The urge to remodel one's living space seems to be an innate instinct, or at least a popular pastime. Sometimes it seems to work out that it gets put off until the homeowner is ready to sell. "Why didn't I do this before?" is a familiar refrain. Regardless of whether you are doing the work for your own use or in order to prepare the property to be sold, you still need to make the wisest use of your remodeling budget.

Owning a home is a business with high stakes. If you are not cautious, you could over-invest. A remodeling job might be for a single room, the outside, or the whole property. Hiring a contractor is key to getting a quality job accomplished at a fair price. The criticality of selecting the right contractor for the job cannot be emphasized too much.

According to the Federal Trade Commission (FTC), homeowners should watch out for the tricks of so-called companies. The FTC lists these warnings that your hired help may be trouble:

* Requires cash
* Pushes for a quick decision
* Offers a price break for finding customers
* Wants the money before finishing the work
* Just happens to have extra supplies left over from another job
* Asks you to obtain the city permits yourself

Those are signs that you should walk away. Sometimes these con artists will also try to get you to borrow from a company that they recommend. At the extreme, a home loan scam could leave you homeless.

There are a few key steps that you should take to avoid being taken advantage of. Interview your prospective contractors thoroughly. The FTC suggests that you ask about the length of time they have been doing business, their license details, and insurance. Check with the permit office to find out what you need to know about applicable permit laws. You might even be able to get a tip from someone in the office.

Another important tip is asking for references. Not only should you collect a list, but you should check. Ask the people about the quality of the job and service.

Payment terms must be clear before the job begins. In some jurisdictions there are limits on how much higher the actual cost of a project is allowed to be from the contract estimated cost. Check into the laws where your work will be done.

This information was furnished by Colorado's Boulder real estate specialists of Automated Homefinder.