The Risk of Not Checking Contractor References Thoroughly

If you only call the two or three glowing references a contractor hands you, you’re seeing the highlight reel, not the full season. I’ve walked job sites where the online reviews looked great, the estimate looked fair, and the references sang—but the framing was crooked, the draw schedule was a mess, and the homeowner was stuck paying for a redo that cost more than doing it right the first time. Thorough reference checking isn’t about being suspicious; it’s about verifying the team that will be swinging hammers and managing your money. The risk of not doing it is real: blown budgets, timeline blowouts, quality issues, insurance headaches—and the stress that comes with trying to fix problems after money has changed hands.

Why references matter more than online reviews

Online reviews help, but they’re snapshots without context. A contractor can have a 4.8-star rating while running into serious issues on projects like yours. Here’s why deep reference checks make a difference:

• Scope match beats star ratings. A contractor who shines on basic kitchens might not be equipped for structural changes, additions, or high-performance building details.
• The crew matters as much as the owner. The person you met may not be on your job every day. References reveal who actually runs the site and how decisions get made under pressure.
• Money management isn’t visible online. You can’t learn from Yelp how they handle draws, change orders, supplier accounts, or Lien Waivers.
• Timing realities are hidden. Reviews don’t say whether the job finished three months late or required the owner to manage trades. References will.

Think of references as interviewing multiple “former bosses.” You’re hiring for one of the most complicated, expensive projects of your life; your due diligence should match the stakes.

What can go wrong if you don’t check thoroughly

Skipping or skimming references turns unknowns into risks. Here’s what those risks look like in real life.

1) Cost blowouts and surprise change orders

• In residential remodels, a 10–15% contingency is common. With a poor fit, I’ve seen change orders push 25–40%, especially when scope wasn’t nailed down and the contractor’s estimating was weak.
• Autodesk/FMI research has shown rework can eat around 5% of project cost on commercial jobs. On homes, sloppy planning and poor communication can push that even higher because fixed overhead (permits, mobilization, design fees) gets spread over a longer timeline.

Common causes:

• Vague contracts and allowances that are too low
• Unclear scope around hidden conditions
• Poor coordination among subs
• Underbidding to win, then recouping with change orders

2) Schedule drift and carrying costs

A two-month delay on a typical addition can mean:

• Extra rent or storage: $1,500–$4,000
• Additional interest on a construction loan: $1,000–$3,000
• Lost time and productivity: priceless, and very real

Delays multiply when the GC is juggling too many jobs or relies on subs who prioritize other projects.

3) Quality and code problems you can’t see until it’s too late

Examples I’ve encountered:

• Improper window flashing that didn’t leak for 8 months, then caused $35,000 in interior repairs and siding removal.
• Tile installed without proper substrate prep—looked great for photos, cracked six months later.
• Non-compliant stair railing heights or treads—failed final inspection, cost weeks to redo.

4) Insurance and liability exposure

If a contractor’s workers’ comp or liability insurance is lapsed or insufficient, you can be on the hook for injuries or property damage. The National Council on Compensation Insurance (NCCI) reports average lost-time workers’ comp claims around $40,000+ in recent years. Without proper coverage in place, that can land at your feet.

5) Mechanic’s liens and supplier disputes

Even if you pay the contractor, unpaid subs or suppliers can file liens against your property. If your GC has a shaky payment history, that risk skyrockets. Untangling liens can delay refinancing or closing when you sell.

6) Stress and strained relationships

Construction is already an emotional rollercoaster. A mismatched contractor amplifies every bump—decision fatigue, surprise costs, no-shows, and finger-pointing between trades. I’ve seen marriages waver under the pressure of a bad build.

Real-world mini case studies

• The addition that doubled in cost: A family hired a small GC on a $180,000 addition. Three references said “great guy,” but none had done structural tie-ins. No supplier references were checked. Framing mistakes led to structural changes, and mechanical rerouting was botched. Final cost: $330,000. Project ran five months over.
• The “perfect” kitchen with a hidden problem: A kitchen remodel looked flawless on day one. Six months later, cabinet doors warped—no acclimation before install, and no moisture barrier. The contractor had two glowing references from old jobs but had since changed cabinet suppliers. Homeowner paid $9,800 out of pocket to remedy.
• The lien surprise: A homeowner paid every invoice on time for a $95,000 exterior overhaul. The GC didn’t pay the siding supplier and walked off mid-job. The supplier filed a lien for $28,000. A simple vendor reference call would have exposed a history of slow pay and credit holds.

How contractors curate references (and how to get past the highlight reel)

Most contractors give you:

• Two or three past clients they know will say nice things
• A few photos of finished work
• Maybe a letter or two

That’s a start, not the full picture. To see the real track record:

• Ask for recent and in-progress clients, not just the greatest hits.
• Ask for three suppliers and two key subs (e.g., electrician, plumber) you can call directly.
• Request a project list with dates, scope, and addresses (you can verify permits).
• Ask to see one current job site and one completed project—same scope as yours.

If they resist all of the above, treat it as a data point. Professional outfits expect this level of vetting.

A step-by-step system for checking references thoroughly

Here’s a simple, repeatable process I use for owners and developers. Block out a week. It’s worth it.

Step 1: Build the right reference mix

Ask for:

• 3–5 past clients from the last 18–24 months, similar in scope to your project
• 1 current client (active job within 10 miles if possible)
• 2 key subcontractors who’ve worked with the GC for at least a year
• 2 suppliers (lumberyard, drywall, roofing, cabinet shop, concrete supplier)
• Insurance agent and surety/bonding agent (if bonded; for larger jobs)
• Building official contact for a recent permitted job

If a contractor is new, see the “New contractor” section below for alternatives.

Step 2: Prep your questions

Don’t wing it. Use a standard set so you can compare apples to apples. Keep it conversational but specific.

Focus areas:

• Scope and quality: Was the work aligned with your project type?
• Schedule and staffing: Who ran the job daily? Were subs on time?
• Money management: Were bills accurate? How were change orders handled?
• Communication: Did they answer calls? Did they bring problems early?
• Closeout and warranty: Punch list speed? Post-completion responsiveness?

You’ll find question lists later in this article, tailored for each reference type.

Step 3: Verify the job exists and the person you’re calling

• Ask for the project address and permit number.
• Cross-check the name and phone number via public records, LinkedIn, or an email from a domain that matches the business (for suppliers/subs).
• For past clients, a quick Google Street View can confirm the project looks as described. Not perfect, but helpful.

Step 4: Call strategy and note-taking

• Schedule 15–20 minutes per call; let them know your project size and timeline so they can respond in context.
• Tap-to-record? Don’t, unless your state allows and you have consent. Instead, take notes in a simple spreadsheet: question, score (1–5), comments, examples.
• Ask for examples, not adjectives. “They were great” means little; “They caught a framing discrepancy on day two and reworked it without charging us” is gold.

Step 5: Score objectively

Use a simple rubric (1–5) for each category:

• Quality, Schedule, Communication, Financial Management, Problem-Solving, Closeout/Warranty

Flag any category with scores under 3 for follow-up questions or a second reference in the same category.

Step 6: Triangulate and decide

• Compare stories across clients, subs, and suppliers.
• A single negative data point isn’t fatal; a pattern is.
• If you see gaps (e.g., no similar-scope past clients), don’t ignore them. Adjust contract terms, payment schedules, and oversight accordingly—or pick another contractor.

Who to call and what to ask

Here are targeted questions that reveal how a contractor behaves when things get messy.

Past clients (completed within 18–24 months)

Ask:

• What was your scope and contract type (fixed price, cost-plus, time and materials)? What was the original budget and final cost? Why did it change?
• How long was the original schedule vs. actual? What caused delays?
• Who was the day-to-day site lead? How often was the owner on site?
• How did they handle surprises or change orders? Did they bring options and costs before proceeding?
• Any Warranty Issues after completion? How quickly were they resolved?
• Did you ever feel you had to manage subs yourself?
• How clean and safe was the site? Any damage to your property?
• Would you hire them again for the same scope? What would you do differently?

Red flags:

• “We paid allowances on everything” without clarity on actual selections and costs.
• “They were hard to reach for weeks.”
• “We handled permits ourselves” on a job that should have been permitted.

Current clients (active job sites)

Ask:

• What’s the current schedule, and are they on track?
• How often is the GC on site? Who leads day-to-day?
• How do they handle inspections and corrections?
• Have they asked for payment ahead of milestones?
• Would you let me swing by the site for 10 minutes this week?

What to look for on a site visit:

• Orderly site, materials covered, extension cords safely run
• Plans on site, marked up; inspection stickers visible
• Labeled circuits, protected openings, flashing/waterproofing in progress that looks methodical
• Crew wearing PPE; ladders tied off; tools stored end of day

Subcontractors (electrician, plumber, framer)

Ask:

• How long have you worked with this GC?
• How do they schedule and coordinate trades?
• Do they pay on time per your contract terms?
• Do they rush work or allow proper prep and inspections?
• Would you prioritize their project over others? Why?

Red flags:

• “We used to work with them” = they stopped for a reason—dig in.
• “They juggle too many jobs; we get pulled off and on.”
• “We require payment upfront” on standard trades—suggests the GC has cash flow issues.

Suppliers/vendors (lumberyard, drywall, roofing, custom cabinets)

Ask:

• How long have they had an account?
• Are they current? Any holds in the last year?
• Do they return extras/handle damages professionally?
• Would you extend them credit on a large order?

Red flags:

• “Cash on delivery only” or “We had to put their account on hold.”
• Frequent returns due to misorders—signals poor planning.

Building officials/inspectors (where allowed and appropriate)

You won’t always get detailed opinions, but you can confirm:

• Were there permits under this GC for [project type] at [address]?
• Were there multiple failed inspections or re-inspections?
• Any stop-work orders or code violations?

Always be respectful of their time and rules they must follow. Sometimes simply confirming the permit trail tells you plenty.

Insurance agent/surety

You’re verifying insurance, not judging character:

• Ask for a certificate of insurance sent directly from the agent, naming you as additional insured for your project and location, with proper limits.
• For bonded projects, ask the surety if they’ve written performance/payment bonds and whether there’s any history of claims. They may be limited in what they can share, but even tone and responsiveness are telling.

Interpreting answers: what’s normal vs. what’s risky

Construction isn’t perfect. Expect hiccups. Here’s how to read the tea leaves.

Normal hiccups:

• A few schedule slips due to weather or backordered materials, explained with documentation.
• Isolated workmanship issues corrected quickly.
• One slow pay to a supplier during a known cash crunch that got resolved.

Risky patterns:

• Multiple clients mention they had to chase the contractor for updates or invoices.
• Suppliers report holds or COD terms on more than one occasion in the past year.
• Subs refuse to prioritize their work or say they haven’t been paid per contract.
• The project manager’s name keeps changing during the job story.
• Vague answers about who pulled permits or passed inspections.

Verifications outside of references

References are half the picture. You also want hard facts.

License and complaints

• Check state license boards (search “contractor license lookup [your state]”).
• Confirm the exact business name, license number, status, classifications, and expiration.
• Look for disciplinary actions or complaints. Some states post them publicly.

Insurance and bonding

• Ask for COI direct from the agent, not the contractor. Verify:
• General liability (typical minimum: $1M per occurrence, $2M aggregate)
• Workers’ comp (or exemption if they truly have no employees—be cautious; “1099” doesn’t equal no employees)
• Auto liability if they move materials
• For larger projects, ask about performance and payment bond capacity. If they can’t bond, adjust risk management accordingly.

Permits and inspections

• Search your local permit portal by contractor name to see project history.
• Verify that similar projects have been done and closed out successfully.
• Frequent expired permits or failed inspections can signal an issue.

Lien and court searches

• County recorder or clerk’s office: search for mechanic’s liens involving the contractor or their business entities.
• Small claims and civil court: search the company and principal’s names for lawsuits related to construction.
• UCC filings: can hint at financing or supplier claims (more relevant for larger contractors).

Online reputation signals (interpreted correctly)

• Look for patterns across multiple platforms, not just star ratings.
• Pay attention to specific complaints (payment issues, communication lapses) rather than one-off rants.
• Verify that photos across website/social match the contractor’s stated projects. A quick reverse image search can catch borrowed or stock images.

Costs and timeframes of proper due diligence

Thorough vetting isn’t free, but it’s cheap insurance.

• Time: Expect 6–10 hours over a week. Three evenings for calls, a Saturday site visit, and an hour for verification.
• Out-of-pocket costs: Usually $0–$200. Most checks are free. You might pay for:
• Document copies or detailed court searches
• Consulting a construction attorney for an hour if something seems off
• Potential savings: Avoiding one major problem can save 10–30% of your project budget, plus months of stress.

If your project is $150,000, saving even 5% is $7,500—more than worth a few evenings of legwork.

Using reference feedback to shape your contract

References don’t just help you pick a contractor; they guide how you structure the job.

• If subs mention coordination gaps: Require a detailed construction schedule with weekly updates and penalties for missed milestones (or incentives for early completion).
• If money management feels shaky: Tie payments to inspected milestones with signed lien waivers from all tiers. Consider a escrow service or title company disbursements.
• If scope creep was common: Invest in preconstruction—complete drawings, specifications, and selection schedules before mobilization. Use realistic allowances with known vendors.
• If warranty responsiveness was weak: Add a holdback (e.g., 5% retained until final completion) and a written warranty response time (e.g., 5 business days to assess, 30 to fix).

Common contract tools to consider:

• Fixed-price Contract with a detailed scope and exclusions
• Allowances defined with named vendors and unit costs
• AIA-style progress payments and lien waiver sequences
• Exhibits: schedule, selections list, responsibility matrix, insurance requirements, cleanup and protection requirements

Consult a construction attorney for template selection; small investments here protect you from expensive surprises.

Special cases and how to handle them

Storm chasers and out-of-town crews

After storms or disasters, you’ll see pop-up contractors. Some are solid; many are not.

• Verify local licensing and insurance in your jurisdiction, not theirs.
• Ask for at least two local suppliers or subs they’ve worked with in your area.
• Bigger deposits and pay-upfront demands are common red flags—avoid them.
• Require permits and inspections. No permit, no work.

New contractor or new to the area

Everyone starts somewhere. If you like a newer contractor:

• Ask for references from previous employers or projects where they were a lead superintendent or project manager.
• Call subs and suppliers—they tell you how organized and financially reliable the GC is.
• Start with a smaller phase or pilot scope. Make it a paid, discrete package like demo and framing on an accessory space.
• Tighten payment terms and oversight, and keep contingency at the higher end (15–20%).

Design-build vs. design-bid-build

• Design-build can be fantastic, but you’re betting on one team to handle design coordination too. Ask for references that speak specifically to design quality, permitting success, and how they handled design changes midstream.
• With design-bid-build, verify that the GC has deep experience with your architect’s level of detail. Ask the architect for their own short list of builders.

Commercial vs. residential

Commercial contractors may be great at schedule and site management but unfamiliar with residential finishes, client expectations, or municipal inspection quirks for homes. Confirm residential experience if your project is a house or multifamily.

Practical checklists, scripts, and tools

Here’s a quick-start kit you can copy into your notes app or spreadsheet.

Reference mix checklist

• [ ] 3–5 past clients (last 18–24 months, similar scope)
• [ ] 1 current client and site visit
• [ ] 2 key subs (electric and plumbing at minimum)
• [ ] 2 suppliers (lumberyard and specialty vendor)
• [ ] Insurance agent COI (sent directly)
• [ ] License lookup and permit history
• [ ] Lien and court search (name variants too)

Call script opener

“Hi [Name], my name is [Your Name]. I’m considering hiring [Contractor] for a [scope] project in [city]. They listed you as a reference. Do you have 10–15 minutes to share your experience? I’m specifically interested in schedule, quality, and how they handled changes.”

If they’re rushed: “No problem—what’s a better time? I’ll email a short list of questions and you can reply with bullet points if easier.”

Email prompt for suppliers/subs

Subject: Quick reference for [Contractor Name]

“Hi [Name], I’m vetting [Contractor] for a residential [scope] project. Could you share:

• How long they’ve been a customer
• Whether they’re current on their account
• How they handle orders, returns, and scheduling
• Whether you’d prioritize their orders/jobs

Thanks in advance—I’ll keep this brief.”

Spreadsheet columns

• Reference type (client/sub/supplier/inspector)
• Project scope and year
• Quality (1–5)
• Schedule (1–5)
• Communication (1–5)
• Financial management (1–5)
• Problem-solving (1–5)
• Closeout/warranty (1–5)
• Notes and quotes
• Red flags
• Follow-up items

Scoring rubric guide

• 5: Proactive, transparent, met or beat plan, fixed problems fast, would rehire enthusiastically
• 4: Good overall, minor hiccups managed well, would rehire
• 3: Mixed; some issues, acceptable outcome with owner effort
• 2: Multiple issues requiring owner intervention; hesitant to rehire
• 1: Serious issues; would not rehire

Common mistakes to avoid

• Calling only curated references. Ask for the mix described earlier.
• Not checking recent work. A contractor can coast on old wins while the current team struggles.
• Ignoring suppliers. Vendors reveal payment discipline and forecast problems.
• Failing to verify insurance directly. Certificates forwarded by contractors can be outdated.
• Relying on social media photos. Verify locations and permits.
• Rushing. Taking a week to vet beats taking months to recover from mistakes.
• Confusing personality with process. A friendly contractor without systems is risky; a slightly blunt one who runs a tight ship is often a better bet.
• Skipping a jobsite visit. You learn more in 10 minutes on site than in 10 emails.

What if you’ve already hired and didn’t check references?

If you’re mid-project and worried, don’t panic. Act fast.

Early warning signs:

• Vague invoices, front-loaded draw requests, or pressure to pay ahead of milestones
• Crew churn; the foreman changes weekly
• Subs showing up asking you about payment
• Missed inspections, failed rough-in checks, or no permits visible
• Poor site protection; water gets in, dust everywhere, unsafe setups

Actions you can take:

• Pause and assess. Request a written two-week look-ahead schedule and a budget-to-complete report.
• Tie further payments to specific inspections and deliverables, with lien waivers.
• Bring in a third-party inspector or experienced owner’s rep for a half-day review. Money well spent.
• If insurance or licensing looks suspect, contact your attorney immediately to adjust course.
• Consider a negotiated exit if trust is broken. Better to stop at 30% than barrel into a 100% disaster.

A realistic timeline for reference checking

You don’t need months. Here’s a workable one-week plan that fits around work and family.

• Day 1: Request the reference package, permit list, COI from agent, and supplier/sub contacts.
• Day 2: License lookup, permit search, quick court/lien scan.
• Day 3: Call two past clients and one supplier.
• Day 4: Call one sub and one current client; request a site visit.
• Day 5: Visit job site over lunch; take photos of organization and protection.
• Day 6: Call remaining references; consolidate notes, score objectively.
• Day 7: Decide your go/no-go or what contract protections to add.

How deep to dig based on project size

• Under $25,000: Two past clients, one supplier, license and insurance checks, one quick permit search. Half-day of work.
• $25,000–$150,000: Full mix as outlined; site visit; detailed contract exhibits. One week.
• $150,000+: Add bonding capacity inquiry, more supplier references, and consider an owner’s rep for a pre-award meeting.

Red flags you shouldn’t rationalize away

• Requests for large deposits (over 10% or more than the cost of special-order materials) before mobilization
• Refusal to provide supplier references
• Inconsistent business names across documents
• Unwillingness to commit to a schedule update process
• Vague or defensive answers about past disputes
• Heavy pressure to sign now for a “limited spot” without allowing due diligence

Personal insights from the field

A few patterns from two decades around residential and light commercial work:

• The best contractors welcome smart questions. They know good clients ask them.
• The best subs speak highly of the best GCs because they’re organized and pay on time.
• The most expensive bid isn’t always the best, and the lowest bid is frequently the costliest. The right price is the one attached to a detailed scope, a realistic schedule, and a team with a track record you can verify.
• People change. A contractor who was great five years ago might have grown too fast or lost key staff. Recent references matter most.
• Good builders make fewer promises and deliver more. The ones who promise everything up front often struggle to keep pace once demolition starts.

Frequently asked concerns, answered

• “Won’t I annoy references?” Most are happy to share. Be concise and respectful of their time.
• “What if a contractor refuses supplier references, citing privacy?” Ask them to have their supplier call or email you confirming account status. There’s a way if they’re current.
• “Isn’t this overkill for a small job?” Scale your effort, but don’t skip the basics—license, insurance, at least one client, and one supplier reference.
• “How do I verify photos?” Ask for addresses and permit numbers; verify time-stamped inspection logs; do a reverse image search if something seems off.

Final practical steps you can take this week

• Build your reference checklist and question list in your notes app.
• Ask each contractor on your shortlist for the full reference mix.
• Schedule one current job site visit.
• Verify insurance directly from the agent.
• Request a sample pay application and lien waiver forms they use.
• Create your scoring spreadsheet and stick to it. Feelings are fine; data decides.