Contractors can make the process of completing a home remodeling project quite pleasant…or an outright nightmare. So choose carefully. And if you choose to hire unlicensed contractors, make sure you’re aware of the applicable laws in your state…as well as the potential risks and liabilities you’re assuming.

Even if you prefer to do it yourself (DIY), there will be times when you need the services of outside contractors. One way to save money is to act as your own general contractor and deal directly with subcontractors and skilled labor, although you must be prepared to handle a lot of associated headaches. You can try to beat around the bush to get high-quality workers at reasonable prices on your own. It has worked well for me. For example, I learned that our industrious maintenance gardeners were also proficient in fencing, plumbing, irrigation, grading, and masonry. Ask through your network of friends and neighbors. Also, I’ve met some good workers chatting up the crowd on my trips to the local home improvement store (be sure to ask for references though!).

However, I would not suggest doing it this way in major renovations or new construction; it’s too much for an amateur to handle. But it’s worked for me on the smaller update, upgrade, and upgrade projects I focus on (although I’ve had my share of bad experiences).

Keep in mind that if the workers you hire are not licensed, bonded, or insured, or if they are not legal residents, you could risk getting entangled in legal or liability issues, not to mention ethical issues. If you hire unlicensed workers, be sure to check your state’s laws. For example, in California, any contractor paid more than $500 for a job is technically required to be licensed by the state board. Also, unlicensed contractors are not covered by state worker’s compensation. The California State Contractors Licensing Board (cslb.ca.gov) recommends that homeowners get at least three offers, ask to see their license, and be wary of door-to-door solicitors.

You can certainly save a lot of money by acting as your own general contractor and hiring your own licensed or unlicensed specialized subcontractors. However, when you use unlicensed workers, you can end up spending a lot more if you have to bring in people later to fix the problems. So make sure you have confidence in who you hire, especially for plumbing and electrical, where the consequences of shoddy work can be catastrophic and likely place the responsibility squarely on your shoulders.

Let me leave you with one more piece of advice. Try to avoid paying any contractor upfront, for building materials or anything else. There’s nothing worse than having a contractor start the demolition stage, but then leave their project idle for days at a time because another (seemingly more important) client needs them to do a new project or repair an old one. You won’t be in a position to fire him and bring in someone else if you’ve already paid him a lot of money upfront, and meanwhile his house is still a mess from the demo. In other words, don’t give away all the leverage!

Look for simplicity, comfort and value!