Fundamentals Validate that the contractor is licensed, bonded, and insured through the Contractors State License Board. You don’t want to take on any liability yourself by hiring an unlicensed contractor. Any accidents could go against your home owner’s insurance policy. Do they only do permitted work so you know the work was done correctly? Unpermitted work can lead to faulty construction, fines, future problems (damage, fire, unsafe ventilation, mold, dry rot, etc.) and difficulties with resale.
Referrals & Ratings Validate that the contractor being considered has good referrals. Ask on the neighborhood blog NextDoor and see who your neighbors recommend. Check their rating on Yelp. Check with the Better Business Bureau. Check their rating on Houzz. Make sure this contractor has good reviews and referrals.
References Get references from the contractor of their current projects and most recently finished work. Not work that is years old. Find out from their current clients what it is like working with them now.
Operations Do they stay on the job until it is finished or do they have gaps in work productivity where your project could be stalled (costing you more money and time)? Do they hit their clients with unexpected change orders or stay within schedule and budget? Do they use day labor? Do they use licensed sub-contractors? You want to avoid day labor and unlicensed sub-contractors to avoid any personal liability. How many jobs do they manage at any given time and can they effectively handle that many projects at one time?
Communications How do they communicate with their clients? Do they have a detailed work schedule? Do they meet on a regular basis with their clients providing progress reports, upcoming tasks, and any challenges? Are they responsive and reachable? Do they use email, text, cell phone, etc.?
Cleanliness Do they treat their job sites as guests in your home? Do they install protection to keep construction contained? Do they keep a clean job site to help prevent injury and disruption of your daily routine? Do they keep their trucks and equipment out of your way? Do they remove all debris and tools from your job site when the job is complete or do they leave things for their clients to deal with?
Good Neighbor Are they good for your neighborhood? The contractor will only be there during the project duration. Do they minimize neighborhood disruption and irritation so you maintain good relations with your neighbors after they are gone? What do they do to mitigate neighborhood impact?
Collaboration Do they collaborate with their clients? Are their clients included in decisions when issues arise? Do they provide options to solve any issues with schedule and cost impacts? Do they make recommendations on ways to save money in the long run and / or improve convenience and functionality (e.g. natural gas hookup for BBQ while wall is open, separate pantry for food allergies, deeper cabinets for baking pans, etc.). Do they listen to their clients helping to focus on highest priorities? Do they make adjustments to their operations to accommodate their clients?
Warrantee & Customer Service Do they stand behind their work? Do they return to fix the little things that pop up after a job is complete? For example do they return to adjust cabinets and touch up as needed?
Quality What is the quality of their work? Do they make sure their work blends with your current home so guest cannot tell what was changed / added to? Do they blend their work with the existing (e.g. cutting rafter tails to match existing thickness, feathering in stucco and sealing new stucco to match existing, etc.)?
Proximity Are they local so they can provide timely service to your job? Do they know the local authorities? What is their reputation with your city? Do they pass their inspections the first time?
Experience
How long have they been in business? The longer they have been in business the greater the likelihood they will be around for your entire job. Do they have experience performing work like you want to do or will they be learning on your job adding to costs, schedule, and surprises?