How to choose a contractor you can trust

Hiring a contractor is one of the larger financial decisions most homeowners make, and it's done under time pressure — a leaking roof, a dead furnace, a deadline. The good news is that the vetting process is the same across every trade. Work through the steps below and you'll filter out the riskiest operators before money changes hands.

1. Confirm licensing for your state and trade

Licensing requirements vary by state and by trade — some states license general contractors, electricians, and HVAC techs but not roofers or siding crews. Look up your state's contractor licensing board (most have a free online lookup) and verify the license number the contractor gives you is active, in their name, and matches the work. An expired or borrowed license is a red flag, not a technicality.

2. Verify insurance — and get proof

Two coverages matter. General liability pays if the crew damages your home. Workers' compensation covers an injured worker — without it, an injury on your property can become your liability. Ask for a certificate of insurance and, for larger jobs, ask to be listed as an additional insured. A legitimate contractor produces this without hesitation.

3. Check reviews and real references

Read reviews across more than one platform, and weigh how a contractor responds to negative ones — a calm, specific reply tells you more than a perfect 5.0. Then ask for three references from jobs in the last year, ideally similar in scope to yours, and actually call them. Ask: Did the final price match the bid? Did they finish on schedule? Would you hire them again?

4. Get at least three written bids

Three bids is the long-standing standard for a reason: one number tells you nothing, two gives you a coin flip, three reveals the real market range. Make sure every bid covers the same scope, materials, and warranty — otherwise you're comparing different jobs. The lowest bid isn't automatically best; a number far below the others often means something was left out, or will reappear later as a change order.

5. Read the bid like a contract

A complete written estimate should spell out:

• Scope of work — exactly what will and won't be done.
• Materials — brand, grade, model numbers, quantities.
• Total price and the payment schedule.
• Timeline — start date and expected completion.
• Warranty — separate labor (workmanship) from manufacturer material warranty.
• Who pulls permits — it should be the contractor, in their name.

If a contractor won't put the scope in writing, that's the answer. A handshake bid protects them, not you.

6. Understand normal deposit and payment terms

A deposit is normal — contractors need to buy materials and reserve crew time. What's not normal is paying for the whole job before it starts. Many states cap how much a contractor can collect upfront, and a deposit in the 10–33% range is typical for most residential projects. Tie remaining payments to completed milestones, and hold a final payment until the work passes inspection and you've confirmed it's done right.

Deposit norms — what's reasonable vs. a red flag

Scope	Typical range	What's included
Typical deposit	10% – 33% of total	Common, reasonable range for materials & scheduling on most projects
Watch closely	Over 50% upfront	Unusual; ask exactly what it covers before agreeing
Walk away	100% upfront	No legitimate contractor needs the full amount before starting

Source: Consumer Reports & NerdWallet contractor-hiring guidance, 2026

7. Pull permits — and don't let anyone skip them

Permits exist so an inspector verifies the work meets code. If a contractor suggests skipping the permit to save time or money, walk away: unpermitted work can fail a future home sale, void insurance claims, and force expensive rework. The contractor should pull the permit in their own name, which also keeps liability with them.

Red flags — when to walk away

• Door-to-door pressure after a storm. Legitimate contractors rarely need to chase work this way.
• Cash only, or a big discount for paying cash. It often means no license, no insurance, no paper trail.
• No written contract or refusal to itemize.
• "Sign today or the price goes up." Artificial urgency is a sales tactic, not a deadline.
• Asking for the full amount upfront or steering you to skip permits.
• No verifiable address, license, or local references.

Run any contractor through the seven steps above and you'll avoid the great majority of home-improvement horror stories. When you're ready to start, we'll match you with up to three pre-screened local pros so you've got real bids to compare.