The good news is that with the current state of the economy there is an excellent chance that you may get your remodeling project done for less money than if you had done it several years ago. Contractors are not as busy as they were, and many are looking for additional workload. The bad news is that there are many people floating around claiming to be contractors who aren't. You want to make sure that the people who are working on your project are professional contractors, not just from a quality stand point, but also from a safety standpoint--yours and theirs.

Prior to allowing anyone who claims to be a contractor to work on your home, or even enter your home, follow these tips.

1. References, References, References
It can't be said enough, references are an extremely important step in hiring a contractor. Call people the contractor has worked for in the past and find out if the customers are happy. If possible, find projects they are working on and inspect their work yourself. Find out where the contractor buys materials, and call the store to find out if the contractor is up to date on payments.

Talk to your local building department inspectors to find out if they have had a problem with the contractor's work, if the contractor has been in business for awhile there is a good chance they have inspected the contractor's past work. Consider online remodeling sites that screen their contractor members in great detail.

2. Get It in Writing
Talking is great, everyone wants to get along, but once the talking is done get it in writing. Have your contractor give you a written estimate, then go over it item by item. If you can think of any questions or costs that should be a part of the estimate and aren't ask them to be added. Once you are okay with the estimate, ask the contractor to prepare a written contract with a Scope of Work. The Scope of Work should spell out exactly what the contractor is going to do for the amount you are paying them. There should be no gray areas or reading between the lines; both you and the contractor should sign it; and it should be attached to your copy of the contract.

Make sure the contract spells out labor rates and overhead percentages that will be added for any extra or additional work, and that there is a written time frame for the project. The Contract should specify that you are to be notified before any work is done or materials are provided that are not a part of the agreed upon project cost.

The contract should include a payment schedule if your project is large. A significant amount of the funds should be held back until the project is complete, and it is a good idea to keep 5 or 10 percent back until 30 days after the project is complete to ensure the contractor returns for any needed adjustments.

3. Verify Liabilities Are Covered
Ensure that the contractor is properly licensed and insured by asking for copies of their contractor license number and their liability and workman's compensation policies. Call and verify that the license and policies are in place and the amount of the liability policy. The last thing you want is to find out you are liable for injury costs or damage caused by a construction crew working on your home.

If you have a large project you may want to consider having lien waivers signed when issuing payments, and you may want an attorney to review the Contract prior to work starting.

Following these three tips will help to ensure that you have a reputable contractor working on your home who will preform a high quality job.

With the state of the economy and most real estate markets moving slowly at best, there's little doubt that buyers remain in the driver's seat when it comes to home improvement projects. Still, you may be hesitant to jump into a remodel in the middle of an economic downturn. If you've got the resources, take a serious look at remodeling your home even as other homeowners look the other way.

You might be surprised by some of the reasons you should remodel right now:

• Money for Remodeling Is Available. The banking industry has been a bit of a roller coaster over the past couple of years. However, in spite of the rumors you may have heard, banks are not sitting on their money. In fact, if you have a steady income, good credit, and a good amount of equity in your home, you should be able to get a loan without too much trouble. Yes, lenders are losing money with bad loans and foreclosures, but they're also looking for ways to balance that activity with positive, reliable activity. Money is cheap--if you have good credit, income, and 20 percent equity--you can still get a loan.
  
  
• You'll Be Able to Find and Afford a Good Contractor. In the height of the housing boom several years ago so many homeowners were using their home equity and savings to remodel that finding a reliable contractor often seemed impossible. A boom in business also led to some shady characters and unreliable contractors jumping into the mix. The good news is that that good contractors are probably still in business, and most of the bad contractors have dropped out of the scene. Increased competition for jobs among the remaining contractors means that the price you end up paying should be reasonable.
  
  
• When the Market Picks Up, You'll Be Ready. More than likely, you're planning to stay in your home for a while. So why not complete your desired upgrades now and enjoy them while you're staying put and you know prices will be competitive? That way, when real estate turns around and you need to move out of town or want an upgrade, your home will already be remodeled and market-ready.
  
  
• You Can Take Advantage of Rebates and Tax Credits. Check out some of the significant tax credits that the Federal government offers for energy-efficient building products and appliances at the EnergyStar Web site. You could get back a significant amount from the cost of new windows or solar panels or water heaters, for example. Do it now, and these products can save you money on your monthly energy bills and on your taxes next April. As part of the Federal stimulus package, states will soon implement brand new rebate programs for many energy-efficient products, as well. Stay tuned for those starting at the end of 2009 and early in 2010.