Nobody budgets for the bad contractor. The kitchen sat gutted for four months. The deposit that left with a truck that never came back. The “final” invoice arrived 40% above the bid. Ask around your neighbourhood, and you’ll collect these stories fast, and almost every one of them traces back to a shortcut in the hiring process, not bad luck.

The fix is boring and it works: a checklist. Here are the 12 steps to Hire a General Contractor , in order, that separate homeowners who get the renovation they paid for from homeowners with a story. It takes about two weeks to run properly. Given what’s at stake, that’s cheap.

Key takeaways

• General contractors mark up 20 to 33% on average, and remodels can reach 40 to 50%. A visible markup is a good sign (Angi, 2026).
• The industry needs 349,000 new workers in 2026, so good crews are scarce and worth waiting for (ABC, 2026).
• Three itemized written bids and milestone-based payments prevent most contractor disasters before they start.

Why 2026 is a strange year to hire

Construction has a people problem. The industry needs an estimated 349,000 net new workers in 2026 to meet demand (ABC, 2026), and 82% of firms say they can’t fill hourly craft positions, the worst share in three years (AGC, 2026).

For you, that cuts two ways. The good contractors are booked out, which tests your patience. And the labor gap pulls underqualified operators into the market to absorb the overflow, which tests your vetting. Both problems have the same answer: the checklist below.

The 12-step checklist

Step 1: write your scope before you call anyone

One page. What you want done, rough dimensions, the finishes you have opinions about, and your real budget range. Contractors bid accurately against clear scope and pad generously against vague scope. This page also becomes your tool for comparing bids later, because everyone quoted the same thing.

Step 2: build a shortlist of three to five

Neighbors who’ve renovated are the best source, since you can see the work and hear the unfiltered version. Fill out the list from directories that verify their listings, like our contractor directory, and from the trucks you see repeatedly in your own neighborhood. Repeat local presence means local reputation to protect.

Step 3: verify licenses yourself

Requirements vary by place. NYC issues Home Improvement Contractor licenses, Westchester County runs its own program, and many states license or register at the state level. Whatever applies where you live, look it up in the actual database. “Fully licensed” in a Facebook ad is a claim, not a fact.

Step 4: get insurance certificates from the broker

General liability plus workers’ comp, sent directly from the contractor’s insurance broker with you named as certificate holder. Direct-from-broker matters because forged and expired COIs are a real thing. If a worker gets hurt on your property and the contractor’s coverage is fiction, your homeowner’s policy becomes the target.

Step 5: read the complaint history

Reviews across a couple of platforms, the BBB record, and your local building department’s complaint files. You’re not looking for perfection. You’re looking for patterns, and how the contractor responded when things went wrong. One angry review means a bad day; the same complaint five times means a business model.

Step 6: interview at least three

Three questions do the work. Who supervises my site day to day? Which trades are your own crew and which are subbed out? How do you price change orders? You’re listening for specificity. The contractor who answers precisely runs jobs precisely. The one who waves off details on the phone will wave them off in your kitchen too.

Step 7: call references from the last 12 months

Recent ones, not the curated classics. Ask each: did it finish on budget, did it finish on schedule, and would you hire them for a bigger job? That last question is the honest one. People hedge on it audibly when the answer is no.

Step 8: collect three itemized bids

Itemized is non-negotiable. Lump sums can’t be compared or audited. Line items show where the money goes and expose what’s missing, and missing items are how lowball bids stay low until the change orders start. Treat the outlier low bid as a warning: the contractor either made an error or made a plan.

Step 9: understand the markup instead of fighting it

The standard GC markup is 20 to 33% of project cost, covering overhead that runs 10 to 15% of a contractor’s revenue plus their profit. Remodels can justify 40 to 50% because opened walls produce surprises (Angi; HomeGuide, 2026). You want this number visible, not hidden. A contractor transparent about margin has stopped needing to recover it creatively.

Step 10: make the contract do its job

Full scope, specified materials, start and completion dates, payment schedule, the change-order process in writing, lien waiver language, and warranty terms. Every clause exists because someone once needed it and didn’t have it. If the contractor resists putting something in writing, that’s information.

Step 11: tie money to milestones

Deposit of 10 to 15%, and some states cap it lower. Every payment after that releases against completed, inspected work: rough-in done, inspection passed, payment goes. Never let payments outrun progress; the homeowner who’s paid 80% for 40% of a job has lost all leverage, and contractors know exactly where that line is.

Step 12: permits pulled by the contractor, in their name

Legitimate contractors pull permits as part of the job. One who asks you to pull them is moving liability onto you, and one who suggests skipping them is offering you unsellable work: unpermitted renovations surface during your future sale, and legalizing them after the fact costs multiples of the permit fee. Both suggestions end the interview.

Red flags worth ending a conversation over

Large cash deposits. Pressure to sign today because “the price goes up Monday.” No physical business address. A COI that arrives as a suspiciously editable PDF from the contractor’s own email. A bid dramatically below the field. Each of these ends interviews on its own, and they rarely appear alone. There are good builders in every market, from Queens to Tulsa. You don’t need to talk yourself into a doubtful one.

After you hire: three habits that keep jobs on track

The checklist gets you a good contractor. A few habits keep the project good. First, set a communication rhythm at the kickoff: a short weekly check-in, even fifteen minutes, catches drift before it becomes a dispute. Contractors juggle multiple jobs, and the client with a standing Tuesday call gets the attention.

Second, document as you go. Photos of open walls before they close, every change order in writing before the work happens, and a running email thread as the project’s paper trail. You’ll probably never need any of it, and that’s the point. The paper trail’s existence is what keeps everyone honest enough that you never need it.

Third, hold the punch list and the final payment together. Walk the finished job with the contractor, list everything incomplete or imperfect, and release the last payment when the list is done, not when it’s promised. That final 10% is the only leverage you’ll have for the small stuff, and small stuff is what you’ll live with for a decade.

If it still goes wrong

Even good hiring occasionally produces a bad project, so know your escalation path before you need it. Start with the contract, since a well-written one already describes how disputes resolve. Document the problem in writing to the contractor and give them a chance to cure it; most disputes end here, because contractors with licenses and local reputations have real incentives to fix things. If it doesn’t end there, your leverage points are the licensing authority that issued their credential, your state’s consumer protection office, and small claims court for amounts within its limit. This is also the moment the milestone payment schedule pays off: the homeowner who hasn’t overpaid has options, and the one who paid ahead has letters to write.

Frequently asked questions

How much should I pay a contractor up front?

10 to 15% is the common benchmark, and several states cap deposits by law. Anyone asking for half up front is asking you to fund their previous job, and that’s not your bill.

What markup is normal for a general contractor?

20 to 33% on total project cost, higher on complex remodels (Angi, 2026). Get it in writing and stop worrying about it; the visible markup is never the one that hurts you.

Should I ever take the lowest bid?

Only when the itemization proves it’s complete. A low bid with the same line items as the others is a deal. A low bid with lines missing is a trap with a delay on it.

How long should hiring take?

About two weeks to run all 12 steps without cutting corners. Against a project measured in months and tens of thousands of dollars, that’s the best-leveraged time in the whole renovation.

The bottom line

Every step here exists because skipping it has a well-documented failure mode. License, broker-issued COI, recent references, three itemized bids, milestone payments, contractor-pulled permits. Run the list and the horror stories mostly can’t happen to you. Start your shortlist in our contractor directory, and if you’re a contractor who clears every step here without flinching, add your free listing. The homeowners doing their homework are looking for you.