Unless you are dealing with an emergency repair, it is a good practice to obtain several bids from different contractors before actually hiring one to do the work. You should look at two things when you get the bid: 1) what work is the contractor proposing to do to fix my problem?; and 2) how much is that work going to cost?
Require All Bids to Be in Writing
Sometimes a contractor will come to your house and evaluate your problem and tell you it will be "X dollars" for the repair. Even if he or she seems like the most trustworthy person in the world, get the proposal in writing. Never hire a contractor without a written proposal.
Make Sure that Basic Terms are Contained Within The Written Bid/Proposal
At the very least, the proposal should have the following terms and conditions: 1) total price; 2) specific description of work to be performed; and 3) time within which the work will be completed (if more than 1 day). Also, if there is a warranty on the work, make sure that it is in writing.
Verify that the Contractor is Licensed and Insured
After you have gathered your bids, do some quick checking into the status of each contractor's insurance and license. Most contractor's will have their information right on their proposals or contracts. Just because you see a "License Number" on a document does not mean that the contractor is licensed in your jurisdiction. For example, contractors doing home improvement work in New York City must be licensed by the New York City Department of Consumer Affairs. Similarly, contractors doing work in Nassau County must be licensed by Nassau County Consumer Affairs and contractors doing work in Suffolk County must be licensed by Suffolk County Consumer Affairs. It does not matter where the contractor is based, it must be licensed in the country or other jurisdiction that the work is being done in.
Contact Your Local Department of Consumer Affairs and Inquire About Complaints
Most Consumer Affairs offices maintain lists of "deadbeat" contractors. If you call in with the name of your contractor, they will check the name against their list and let you know if the contractor has a negative history with them.
Document All Work
Once you have done your research and accepted a bid, make sure you keep records of everything that transpires with the contractor. If the work is just a simple every day repair, you may only have one piece of paper. If it is a more significant job like a home addition, you will likely have several contracts, invoices, bills, etc. Also keep track of any letters exchanged with the contractor, including e-mails.
Request All Changes to Original Contract Be in Writing
There are typically two types of changes that you will encounter: 1) a change in the price; and 2) a change in the scope of work. If, for any reason, the price of the work changes or the scope of work changes, and you accept the change, request a revised proposal or additional work order in writing. The document should detail the specific changes. The change should be signed by the contractor.
Photographs Are Your Friend
Before any work is done, take photos of the work area. As work progresses, feel free to take as many photographs as you want. If something looks wrong, take a photo. Once the work is done, take more photos and keep everything in a safe place. If an immediate problem presents itself, the photos will come in handy. If a problem does not develop until down the line, the photos of the work progressing will help an expert determine what went wrong.