How to Hire a Renovation Contractor and Compare Quotes
Vet, compare and pay a renovation contractor: license checks, line-by-line quote comparison and deposit caps such as California's 10% or $1,000 (CSLB).
Most contractor disasters follow the same script: a large payment up front, no permit pulled, little work done, and then the calls stop. Afterwards the homeowner learns the contractor was never licensed and the insurance certificate belonged to a lapsed policy. Each failure could have been caught with checks that take minutes: a license lookup, a call to the insurer named on the certificate, and a payment schedule that never lets the money run ahead of the work.
This guide follows the hiring process in order, from the written scope to the final payment. Where a rule comes from a regulator, the regulator and the state are named.
Key takeaways: Write the scope before you call anyone, so every quote prices the same job. Verify the license on your state board's website, not the business card. Get several written estimates and compare them line by line, not by the total. Keep the deposit within your state's cap: in California, 10% of the price or $1,000, whichever is less (CSLB). Pay only for work already done, and collect lien releases as you go.
1. Write the scope before you call anyone
Most people start shopping for a contractor before they know what they are buying. "Remodel the kitchen" invites each contractor to price a different job, and you end up comparing three interpretations instead of three prices. A written scope fixes that. It also protects you later, when someone claims an item was "out of scope."
| Put in the scope | Example |
|---|---|
| Room and size | "Second-floor bathroom, 7' × 9', single vanity, tub/shower combo" |
| What comes out | "Remove and dispose of vanity, toilet, flooring and tile surround" |
| What goes in, with grade | "Semi-custom vanity (not stock), quartz top, 12×24 porcelain floor tile" |
| Layout | "Existing layout kept," or the exact changes |
| Trade work | "Plumbing: replace toilet, move shower valve 6 inches. Electrical: GFCI circuits, new exhaust fan, two recessed lights" |
| Exclusions | "Appliances and tile supplied by owner; no touch-up painting" |
| Dates | Target start and any hard deadline |
Then price the job yourself before the first quote arrives. Our whole-house remodel, kitchen remodel and bathroom renovation calculators give a sourced range for your scope and state. Hold a reserve on top: This Old House advises adding 10%–15% to contractor estimates for unexpected costs, and older houses are where it gets spent (see our contingency budget guide). If the project itself is not planned yet, with its scope level, order of trades and permits, start with how to plan a home renovation.
2. Find contractors worth interviewing
- Referrals first. The FTC's first piece of advice is to get recommendations from people you know and trust. Neighbors who finished similar work recently are the best source.
- Professional associations. The National Association of the Remodeling Industry (NARI) and the National Association of Home Builders (NAHB) publish member directories. Membership is no guarantee of quality, but it signals a contractor who invests in the business.
- Complaint history. The FTC suggests checking with your local Home Builders Association and consumer protection officials, and searching the company name online together with words like "scam," "review" and "complaint."
- Review sites. Read them "with a critical eye," as the FTC puts it. Comments about schedule, change orders and communication tell you more than the star average.
- Skip the door-knockers. The FTC lists contractors who show up because they are "in the area," or who have materials "left over from a previous job," as signs of a scam.
3. Vet contractors before you ask for a bid
A detailed bid costs a contractor hours. Screen first and ask for bids only from the ones who pass.
License
Licensing is set by each state. Some license general contractors statewide, some license only certain trades, and some leave it to cities or counties. The FTC's advice is to check with your state or county government to confirm the license. On the board's website, confirm the license is active, that its classification covers your kind of work, and whether any complaints or discipline are on record.
California shows how much the rules matter. The Contractors State License Board (CSLB) says it is illegal for an unlicensed person to take a job valued at $1,000 or more in combined labor and materials, or any job that requires a building permit. You can check a license online or by phone at 1-800-321-CSLB (2752).
Insurance and references
Ask for proof of insurance, as the FTC advises: certificates for general liability and, if the contractor has employees, workers' compensation. Then call the insurer named on the certificate to confirm the policy is active. CSLB's homeowner checklist asks for at least three local references. Call them, and see the finished work if you can.
| Check | How to verify |
|---|---|
| State license | State board website or phone line; county if the state does not license the trade |
| General liability insurance | Certificate of insurance, confirmed with the insurer |
| Workers' compensation | Certificate, if they use employees |
| References | At least three local references (CSLB), ideally recent, comparable jobs |
| Complaints | Home Builders Association, consumer protection office, online search (FTC) |
| Permit history | Some building departments publish the permits a contractor has pulled |
| Business address | Confirm a real business operates there |
Questions for a 15-minute phone screen:
- "Are you licensed for this work in my state? What is the number?" Verify it yourself.
- "Have you done this type of project in the last 12 months?" A bathroom specialist bidding a whole-house remodel is a mismatch.
- "How do you handle change orders?" You want a written process with your approval before work starts.
- "Can I see your standard contract?" Read it before the bidding stage, not after.
Questions for references: Did the final cost match the bid, and if not, what changed? Did they keep the schedule, and how did they handle delays? How often did they update you? Would you hire them again at the same price? The last question cuts through politeness.
4. Ask for itemized, comparable quotes
An estimate is an informal number for budgeting. A quote or bid is a price for a defined scope that you can sign. Always ask which one you are getting and under what conditions the price can change. The FTC says a written estimate should include a description of the work, the materials, the completion date and the price.
Ask every contractor to break the price into the same parts: labor by trade or phase, materials, permits and inspections (and who pulls them), overhead and margin, and any allowances. A complete bid looks like this:
| Section | What to look for | Red flag |
|---|---|---|
| Scope | Line items that match your written scope | "Kitchen remodel as discussed" |
| Materials | Brands, models, quantities | Allowances on most items |
| Labor | Days or cost per phase | One lump sum |
| Permits | Who pulls them, whether fees are included | No mention of permits |
| Schedule | Start date, phase milestones, completion date | A single duration with no phases |
| Payments | Tied to completed milestones | Front-loaded payments |
| Warranty | Written terms for labor and materials | None stated |
| Change orders | How changes are priced and approved | No process |
5. Compare quotes line by line
Why the totals mislead
Take three hypothetical quotes for the same kitchen: $38,000, $52,000 and $67,000. The instinct is to pick the middle one. But the comparison means nothing until all three price the same scope, the same materials and the same risks. In practice Quote A may leave out demolition, permits and tile installation. Quote B may price stock cabinets where your specification said semi-custom. Quote C may include a designer's fee and tile your specification does not call for.
Build a comparison sheet
List every line from your scope down the side and the quotes across the top. Mark each cell included, excluded or allowance: $X.
| Line | Quote A | Quote B | Quote C |
|---|---|---|---|
| Demolition and haul-away | Excluded | Included | Included |
| Permits | Excluded | Included | Included |
| Cabinets | Semi-custom | Stock (spec says semi-custom) | Semi-custom |
| Tile | Allowance $2,000 | Allowance $5,000 | Specified product |
| Design fee | None | None | Included |
Then get a written price for every excluded cell from the contractor who left it out, and replace each allowance with the cost of the product you will actually choose. Allowances are not wrong in themselves, but they are where cheap quotes hide. If the tile you want costs $4,000, Quote A's $2,000 allowance adds $2,000 to its total, while Quote B's $5,000 allowance already covers it. Permits alone run $450–$2,500 on a kitchen remodel, by Fixr's figures. Once every column prices the same job, the gap between quotes usually shrinks, and the remaining difference is a real one you can ask about.
Check against a benchmark
Before the quotes arrive, know what the market says. Fixr's January 2026 data puts the average bathroom remodel at $12,000, with most between $6,000 and $18,000, and labor at about half the bill. Adjusting that labor half for state construction wages (BLS, May 2025) gives about $6,050–$18,100 in Colorado (wage index 1.01) and about $6,600–$19,800 in California (index 1.20). Fixr puts the average kitchen remodel at about $27,000, with most between $15,000 and $45,000. For a whole house, This Old House, citing Angi data, gives $19,500–$88,400 for a typical renovation. Our calculators apply the same state adjustment to your own scope; how regional cost adjustments work explains the method.
A quote inside the range is a reasonable starting point; check its scope and terms. For a quote well below, find what is missing: the FTC advises against choosing the lowest bidder automatically and suggests asking for an explanation when estimates differ widely. For a quote well above, ask what it includes that the others leave out. It may be padding, or the only complete price. A benchmark cannot prove a quote right; it shows when a quote needs explaining.
6. General contractor or hire the trades yourself?
Bob Vila puts a general contractor's fee at 10% to 20% of the total cost of construction, or $10,000 to $20,000 on a $100,000 project. The fee buys scheduling, permits, inspections, deliveries and someone to settle disputes between trades. Hire the trades yourself and you save the fee but become the project manager: each trade must arrive in the right order, inspections must pass between phases, and nobody's work can damage what the last trade finished.
Doing it yourself suits a single-trade job or a small project you can supervise in person. A general contractor earns the fee when several trades are involved, when there is structural work, or when you cannot be on site during the day, because rework from trades arriving in the wrong order can cost more than the fee.
7. The contract: what it must say
A handshake is not a contract. The FTC says to ask for a written agreement even where state law does not require one. California requires a written contract for every home improvement job over $500 (CSLB).
| Clause | Why it matters | Source |
|---|---|---|
| Contractor's name, address, phone and license number | Lets you verify and find them later | FTC, CSLB |
| Detailed description of work and materials, and who does each task | The written scope, attached to the contract | CSLB |
| Price and a written payment schedule | Ties every payment to finished work | CSLB |
| Estimated start and completion dates | Gives you a basis to act on delays | FTC, CSLB |
| Who obtains permits, and whether fees are included | Prevents the "you pull the permit" trap | CSLB |
| Change orders in writing, signed by both sides before any change in price or scope | Stops surprise bills | CSLB |
| Written warranties for labor and materials | Defines what gets fixed after completion | CSLB |
| Cleanup and debris removal | A common source of disputes | CSLB |
| Promises made in conversation | Anything not written down is hard to enforce | FTC |
| Written notice of your right to cancel | Required for many sales made at home | FTC |
| No blank spaces | Blanks can be filled in later | FTC |
Also ask for a fixed price rather than cost-plus, a lien release at every payment (see below), a termination clause, and a dispute process that starts with mediation. For a large or unusual contract, an attorney's review is worth paying for.
Your right to cancel
Under the FTC's Cooling-Off Rule, a sale of $25 or more made at your home can be canceled for a full refund until midnight of the third business day after the sale (Saturdays count). It does not cover emergency repairs, repairs you invited the seller to make (extras beyond that request are covered), or deals you finished negotiating at the seller's permanent place of business. Some states add time: California homeowners 65 and older get five days (CSLB), and Maryland's door-to-door rule allows five business days, or seven days for buyers 65 and older (MHIC).
8. Deposits and the payment schedule
The FTC's rules are short: don't pay the full amount up front, check whether your state limits the down payment, and never make the final payment until the work is done and you are satisfied with it.
| State | Deposit rule | After the deposit |
|---|---|---|
| California | Lesser of 10% of the contract price or $1,000 (CSLB) | Payments may not exceed the value of the work performed |
| Maryland | No more than one-third of the contract price, and nothing before the contract is signed (MHIC) | The law does not set the schedule; it is negotiated |
| Other states | Ask your state or local consumer agency (FTC) | Tie each payment to finished work |
On a $40,000 kitchen, that is a $1,000 maximum deposit in California and $13,333 in Maryland. A contractor who needs half the price before starting is asking you to finance the business, and in California that payment would be far over the legal limit.
A milestone schedule that keeps you ahead of the money:
| Payment | Release it when |
|---|---|
| Deposit | The contract is signed, within your state's cap |
| Progress payment 1 | Materials are delivered to the site, or rough-in is complete and inspected |
| Progress payment 2 | Drywall and major finishes are complete |
| Final payment | The final inspection has passed and every punch list item is done |
Pay by check or bank transfer so there is a record; the FTC lists cash-only demands among scam signs. The draw schedule entry covers how lenders release money on financed jobs.
Lien releases
A subcontractor or supplier your contractor fails to pay can file a mechanics lien against your home, even after you have paid the contractor in full. The rules are set by each state. California's, as CSLB describes them:
- Subcontractors and suppliers send a Preliminary Notice to keep their lien rights. A notice delivered more than 20 days after they start limits their claim to work done from 20 days before the notice.
- Before each payment, get a conditional release from the possible claimants. After paying, get an unconditional release signed by each claimant who was paid.
- By law you may withhold the next payment until you have the unconditional releases for the previous one.
- A joint check, payable to both the contractor and the subcontractor or supplier, is the simplest way to prevent a lien.
- Filing a Notice of Completion with the county recorder within 15 days of completion cuts the time to record a lien from 90 to 60 days for the contractor and from 90 to 30 days for subcontractors and suppliers.
In other states, ask the licensing board or a real estate attorney how liens work before the first payment, not after a notice arrives.
9. Change orders
A change order is a written change to scope or price after signing, and CSLB says both sides must sign it before the change is made. Legitimate ones come from conditions found at demolition (rot, mold, structural problems), changes you ask for, and material substitutions. Warning signs: frequent small change orders for work that belonged in the original scope, change orders before work starts, and verbal changes billed later. Keep money for genuine surprises in a contingency reserve you control, not in the contractor's price.
10. What to negotiate, and what not to
Negotiate the payment schedule, material substitutions that perform the same, bundled small jobs and a flexible start date. Do not trade away licensing, insurance, permits, milestone payments or the final payment held until the punch list is done; a lower price that costs you any of those is not a saving.
11. Red flags
Walk away if the contractor:
- knocks on your door because they are "in the area," or has materials left over from another job (FTC)
- pressures you for an immediate decision (FTC)
- asks you to pay everything up front, or accepts only cash (FTC)
- suggests you borrow from a lender they know (FTC). Never agree to contractor-arranged financing without comparing loans; our renovation loan calculator shows what a loan really costs per month.
- asks you to get the building permits yourself (FTC)
- has no license you can verify, or will not show proof of insurance
- asks for a deposit above your state's cap
- will not put the job in a written contract, or leaves blanks in it
Proceed with caution if:
- the scope is vague and the price is low
- most materials are allowances rather than specified products
- they cannot give you recent local references
- they cannot explain why their price is far from the others
When the standard process does not fit
- Emergencies. With water coming through the ceiling, call your insurer first (many keep contractor networks), pay for the emergency fix only, then bid the permanent repair properly. The Cooling-Off Rule does not cover emergency repairs, so read before you sign.
- Specialty work or rural areas. With only one or two qualified firms nearby, vetting shifts from comparing bids to checking references and visiting finished jobs.
- Small jobs. One verified referral, a license check and a written scope may be enough. In California, any job of $1,000 or more in labor and materials still requires a licensed contractor (CSLB).
After you sign
- Communicate in writing. A weekly walkthrough, one contact on each side, every decision written down.
- Inspect before each payment. Walk the site with your scope in hand. A framing mistake is easy to fix before drywall and expensive after.
- Raise problems the day you see them. If a dispute grows, the FTC advises trying the contractor first, following calls with a certified letter, then going to your state attorney general or local consumer protection office, the local home builders association or a dispute resolution program.
- Keep the paperwork. Permits, inspection records, lien releases and receipts matter when you sell; see the best renovations before selling.
Sources
How the cost figures on this site are built: methodology.
- Federal Trade Commission, How To Avoid a Home Improvement Scam — choosing and checking contractors, written estimates and contracts, payments, scam warning signs, where to complain (July 2022). link
- Federal Trade Commission, Buyer's Remorse: The FTC's Cooling-Off Rule May Help — cancellation until midnight of the third business day, the $25 threshold for sales at home, exceptions for emergency and requested repairs (September 2025). link
- Contractors State License Board (California), Learn About Home Improvement Contracts — down payment limit of $1,000 or 10%, payments not to exceed the value of work performed, written contract for jobs over $500, required contract contents (accessed October 30, 2026). link
- Contractors State License Board (California), Home Improvement Contracts: Homeowner Checklists — at least three local references, license check by phone, 3-day and 5-day (age 65+) rights to cancel, permits in the contract (accessed October 30, 2026). link
- Contractors State License Board (California), What is illegal contractor activity? — license required for jobs of $1,000 or more in labor and materials, or any job needing a building permit (accessed October 30, 2026). link
- Contractors State License Board (California), How to Prevent a Mechanics Lien — preliminary notice and the 20-day rule, conditional and unconditional releases, withholding payment, joint checks, Notice of Completion (accessed October 30, 2026). link
- Maryland Department of Labor, Home Improvement Commission, Maryland Home Improvement Contracts — deposit limit of one-third, no payment before signing, cancellation periods, contract contents (accessed October 30, 2026). link
- Bob Vila, How to Hire the Right General Contractor for Your Project — general contractor fee of 10 to 20 percent of construction cost (updated September 12, 2022). link
- Fixr, How Much Does a Kitchen Remodel Cost? — average about $27,000, most $15,000–$45,000; permits $450–$2,500 (updated January 27, 2026). link
- Fixr, How Much Does It Cost to Remodel a Bathroom? — average $12,000, most $6,000–$18,000; labor about 50% (updated January 27, 2026). link
- This Old House, How Much Does Home Renovation Cost? (2026 Pricing) — typical renovation $19,500–$88,400 (Angi data); add 10%–15% to estimates for unexpected costs (updated March 31, 2026). link
- U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics — state construction wage index, California 1.20 and Colorado 1.01 (May 2025). link
Related
- How to plan a home renovation — scope levels, the order trades work in, timelines and permits
- Renovation contingency budget — how much to hold back and what it covers
- What renovation permits cost — permit fees by project type
- Whole house remodel cost calculator — benchmark a quote for your scope and state
- Kitchen remodel cost calculator — cost by component and finish level
- Mechanics lien — how an unpaid subcontractor can claim against your home
Frequently Asked Questions
How many contractor quotes should I get?
Get at least three written estimates priced on the same written scope. The FTC advises getting multiple estimates, says a written estimate should describe the work, the materials, the completion date and the price, and warns against automatically choosing the lowest bidder. When totals differ widely, ask each contractor to explain the gap before you compare prices; usually one quote leaves out demolition, permits or a whole trade.
How much deposit should I pay a contractor?
As little as your state allows. In California the down payment on a home improvement contract cannot exceed 10% of the contract price or $1,000, whichever is less (CSLB). Maryland caps it at one-third of the contract price and bars any payment before the contract is signed (MHIC). Elsewhere, ask your state or local consumer agency, as the FTC advises, and never pay the full amount up front.
How do I check a contractor's license?
Search your state's contractor licensing board, or your county if the state does not license that type of work, and confirm the license is active, covers your kind of job and shows no discipline. In California, anyone taking a job worth $1,000 or more in combined labor and materials, or any job that needs a building permit, must hold a CSLB license. You can check online or by phone at 1-800-321-2752.
What should a renovation contract include?
The FTC lists the contractor's name, address, phone and license number, estimated start and completion dates, any promises made in conversation, and a written statement of your right to cancel, with every blank filled in. California's CSLB adds a detailed description of work and materials, a payment schedule, who obtains the permits, written change orders signed before any change, and written warranties. California requires a written contract for jobs over $500.
What is a lien release, and when do I collect one?
It is a signed waiver of a contractor's, subcontractor's or supplier's right to file a mechanics lien on your home for work you have paid for. In California, CSLB advises getting a conditional release before each payment and an unconditional release, signed by each claimant paid, afterwards. By law you may withhold the next payment until you have the unconditional releases for the previous one. Lien rules vary by state.
Can I cancel a renovation contract I signed at home?
Often, yes. The FTC's Cooling-Off Rule lets you cancel a sale of $25 or more made at your home until midnight of the third business day, with exceptions for emergency repairs and for repairs you invited the seller to make. Some states go further: California gives homeowners 65 and older five days (CSLB), and Maryland's door-to-door rule allows five business days, or seven days for buyers 65 and older (MHIC).
What are the red flags when hiring a contractor?
The FTC's list: knocking on your door because they are in the area, offering materials left over from another job, pressing for an immediate decision, asking you to pay everything up front or accepting only cash, steering you to a lender they know, and asking you to get the building permits. Add two more: a deposit above your state's legal cap and a refusal to put the job in a written contract.
Should I hire a general contractor or the trades directly?
General contractors typically charge 10% to 20% of the total cost of construction (Bob Vila), or $10,000 to $20,000 on a $100,000 project. For that they schedule the trades, pull permits and line up inspections between phases. Hiring trades directly suits a single-trade job you can supervise; once several trades must work in sequence around inspections, coordination mistakes can cost more than the fee.
Why is one contractor's quote so much lower than the others?
Usually because it prices less work: demolition, permits or a trade left out, lower-grade materials than your specification, or allowances set low that rise once you choose real products. Permits alone run $450 to $2,500 on a kitchen remodel (Fixr). The FTC advises against picking the lowest bidder automatically and suggests asking for an explanation when estimates differ widely. Get the itemized breakdown and compare it line by line.
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