Many people upgrade to a new home when they get tired of their old digs. But it often makes more sense to stay put and think about doing some projects to improve the home you're in, such as sprucing up your kitchen or adding some built-in bookcases.

Dreaming up the job is easy. Hiring someone to do it is another thing.

Of course, you'd never hire a contractor who refuses to offer references, who's not listed with the local Better Business Bureau, or whose hard-sell tactics make you uneasy. But there are other signs that a contractor may not be up to snuff, according to the National Association of the Remodeling Industry (NARI). Alarm bells should start sounding if:

  • You cannot verify the name, address, telephone number, or credentials (including license and insurance information) of the remodeler.
  • The salesperson tries to pressure you into signing a contract.
  • The information you receive is out of date.
  • You're asked to pay for the entire job in advance, or to pay in cash to a salesperson, instead of by check or money order to the company itself.
  • The contractor does not notify you of your right to cancel the contract within three days. Law requires notification in writing of your "Right of Rescission." According to NARI, this grace period "allows you to change your mind and declare the contract null and void without penalty (if the agreement was solicited at some place other than the contractor's place of business or appropriate trade premises -- in your home, for instance)."

Sorry to drone on, but when it comes to your money, doing your homework is a must. One of the easiest things you can do is call a contractor's references. In addition to getting input from previous customers and business associates, NARI suggests that you ask the following questions when conducting an interview:

  • How long have you been in business?
  • Who will be assigned as project supervisor for the job? How accessible will that person be?
  • Are the other people working on the job employees or subcontractors?
  • What is your approach to a project such as this?
  • How many projects like mine have you completed in the past year? (Get a list of references.)
  • May I have a list of business referrals or suppliers?
  • What percentage of your business is repeat or referral business?
  • Are you a member of a national trade association?
  • Does your company carry workers' compensation and liability insurance? (Don't simply accept the paper certificate. Verify that it is up to date by calling the insurance agency.)
  • If licensing is required in your state, ask whether the contractor is licensed, and call to verify compliance with the law. Not all states offer or require licensing, though, so check with local or state government agencies.

Remember, you're going to be living with this crew and its drywall dust for quite a while. So don't be shy about getting answers to all of your questions.