Edward Hiller: The best way to control the risk in dealing with the contractor, is to make sure: A, you have everything in writing, and B, what is in writing is objective.
Steve Millstein: This contract is the contract to the most important transaction of your life, and you want it to contain every last bit of information that you have thought of, with respect to the purchase of this house.
Edward Hiller: To any extent that a contract is vague, it is subject to different interpretations, and that's where homeowners are at risk.
Steve Millstein: You better make sure that you have included every single item into that contract, that you want to be able to addressed at a later date.
Edward Hiller: If it would upset you that there are going to be less than 12 recess lights in any given room, because that's your office, and you really need good light for that. Make sure that's in the contract, but if you don't care what kind of baseboard it is, then there's no reason to waste a paragraph specifying the exact quality of the vinyl that's going to be around the room. If there is a certain issue which would upset you if not done to your expectation, put it in writing.
Steve Millstein: Anything that anyone is telling you, they should be willing to reduce to writing, and include in the contract. If they're not willing to do that, you should be concerned.
Edward Hiller: Every specific that you can put into a contract, protects you against a misinterpretation, and allows you to hold the contractor to a standard that you expect.
Steve Millstein: Hold money back; don't pay every dollar of every invoice. Have the contract state that there's going to be 10% retention. So at the end of the job, the consumer is holding 10%, $40,000 of our $400,000 construction project, just to ensure that all of the remaining work is done, that any lingering problems what we call punch list issues are taken care of, and that the contract is prompt not just in doing the first 95%, but in finishing up the project, and turning it over to you.
