How much deposit should I pay a contractor?

Keep the deposit small and tie the rest of the payments to completed milestones. A demand for most of the money up front, or cash only, is one of the clearest warning signs.

Should the contractor or I pull the permit?

The licensed contractor should pull the permit in their own name. A permit pulled in the homeowner’s name shifts liability for the work onto you.

How to hire a contractor without getting burned

Updated 2026-09-20

Hiring a good contractor comes down to five checks, in order: license, insurance, written bids, references, and a payment schedule that protects you. Do them before you sign anything.

1. Verify the license

Most states license general and specialty contractors. Look the license up by name or number on your state board's public search, confirm it is active and covers the trade, and check for complaints or disciplinary actions. A pro who can't give you a license number is a hard no for anything but the smallest repair.

2. Confirm insurance

Ask for proof of general-liability insurance and, if they have employees, workers' compensation. On a larger job, ask for a certificate of insurance naming you — if a worker is hurt on an uninsured job, the liability can land on the homeowner.

3. Get itemized bids for the same scope

Get two or three written bids that describe the exact same work, materials and finishes, so you're comparing like for like. The lowest number isn't always the best — look at what's included, the timeline, and how specific the bid is.

4. Check references and recent work

Read recent reviews, ask for two or three local references from the last year, and look at photos of comparable jobs. Call the references and ask whether the job finished on budget and on time, and whether they'd hire the contractor again.

5. Protect the payment schedule

Get the scope, materials, timeline and payment schedule in writing before work starts. Pay a small deposit and tie the rest to completed milestones — never pay the bulk up front. Make sure the contractor pulls any required permit in their own name, and get lien waivers as you pay.