How to Pick Remodeling Contractor : Home repair: Choose the individual or company by scrutinizing his or her state license and checking on references, for starters.

Last year, $237 million was spent in Orange County on residential additions and alterations, according to the Construction Industry Research Board, a nonprofit research center in Burbank serving the state of California.

The cost of a home-remodeling job that requires a contractor can range from a few hundred to tens of thousands of dollars.

With so much money at stake, you would think that homeowners would select a contractor with more care than picking out a steak for dinner, but they don’t, says Paige Roush, supervising deputy for the Contractors State License Board in Santa Ana. “The biggest mistake homeowners make is they don’t shop around for their contractor.”

With 5,155 licensed contracting firms in Orange County, selecting the right one for the job is a matter of narrowing the field.

Michele King of Garden Grove hired a person that she thought was a licensed contractor to install a sprinkler system, replant her lawn and remove a tree. When the lawn grew in, it was mostly weeds, the sprinklers were too high for the lawn mower to clear, they leaked, and they didn’t water large sections of the lawn.

“We’re out $2,600 for work we’re having to redo,” King says. “As soon as the workers got paid, they were gone. They won’t come back and fix it. There’s nothing we can do because we later found out they aren’t licensed, so the Contractors State License Board can’t do anything.”

The board can issue a citation or, in some cases, file criminal charges against unlicensed contractors, but it can’t order the contractor to repair faulty work or pay restitution. These options are available only when there’s a dispute with a licensed contractor.

When King hired the contractor, he gave her a card with a contractor’s license number. After calling the license board, King discovered that the license wasn’t his.

“The contractor had been in the neighborhood doing small jobs for so long that he was a familiar face. Nobody thought to check on him,” King explained.

To avoid problems, the license board offers guidelines for selecting a qualified contractor:

Make sure the contractor has a current, valid license. A license number alone is no guarantee. The license may have expired, belong to another contractor or be invalid in other ways. The license board will verify name and address, issuance and expiration date, names of personnel authorized to use the license and whether a bond has been posted. Call (714) 558-4086 for verification.

Gather written bids from at least three different contractors. All bids should be based on the same plans and specifications. Don’t automatically accept the lowest bid; ask the other contractors to explain their higher bids. They may have included costs, such as higher-quality material, permits and licensing, that the contractor who submitted the lower bid didn’t include.

Call references and ask: Were you pleased with the completed work? Did the contractor finish on time? Did the contractor willingly make any changes or corrections?

Make sure that the contractor has Workers’ Compensation and liability insurance. If the contractor does not carry this coverage, the homeowner is liable for any injuries resulting from work done on his property.

A copy of an information booklet, “What You Should Know Before You Hire a Contractor,” can be requested by calling the license board’s Santa Ana district office at the above number.

Once a contractor has been selected, the written contract becomes the foundation of the owner-contractor relationship.

“The terms in the contract are for the owners protection,” says Jim Futrell, who teaches a course on “Controlling Construction Costs” to contractors and homeowners at Saddleback College in Mission Viejo.

Homeowners should look at what Futrell calls the “three magic words” in a contract: cost, quality and time. The contract should itemize costs, the quality of the materials to be used, and the start and completion dates.

Other concerns that need to be in writing are insurance coverage, payment schedule and the method of implementing changes once the work has begun.

“The additional time and additional costs, due to those little things the homeowner wishes to add, cause the most ill feelings between the contractor and homeowner,” Futrell says. “There’s nothing wrong with changing things, but you should know how much it’s going to cost before you start the change, and put that in writing in the contract.”

If you communicate with the contractor from start to finish, and agree on the cost, quality and time, you shouldn’t have a problem, Futrell says, adding:

“Hiring a contractor does not have to be an unpleasant experience.”