How to hire a contractor without getting burned.

Check 1 — Verify the license is active

Every state licensing board publishes a free public license-lookup portal. Enter the contractor's license number. You're confirming three things: status (Active, not Expired / Suspended / Revoked), class (does their license class actually cover your project — a B-General isn't qualified for a structural concrete job in California), and disciplinary history (open complaints, past suspensions, bond claims).

State-by-state lookup URLs for the top ten metro states:

• California — CSLB: www.cslb.ca.gov
• Texas — TDLR: www.tdlr.texas.gov
• Florida — CILB: www.myfloridalicense.com
• New York — DOB + NY DOS: NYC DOB · NY DOS
• Arizona — ROC: roc.az.gov
• Washington — L&I: lni.wa.gov
• Nevada — NSCB: nscb.nv.gov
• Georgia — GSBLC: sos.ga.gov
• Illinois — IDFPR: idfpr.illinois.gov
• Ontario, Canada — HCRA: hcraontario.ca

Check 2 — Confirm insurance and bonding

Ask for the contractor's ACORD 25 Certificate of Insurance. It's a standardized one-page document their insurance broker generates in 30 seconds — if they hesitate, that's a signal. The ACORD 25 lists coverage limits, policy numbers, and effective dates. Three things to verify: general liability ≥ your state minimum (usually $500K-$1M per occurrence), workers compensation is active (if they have employees — sole proprietors in some states can opt out, but they should disclose), and you are listed as a Certificate Holder so you get notified of lapses during your project.

Bonding is separate. A contractor's license bond is a financial guarantee filed with the state licensing board. If the contractor doesn't finish the work or doesn't pay their subs, you can file a claim against the bond. California CSLB requires a $25,000 minimum. Texas and Florida vary by license class. The state board website will show active bond status on the license lookup.

An ACORD 25 alone is not enough. Ask for the broker's name and phone number and call to confirm coverage is current as of today — insurance can be canceled mid-policy. Five minutes on the phone.

Check 3 — Call three references

Don't rely on Yelp stars. The BBB A+ rating (when present) is the single strongest signal — it reflects a zero-unresolved-complaint record and active accreditation. But even BBB can be noisy. The real data is three reference calls.

Ask the contractor for three past clients whose project was similar in scope and size to yours. A kitchen remodeler should give you three kitchen references. An ADU specialist should give you three ADU references. If they give you references from a scope unlike yours, they're signaling they don't have the experience you need.

Call each. Five questions: (1) Did they finish on the schedule you agreed to? (2) Did change orders stay reasonable or did the final price creep? (3) How did they handle problems — good contractors have problems too, it's how they handle them. (4) Would you hire them again? (5) Is there anything you'd do differently in how you structured the contract? Red flag: any reference who is vague, hesitant, or adds qualifiers.

Check 4 — The estimate process

A real estimate is line-item. It lists materials with grade and quantity (tile: 120 sq ft of ceramic 12×24 at $4.50/sq ft = $540), labor hours by trade, scope exclusions (things NOT included), a schedule with milestones, and a payment schedule tied to milestones. “We'll figure it out as we go” is a $40,000 mistake — that phrase is the single most reliable predictor of a contract dispute. Ask for the estimate in writing. Every contractor you're seriously considering should provide one.

Compare estimates apples-to-apples. Two bids on the same kitchen should both include cabinets (same brand, same quality tier, same quantity), countertops (same material, same sq footage), appliances (which ones are included in the bid vs your supply), electrical (what's new vs what's existing), plumbing, and tile. If Bid A is $18K and Bid B is $28K, read line by line — the $10K delta is usually in cabinet grade or what's excluded. The cheapest bid is rarely the best bid. The clearest bid usually is.

Sanity-check pricing against regional averages. Our per-city cost hubs at /cost/{city}-remodel-costs-2026 publish 2025-2026 medians for kitchens, bathrooms, ADUs, full renovations, and specialty work across 75+ metros. A bid that's 30% below the regional median is either a bait bid (expect mid-project change-order shock) or the contractor doesn't know their numbers. A bid 20% above median needs to justify the premium in scope or materials.

Check 5 — Read the contract before you sign

Four non-negotiable clauses every construction contract should contain. First, a payment schedule tied to physical milestones, not calendar dates — “25% at rough-in inspection pass” not “25% on July 15.” California CSLB caps residential down payments at 10% or $1,000 whichever is less; a contractor asking for 30-50% upfront is either cash-strapped or planning to disappear. Second, a written change-order process: all changes to scope must be in writing, signed by both parties, with stated cost and time impact. Third, liquidated damages for late completion — a modest daily penalty ($100-$250/day for residential) that aligns the contractor's incentive with your schedule. Fourth, the federal three-day right-to-cancel clause, which is required on every door-to-door or in-home signing.

Additionally: dispute resolution (arbitration vs litigation, venue), mechanic's lien release at each payment, and warranty terms (most states require a 1-year workmanship warranty; better contractors offer 2-5 years). Read the contract fully. If a clause is ambiguous, ask the contractor to clarify in writing before you sign. A contractor who pushes back on any of these clauses is not the contractor you want.

The lead-platform reality

If you submit a contractor-search form on Angi, Thumbtack, HomeAdvisor, or Houzz Pro, your name, phone, email, and project description are sold simultaneously to 3-10 contractors in your zip code. Each contractor pays the platform $20-$80 for the lead. Each contractor calls you on their own. Expected volume: 4-8 phone calls and texts in the first 24-48 hours, sometimes continuing for weeks. This is not a platform abuse — it is how the pay-per-lead business model works, and it is disclosed in each platform's terms of service.

The 2023 FTC $7.2M settlement with HomeAdvisor (see ftc.gov) documented the contractor side of this equation: contractors received leads outside their trade or service area, and the platform's pre-screening did not meaningfully filter. For homeowners, the settlement is evidence that the structural incentive — revenue earned at the moment the lead is sold, not at the moment a project completes — produces misalignment.

If you want to see the exact number of contractors who will receive your info for your project before you submit the form, use our free /tools/exposure-check. Enter zip + project type + platforms you're considering — see the fan-out number, the “lead tax” baked into every quote, and the alternative. No email capture.

The alternative: exclusive match

AskBaily inverts the shared-lead model. You enter the chat, an AI assistant (Baily) walks you through a structured scoping pass — project type, scope, budget, timeline, constraints, style preferences — and the output is a structured project brief. We then route that brief to exactly one contractor in your area who passes a live state-license-board check, has active insurance and bonding, and whose declared specialties fit your scope. If the first match doesn't land, a second is surfaced after a short delay. Your contact info is never sold.

AskBaily is currently live in all 50 US states and 12 international regions. The /for-pros/recruit/{state} pages detail the active partner pool per state. To start a match, open the chat at askbaily.com and describe your project.