How to Find a Good Contractor (And What to Ask Before Hiring)

Homeowners lose billions of dollars annually to contractors who do poor work, abandon projects after receiving payment, or charge fraudulent prices that a more experienced buyer would never accept. First-time homeowners are the most vulnerable — they lack the baseline knowledge to evaluate whether a $4,000 furnace replacement quote is reasonable or inflated by $1,500.

There's no foolproof system, but there is a methodical vetting process that filters out most bad actors before they reach your checkbook.

Start with Referrals, Not Search Engines

The most reliable source for a contractor is a direct referral from someone whose judgment you trust — a neighbor who just had the same work done, a colleague who's used someone for years, or a local community group.

For trades-specific referrals:

• Nextdoor and local Facebook groups: "Who do you recommend for HVAC service?" posts in neighborhood groups consistently produce vetted referrals from people who've actually paid that contractor and seen the results.
• Your real estate agent or inspector: Agents and inspectors work with local contractors constantly and know who's reliable and who isn't.
• Your building supply store: Staff at local lumber yards and plumbing supply houses interact daily with the contractors who buy from them. They know who pays their bills and who doesn't — a reliable proxy for financial stability.

Avoid: Yelp-SEO-optimized listings from contractors who've never done work in your neighborhood, and any contractor who approaches you unsolicited (at your door, after a storm, or in a parking lot).

Verify Licensing

Every trade requires licensing, and licensing requirements vary by state, province, and jurisdiction. Unlicensed contractors expose you to liability, produce work that can't pass inspection, and give you no recourse when something goes wrong.

How to verify:

General contractors: Check your state contractor licensing board website. Search by the contractor's exact legal business name and verify that the license is current and active. Watch for contractors who try to split a single job into multiple smaller contracts — in states like North Carolina, a GC license is required for any project over $40,000, and licensing boards calculate the total project value, not individual invoices.

Specialty trades (electrical, plumbing, HVAC, roofing): These require separate trade licenses regardless of project cost. An unlicensed electrician doing panel work isn't just illegal — it can void your homeowner's insurance if a fire results from the work. Verify the trade license number directly with the state licensing board.

In Canada: Licensing requirements vary by province. In Ontario, HVAC and plumbing trades require licensed contractor status. In BC, electrical work requires a licensed electrician. Verify at each province's relevant regulatory body.

In the UK: Gas work requires a Gas Safe registered engineer — check the Gas Safe Register directly at gassaferegister.co.uk. Electrical work under Part P building regulations requires a certified contractor registered with a competent person scheme (NICEIC, NAPIT, or similar).

In Australia: State-specific contractor licensing applies. In NSW, a contractor licence from Fair Trading is required for most trade work over $5,000. Verify at the relevant state licensing authority.

Verify Insurance (Request a Certificate of Conduct Directly)

Never accept a printed or photographed copy of an insurance certificate. These can be forged, expired, or from canceled policies.

Ask the contractor to have their insurance broker email you a Certificate of Insurance (COI) directly. The email comes from the insurance company or broker — not from the contractor — which confirms the policy is active and current.

You need to verify two things:

General liability insurance: Covers damage the contractor causes to your property. If they crack your foundation while digging, if they damage a neighboring property, if they cause water damage — this insurance pays. Without it, you're paying.

Workers' compensation insurance: Covers injuries to workers on your property. If a roofer falls off your roof and the contractor doesn't carry workers' comp, you can be held personally liable for medical costs and lost wages. This is not theoretical — homeowners face this liability regularly.

Confirm both policies are active at the time of hiring, not just at the time the COI was issued.

Search Court Records

Search the county's online court records for civil lawsuits, unsatisfied judgments, and mechanic's liens filed against the contractor or their business name.

Why mechanic's liens matter: When a contractor takes your money but doesn't pay their subcontractors or material suppliers, those subs and suppliers can file a lien against your property to recover their losses — even though you already paid the contractor in full. A pattern of mechanic's liens filed against a contractor is a red flag that they routinely take money without paying downstream.

Most county clerk of court websites have searchable records. Search both the business name and the owner's personal name if known.

Check Business Registration Age and Status

Search the Secretary of State's business entity database using the contractor's exact legal name. Verify the company is "Current" or "Active" status.

Be cautious of:

• LLCs formed very recently (less than 2 to 3 years ago) — some contractors dissolve companies after disputes and reform under a new name to escape their record
• Companies with a status of "administratively dissolved" or "revoked"
• Businesses where you can't find any registration at all — they may be operating unlicensed

A long-established business with an active registration and consistent address history is a meaningful positive indicator.

Questions to Ask Before Hiring

References: Ask for three references: two from jobs completed in the last 12 to 18 months, and one from a job completed 2 to 5 years ago (to see how the work has held up).

Questions to ask references:

• Did the job finish on time and on budget?
• How did the contractor handle unexpected problems or changes?
• Did the work pass all required inspections?
• Would you hire them again?

Any contractor who hesitates to provide references or who provides only two is telling you something.

Permits and inspections: Ask whether the job requires a building permit and who pulls it. A contractor who suggests skipping the permit is either unknowing (bad) or deliberately avoiding scrutiny (worse). Unpermitted work often fails to meet code, can prevent you from selling the home, and can void your homeowner's insurance for related claims.

Subcontractors: Ask who will actually do the work. Some contractors bid jobs and then subcontract everything to workers they've never worked with before. Know whether the person you're hiring is doing the work or managing someone else who is.

Red Flags in Estimates and Contracts

Large upfront deposits: A legitimate contractor typically requests a modest booking deposit (10 to 25%) or the cost of non-returnable custom materials. Any contractor demanding 50% or more upfront is a risk. Payment should flow as work is completed.

Vague or unitemized estimates: A legitimate estimate specifies exactly what materials will be used, by brand and specification where relevant, along with the scope of each task. "Furnace installation — $4,200" tells you nothing. You need to know the furnace make and model, what's included in installation (permits? haul-away? thermostat replacement?), and the labor rate.

Pressure to decide immediately: Legitimate contractors have full schedules and can give you time to review an estimate and check references. High-pressure urgency ("I can only give you this price today") is a negotiating tactic, not a genuine constraint.

Cash-only payments: Cash payments prevent you from disputing charges and eliminate the paper trail you need if the work is defective.

The First-Year Homeowner Maintenance Calendar includes a contractor vetting checklist with space to record license numbers, insurance verification status, reference contact information, and key contract terms. When you're managing multiple trades across a year of maintenance, having a consistent record for each hire protects you and makes it easy to return to contractors whose work you trust.