The home improvement industry has a reputation problem, and most of it is earned. Bad contractors damage homes, miss deadlines, run off with deposits, and leave homeowners with thousands of dollars in cleanup costs. Good contractors do the opposite — but it’s not always easy to tell them apart upfront.
This is the checklist we recommend every homeowner run before signing a contract for any major home improvement work, regardless of how the contractor was sourced.
Verify the basics
Before you spend any time evaluating the bid itself, verify these:
Active business registration
Look up the contractor’s business name with the Colorado Secretary of State (sos.state.co.us). The business should be active, in good standing, and registered to the address they claim to operate from. If they’re operating under a DBA (trade name), confirm the DBA is registered.
Active licensing
Colorado doesn’t have a general contractor license at the state level for most work, but most municipalities do. Check the local building department for the city or county where the work will be performed. Most have searchable contractor license databases.
For roofing specifically: roofers in Colorado are required to register with the Colorado Department of Regulatory Agencies (DORA). Check the DORA database to confirm they’re registered.
For electrical and plumbing: these trades require state licensing in Colorado. Verify on the DORA site.
Current insurance
Ask for current Certificates of Insurance (COI) showing:
- General Liability — minimum $1 million per occurrence; $2 million aggregate is typical for home improvement
- Workers’ Compensation — required if they have any employees; sole proprietors with no employees may be exempt
The COI should list you as the certificate holder (so you’d be notified if the policy is cancelled). Ask for this — don’t accept a screenshot or photocopy of an old certificate.
Bonding (where applicable)
Some jurisdictions require contractors to be bonded. Check the local building department’s requirements.
Check their track record
Verified credentials matter, but track record matters more. Look at:
Online reviews — but read them carefully
Google reviews and Yelp are useful but easy to game. Look for:
- Volume of reviews (a contractor with 5 reviews is hard to evaluate vs. one with 200)
- Pattern of recent reviews (active business with consistent recent reviews vs. one that hasn’t had a review in 2 years)
- Detail in reviews (specific projects, dates, materials mentioned vs. vague “great work!” reviews)
- How they respond to negative reviews (defensive vs. professional; ignoring vs. engaging)
A pattern of perfect 5-star reviews with no negative reviews can actually be a red flag — every legitimate contractor has at least one unhappy customer over time.
Better Business Bureau
Check the BBB profile. Look at complaint history, the contractor’s responses to complaints, and BBB rating. Pattern of complaints is more telling than the rating itself.
References
Ask for 3 references from projects completed in the last 12 months. Then actually call them. Ask:
- Was the project completed on time?
- Was the final cost what was estimated?
- Were there any surprises or issues during the project?
- How were issues handled?
- Would you hire them again?
- Have you had any post-project issues, and if so, how were they handled?
A contractor who can’t or won’t provide references is a major red flag.
Local presence
Drive by their office if they have one. See their truck. Look for actual signs of a real, established Colorado business — not a PO box, not a residential address, not a number that rings to a personal cell phone with no business presence.
Evaluate the bid
Once you’ve verified the contractor is legitimate, evaluate the actual bid:
Get itemized estimates
A line-item estimate breaks down materials, labor, and major cost categories. Lump-sum bids (“$60,000 to finish your basement”) are hard to compare and hard to dispute later. Insist on itemized bids — any reputable contractor can provide one.
Compare apples to apples
When you have multiple bids, make sure they cover the same scope. Common variations:
- Material grades (builder-grade vs. mid-range vs. premium)
- Inclusion of permits and inspections
- Demolition and disposal
- Cleanup standards
- Warranty terms
- Payment schedules
The cheapest bid is rarely the best deal — it’s usually the bid that left things out.
Look for clarity on scope changes
How are change orders handled? At what rate? What’s the process for approval? Vague language here is a red flag — changes happen on every project, and you want clear terms upfront.
Review the warranty
Material warranties come from the manufacturer (and vary by product). Labor warranties come from the contractor. Both should be clearly written.
Typical labor warranty terms: 1–5 years for most home improvement work. Manufacturer material warranties vary widely (15 years to lifetime depending on product).
Red flags that should end the conversation
A few patterns that mean walk away, regardless of price:
Cash-only deals or “off the books” offers to save sales tax. This is tax fraud and indicates a contractor who isn’t running a legitimate business. It also means you have no recourse if things go wrong.
Pressure to sign immediately. “I have a crew available this week if you sign today” is a sales tactic, not a legitimate scheduling constraint. Real contractors don’t pressure homeowners into same-day decisions on five-figure projects.
Large up-front deposits. Reasonable deposits are typically 10–30% of the project depending on materials needed. A contractor asking for 50% or more up front is a major red flag.
Vague or missing contracts. Every legitimate project has a written contract that specifies scope, price, payment schedule, timeline, materials, warranty, and change order process. If a contractor wants to start work on a handshake or a one-page agreement, walk away.
Pressure to skip permits. Permits exist for safety and legal reasons. Skipping them creates problems at resale and may void your homeowner’s insurance coverage. A contractor offering to “save money” by skipping permits is offering to expose you to substantial future liability.
Inability or unwillingness to provide license, insurance, or references. Self-explanatory.
Asking you to make checks out to individuals rather than the business. Money should go to the business entity. Anything else is a red flag.
Storm chasers. Door-to-door solicitation after major hail events, out-of-state plates, high-pressure tactics, inability to provide local references. Stick with established local contractors.
Offers to “cover your deductible” on insurance work. Illegal in Colorado and a sign of bigger problems.
Questions every homeowner should ask
Before signing any contract:
- How long have you been in business in Colorado?
- Can I see your active license and current insurance?
- Can you provide 3 references from projects completed in the last 12 months?
- What’s your typical timeline for a project like mine?
- What’s your payment schedule, and what’s the deposit?
- How are change orders handled?
- Who’s the primary point of contact during the project?
- What’s the labor warranty, and how do warranty issues get handled?
- Do you pull permits, and is that included in your bid?
- What happens if something unexpected comes up during the project?
A reputable contractor will answer all of these clearly. Hesitation or evasion on any of them is a flag.
Why we built The Project Desk
The reason this checklist is necessary is that the home improvement industry has very low barriers to entry. Anyone can claim to be a contractor. Vetting is mostly the homeowner’s responsibility, and most homeowners don’t know what to look for.
That’s part of why The Project Desk exists. We pre-vet every specialist in our network before we send them a single appointment. We confirm active business registration, licensing, insurance, and references. We track outcomes and feedback over time. Specialists who don’t meet the standard don’t stay in the network.
That doesn’t replace the checklist above — you should still do your own diligence on any contractor before signing a contract. But it does add a layer of pre-screening that most lead-gen sites don’t provide.