How to vet a home services contractor

License, bond, insurance, references, and the eight red flags that catch the worst contractors before they catch you. A practical 90-minute due-diligence flow that costs nothing and prevents the project disasters that cost $20,000+ to unwind.

The 90-minute vetting flow

The pattern below takes about 90 minutes per contractor and rules out 80–90% of the bad ones before they ever set foot on your property. Run it on every contractor you bring in for a real bid, not just the cheapest one. The steps are ordered so the fastest checks come first, which means a contractor who fails step one never costs you the full 90 minutes.

1. License verification (10 minutes)
2. Bond and insurance verification (15 minutes)
3. Reading online reviews the right way (20 minutes)
4. BBB + state attorney general complaint check (10 minutes)
5. Reference calls, three minimum (30 minutes)
6. The in-person walk and what to watch for (5 minutes of attention during the bid visit)

1. License verification

Most states require home services contractors to be licensed for any work over a threshold dollar amount — usually $500 to $1,000 in materials and labor. The license is your single best filter because revoked or expired licenses are public record and easy to verify.

Go to your state's contractor licensing board website. Search by license number (best) or by business name. You're checking four things:

• License status: active. Not "expired," not "lapsed," not "revoked," not "suspended." Active.
• License classification matches the work. A general contractor license doesn't cover specialty trades in many states. Foundation work, electrical, plumbing, HVAC, and roofing often require specific specialty licenses.
• Disciplinary history. Most state boards show a complaint and disciplinary action history. Two or three resolved complaints over 10 years is normal; one open complaint or a recent suspension is not.
• License-holder name matches the business owner. Some contractors operate under another licensee's number — a "license loan" that's illegal in most states and instantly voids any consumer protection.

If the contractor says "we don't need a license for this kind of work" or "the license is held in my partner's name," walk away on the spot. These are the most common license dodges and they always end badly.

2. Bond and insurance verification

License covers competence; bond and insurance cover financial responsibility when things go wrong. Both are easy to verify if you actually do the work.

Surety bond. Most state licensing boards require a contractor bond of $10,000 to $25,000. If a contractor damages your property or abandons the job, you can file a claim against the bond. Get the bond number and bond company name from the licensing board's contractor record. Call the bond company directly (number on their website, NOT a number the contractor gives you) and verify the bond is active.

General liability insurance. Coverage of $1,000,000 per occurrence is the residential standard. Request a Certificate of Insurance (COI) directly from the contractor — they're required to provide it. Then call the insurance carrier listed on the COI to verify it's current. Contractors with expired insurance often hand out old certificates and bet you won't check.

Workers' compensation. If the contractor has any employees (not just subcontractors), workers' comp coverage is required in every US state except Texas. Without it, you can be liable if a worker is injured on your property. The COI should list workers' comp; verify with the carrier.

Ask the contractor to email you the COI. Reputable contractors send it the same day; the ones to avoid make excuses or send out-of-date certificates and hope you don't notice.

3. Reading online reviews the right way

Online reviews are useful but only if you read them correctly. Most people skim the star rating and quit. The real signal is in the patterns.

What a healthy review profile looks like:

• 4.3–4.8 average across 50+ reviews on at least two platforms (Google Business Profile + Yelp, or Google + Houzz, or Google + BBB)
• Reviews spread across months and years, not 30 reviews clustered in one week
• Mix of 5-star, 4-star, and a few 3-star reviews. ALL 5-star reviews is a red flag for review-buying.
• Responses to negative reviews that are calm and specific rather than defensive or accusatory
• Some reviews that mention the project type and rough cost (these are usually the real ones)

What review fraud looks like:

• Burst of 10+ reviews in 1–2 weeks, then nothing for months
• Reviewers with single-review profiles (created the account just to leave that one review)
• Generic language: "great job, would recommend, professional" without project specifics
• Owner responses that copy-paste the same canned reply to every review
• Five-star average with 1,000+ reviews — almost impossible for a contractor doing real work

Read the negative reviews first. The 1-star and 2-star reviews tell you what could go wrong; the response (or lack of one) tells you how the contractor handles disputes.

4. BBB + state attorney general complaint check

BBB ratings are imperfect (the rating algorithm has been criticized for years) but the BBB does publish complaint detail that's useful. Search the business name at bbb.org. Pay attention to:

• Number of complaints in the last 12 months relative to business size
• Whether complaints were resolved or unanswered
• Pattern of complaints — billing disputes, work quality, abandonment

For complaints that didn't reach the BBB, check your state attorney general's consumer complaint database. Search by business name and license number. Construction is one of the most-complained-about categories, so a single resolved complaint isn't a deal-breaker. Three or more open complaints, or a pattern of similar issues, is.

5. Reference calls: the three you need

Every contractor will offer references they've cherry-picked. Use them — but also do this: ask for references from projects that are at least 2 years old AND from a project in the same neighborhood or zip code if possible. Old references reveal warranty behavior; nearby ones can be verified by driving past the work.

Reference-call script that gets candid answers:

1. "How long ago did [contractor] do work for you?" This establishes the timing.
2. "What was the scope?" Confirms the work matches what the contractor told you they do.
3. "Was the final price close to the original estimate, or were there change orders?" This is the question that surfaces scope-creep patterns.
4. "Did they finish on time? If not, what was the delay?" A quick read on schedule reliability.
5. "Anything you wish you'd known before hiring them?" The most valuable question on the list, because it lets the reference vent without leading.
6. "Would you hire them again for a similar project?" Your bottom-line filter.
7. "Did anything come up under warranty? How did they handle it?" Warranty behavior is the single best signal of contractor character.

Three candid reference calls are better than thirty cherry-picked Google reviews. If the contractor refuses to provide references or only gives you ones from the last 30 days, that's a hard pass.

6. What to watch for during the in-person walk

During the bid visit, the contractor's behavior tells you more than the bid amount will. Pay attention to:

• Did they measure? Real contractors measure square footage, take photos, note access issues, ask about the substrate. Cursory walk-throughs followed by quick bids are a sign of templated pricing that won't match your actual project.
• Did they ask about your budget BEFORE giving a number? "What's your budget?" before bidding is a contractor adjusting the bid to whatever you say. Run.
• Did they push for same-day signing or a "today only" discount? The "today only" pitch is the single most common pressure tactic. Every legitimate contractor will hold their bid for at least 30 days.
• Are they driving a marked truck and wearing branded clothing? Not a deal-breaker, but contractors who use unmarked trucks AND avoid wearing branded gear are sometimes hiding which company they actually work for.
• Did they explain the work in plain language? A contractor who can't explain WHY a particular approach is right for your situation either doesn't know or is hiding something.

The eight red flags (instant disqualifiers)

Any one of these should end the conversation:

1. "We don't need a permit." Most jurisdictions require permits for almost all home services work over $1,000–$5,000. A contractor pushing to skip permits is shifting the legal and insurance liability to you.
2. Cash-only or wants 50%+ upfront. Normal: 10–30% deposit for materials, balance on completion or by milestones. 50%+ upfront is a major red flag for contractor cash flow problems or outright fraud.
3. No written contract. "We do everything on a handshake" means there's nothing to enforce if work goes badly.
4. Door-to-door sales pitch. Especially after a storm. Storm-chaser contractors are a known scam pattern in every state.
5. Pressure to sign today. Manufactured urgency is the oldest sales trick in any industry.
6. Won't provide proof of license, bond, or insurance. The "I'll email it later" that never arrives.
7. Wants you to pull the permit yourself. Permit pulled by the homeowner makes you the contractor in the eyes of the law — bypasses contractor licensing requirements and shifts liability.
8. Bid is 40%+ below the others. Either missing scope, planning to hit you with change orders mid-project, or planning to disappear. Bids 40%+ below competitors are almost never legitimate.

The plain reality

Most home services projects do not go wrong because the contractor was actively malicious. They go wrong because the contractor was sloppy, undercapitalized, or in over their head — and the homeowner didn't catch the warning signs. The 90-minute vetting flow above catches the sloppy and undercapitalized ones. The deliberately fraudulent ones tend to fail the license verification step or the BBB check first.

Always verify with your state's contractor licensing board, your insurance carrier, and the contractor's actual reference list — not a paid review service.

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