Three Bids and One Contract: The Numbers That Protect Homeowners Before Construction Starts

Homeowners in Central Indiana can reduce financial risk on construction projects by following a specific verification process before signing any agreements.

The Better Business Bureau Serving Central Indiana has long recommended that consumers look beyond simple online ratings to evaluate potential contractors. This guidance remains central to their weekly advice column, which aims to help residents protect their investments before work begins. The organization emphasizes that a business's history of resolving complaints is a more reliable indicator of future performance than a high average star rating.

To verify a company's standing, homeowners should first search the business on BBB.org. This database includes customer feedback, formal complaints, and alerts regarding legal disputes or government actions. Jennifer Adamany, a spokesperson for the BBB Serving Central Indiana, noted that a company's reaction to negative feedback reveals how it treats customers when projects go wrong. She explained that defensive behavior or a lack of response to complaints is a key indicator of potential future issues. The BBB also issues specific alerts when it observes patterns of concerning behavior or legal conflicts that consumers should know about before hiring.

Residents should also confirm that a business is registered and in good standing by checking the Indiana Secretary of State database. Court records are available through MyCase.IN.gov, where homeowners can search for the business name and the owner or representative to review any criminal cases or civil lawsuits. It is also advisable to ask the contractor for references from recent local projects. Homeowners should contact these references to ask about the quality of work, adherence to budget, and timeline compliance. Inspecting the completed work in person, if possible, provides additional verification.

Next, homeowners should obtain at least three bids from different businesses to ensure each covers the same scope of work and materials. A bid that is significantly lower than the others may indicate that the contractor plans to cut corners or misunderstands the project requirements. Adamany warned that low pricing often results in lower quality work or materials. She also cautioned that businesses may solicit or pay for favorable reviews on platforms like Google or Facebook, making the BBB's verification process more reliable for assessing honest customer feedback.

Before work starts, homeowners must secure a written estimate and a complete contract signed by both parties. The agreement should include contact information, start and completion dates, a detailed description of the work, material costs, payment terms, and warranty details. It must also specify who will obtain building permits and handle cleanup. Any verbal promises should be included in writing. Homeowners should verify that the contractor holds the required licenses and insurance, including workers' compensation, property damage, and personal liability coverage. The contract should explain who is responsible for building permits, which are usually obtained by the contractor but often paid for by the customer.

Payment schedules should be structured so that the final payment is due only after the work is complete and has been inspected. Homeowners should avoid paying cash and instead make checks payable to the company or use a credit card, which can facilitate charge disputes if the work is not completed as agreed. Once the job is finished and the final payment is made, homeowners should request a receipt marked as paid in full.