

Read the whole contract before signing. For anything unclear, ask the contractor or talk with an attorney.

Red Flags

• No license number, or a license that doesn't match the work.
• Pressure to sign quickly or pay a large amount up front.
• Requests for cash only.
• No written contract.
• Reluctance to pull permits.
• A bid far below the others without explanation.
• Poor communication before the job even starts.

Contractor Vetting Checklist

• ☐ Written scope of work prepared.
• ☐ License number verified on the CSLB website.
• ☐ License classification matches the work.
• ☐ Insurance certificates received.
• ☐ Workers' compensation status checked.
• ☐ References called.
• ☐ Two or three bids compared line by line.
• ☐ Payment schedule tied to completed work.
• ☐ Change order process in writing.
• ☐ Permit responsibility in writing.
• ☐ Warranty terms in writing.
• ☐ Full contract reviewed before signing.

Key Takeaways

• Start with a written scope so bids are comparable.
• Verify the license, classification and insurance.
• Call references and look at similar work.
• Tie payments to completed work and collect lien releases.
• Put every change order in writing before work starts.

A Hypothetical Example

This example is made up to show the process. It is not based on any real property, contractor or client.

An investor needs a kitchen and bathroom renovation on a rental. They write a scope with finish levels and send it to three contractors. One bid is much lower. When asked, that contractor explains it excludes permits and uses low allowances for tile and fixtures.

The investor verifies the licenses of the other two on the CSLB website, checks insurance certificates and calls references. They choose the contractor with clear communication and a payment schedule tied to milestones. During demolition, the contractor finds water damage under the bathroom floor. They provide a written change order with the cost and schedule impact. The investor approves it, and the project finishes with finaled permits.

Frequently Asked Questions

How I Can Help

I help investors review scopes, compare bids line by line and think through how the schedule and change orders affect the project's numbers. I'll always point you to the CSLB to verify any contractor you're considering.

The Bottom Line

Asking the right questions before you hire a contractor protects your budget, your schedule and your property. Start with a clear scope, verify licensing and insurance, check references, compare bids, tie payments to completed work and put every change in writing.

Comparing contractor bids? Let's review them together.

Sources

• Contractors State License Board, Hire a Contractor: https://www.cslb.ca.gov/Consumers/Hire_A_Contractor/
• Contractors State License Board, Check a License: https://www.cslb.ca.gov/OnlineServices/CheckLicenseII/CheckLicense.aspx
• Contractors State License Board, Learn About Home Improvement Contracts: https://www.cslb.ca.gov/Consumers/Hire_A_Contractor/Home_Improvement_Contracts/
• Contractors State License Board, Owner-Builder Risks: https://www.cslb.ca.gov/Consumers/Know_Risks_Of_Owner_-_Builder/
• City of San José, About Building Permits: https://www.sanjoseca.gov/businesses/development-services-permit-center/about-building-permits
• California Civil Code §1954 (landlord entry and notice): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1954

Get help reviewing renovation bids. Call or text me at 408-780-1188, or email onrealtygroup@gmail.com.

Oanh Nguyen · Broker & Loan Officer · On Realty Group, brokered by LPT Realty · BRE #02133991 · NMLS 2020335

Equal Housing Opportunity.

Disclaimer: This post is general information only, not an appraisal or legal, tax or financial advice; data comes from the public sources linked above, is believed reliable but not guaranteed, and can change at any time.