The Federal Trade Commission (FTC) offers a range of practical consumer tips on hiring a contractor, and here's a rundown from Lemuel Dowdy, FTC staff attorney in Washington, D.C. First of all, says Dowdy, "Interview each contractor you're considering for a job, and do it face-to-face."

Dowdy notes that consumers should ask questions and find out ...

• How long has that contractor been in business? Seek out a well-established company and check into its track record out with consumer protection officials to see if there are unresolved consumer complaints on file. Bear in mind that no record of complaints against a particular contractor doesn't always mean that there were no previous consumer problems. There could be existing problems that have yet to be reported, or perhaps the contractor conducts business under several different names.

• Is the contractor licensed and registered with the state? Most states license electrical and plumbing contractors, but only 36 states have some kind of licensing and registration statutes affecting contractors, remodelers, and/or specialty contractors. "Get their license number and check with state authorities to make sure that license is still in effect," said Dowdy. The licensing can range from simple registration to a detailed qualification process. Also, the licensing requirements in one location could be different from the requirements elsewhere in the state. Contact your local building department or consumer protection agency to learn about licensing requirements in your area.

• How many projects like yours has the contractor completed in the last year? Ask for a list. This will help you determine how familiar the contractor is with your type of project.

• Will this particular project require a permit? Most states and localities require permits for building projects, even for simple jobs like decks. A competent contractor will get all the necessary permits before starting work on your project. Be suspicious of any contractor that asks you to get the permit(s). It could mean that the contractor is not licensed or registered, as required by your state or locality.

• Does the contractor have a list of references from your contractor? The contractor should be able to give you the names, addresses, and phone numbers of at least three clients who have projects similar to yours. Ask each how long ago the project was completed and if you can see it. Also, tell the contractor that you'd like to visit jobs in progress.

• Will subcontractors be used on this project? If yes, ask to meet them, and make sure they all have current, adequate insurance coverage and licenses, if required. Also ask them if they were paid on time by this contractor. A "mechanic's lien" could be placed on your home if your contractor fails to pay the subcontractors and suppliers on your project. That means the subcontractors and suppliers could go to court to force you to sell your home to satisfy their unpaid bills from your project. Protect yourself by asking the contractor, and every subcontractor and supplier, for a lien release or lien waiver.

• What types of insurance does the contractor carry? Contractors should have personal liability, worker's compensation, and property damage coverage. Ask for copies of insurance certificates, and make sure they're current. Avoid doing business with contractors who don't carry the appropriate insurance. Otherwise, you'll be held liable for any injuries and damages that occur during the project.