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Your instinct might be to select the lowest bid. However, you should be careful. Someone with a very low bid might try to cut corners or do shoddy work.  A contractor with a low bid might also not have much work. As of 2016, the home building business is strong, so there should be plenty of work to go around for a competent contractor. Avoid choosing someone you can’t afford. Instead, look at contractors who submit reasonable bids that you are comfortable with. You should avoid paying for the entire project before it is completed. Furthermore, your state law might limit how much you can pay upfront. Discuss a payment schedule with the contractor.  Research your state law by contacting a local consumer protection agency, which you can find in the phone book or online. Regardless of your state law, try to limit the amount of any down payment to no more than a third. Ideally, you should not pay with cash. If the project is small, then think about paying with a credit card or personal check.  Tie payment to certain benchmarks. For example, if you are having a home built, you can pay a certain amount once the foundation is laid, and another sum after the roof has been put on, etc. Using benchmarks is helpful, because the contractor doesn’t get paid if work is delayed. This provides incentive to work diligently. Call up the contractor you feel most comfortable with and hire them. Then make sure you have a detailed contract in place before any work begins. The contractor might draft the contract. If not, then you can hire a lawyer to draft the contract for you. If costs are a concern, then you might need to draft your own. Make sure the contract contains the following:  a detailed description of the work, including a complete set of drawings with written specifications the brand of materials that will be used or installed the start and finish dates the payment schedule any guarantees your signature and the contractor’s signature
Analyze the bids. Discuss a payment schedule. Sign a contract.