1. Research pays off, but remember who the expert is.
DO research your project before you get quotes. It doesn't hurt to find out, at least generally, the correct way your project should be completed. Look at trade magazines and visit home improvement websites to explore different approaches to remodeling. A little knowledge gives you power to negotiate the best price for the best work.
DON'T think a little knowledge makes you an expert. Above all, don't think your project will be completed like projects you see portrayed on television. Home improvement television shows are deceiving. There are whole crews bringing the project to a finish in-between the time the camera is rolling. Mistakes are edited out. Remember that every remodeling project is different, and there can be hidden complications.
2. Get competitive bids, but don't take the lowest bid offered.
DO get competitive bids. For small projects, calling 2 or 3 contractors is usually sufficient. For larger, more extensive projects, it's wise to have a minimum of 4 to 5 contractors bidding against each other.
DON'T take the lowest bid, thinking you will be getting the best deal, even if your contractor shows up in a designer polo in a big, shiny truck with custom lettering looking like the perfect professional. Be leery of any contractor eager to bid lower than everyone else. It's common practice for less-reputable remodelers to have "hidden costs" they spring on you later in the project, when everything is torn apart and you feel like you can't back out without extreme inconvenience or loss of what you've already invested.
3. Negotiate for the best price, but don't under-value your contractor.
DO negotiate for the best price. Pick the best contractors, and give them a chance to bid against each other for your project. Most contractors are willing to negotiate. If you can't get them to negotiate on the labor price, ask them to offer you discounts on materials. Most contractors get commercial discounts between 5-25% from suppliers, and may be able to offer you a portion, if not all, of this discount without suffering a loss on the value of their time. Depending on the size of your project, this can equate to significant savings. Some contractors may offer you a much lower labor price to beat out other bids, but make up for it later through high mark-ups on materials.
DON'T get too obsessed with negotiating. Contractors often pay high insurance and overhead costs, especially if they have employees. They want to work for you, but if you want a high quality product, keep in mind that a reputable contractor with good references will walk away from your project if he thinks you are under-valuing his skills. No one wants to be under-valued.
4. Insist on a contract, and understand its terms.
DO insist on a comprehensive contract. Surprisingly, many people think a contract locks them into a set price, which is not really the case. Anyone can write a number down on paper, the most important aspect of any remodeling contract is the detailed scope of services to be provided. Even for small jobs, this is the key to getting services with a set price.
DON'T ignore payment terms, which can vary greatly between contractors. Make sure you understand terms fully. Pay your contractor in a timely manner, especially if he's efficient and provides quality workmanship. If you find the contractor is not meeting his end of the bargain, you have every right to withhold payment until a certain portion of the work is completed in accordance with the terms of your contract.
5. Check references carefully.
DO check references, and if possible, look at a portfolio of finished projects. Try to arrange a visit to a site where the contractor performed work similar to your own project.
DON'T let a contractor's charm sway you. If you are investing a sizeable amount of money into a remodeling project, you want to ensure that the contractor has a good track record by calling or visiting client references. If possible, try to talk with clients who have finished projects more than a year old. Newly remodeled areas always look great compared with the old, but work that still looks great a year or more later is proof of quality workmanship.