For a full tutorial, be sure to check out this post

2. Beware of door to door salesmen. This may be a generalization, but it's likely that if you did not make the initial contact with a contractor, you are more inclined to run across an illegitimate company. This is especially true after a storm, when regions can see an influx of out of town contractors.

3. Inquire if your state, city, or municipality requires a contractor license, or a business license. Holding a license such as this proves the legitimacy of the business. You can ask a contractor anytime if they have a license, and also to provide the documentation. If they cannot provide a legitemate document, do not hire them.

4. Always make sure contractors are fully insured with general liability and workman's compensation insurance. Don't just ask... obtain a current copy of the insurance certificates prior to any work being started!!!

5. Don't sign any contracts or hand over money "on the spot". Always take the time to perform due diligence and research the proposals you have collected. Adherence to the old saying "if it's too good to be true, then it probably is" will help avoid entering into a bad deal.

6. If you feel too much pressure, close the door or walk away. High pressure sales situations may result in bad outcomes for consumers, especially if it involves handing over money to a bad contractor. The best approach is being proactive. Know what questions you want to ask, and when to say NO. If necessary, invite a relative or trusted friend to be present when entertaining a sales presentation.

7. Always ask for 3 references. The contractor should always be able to provide references, and make sure they are local and apply to the same type of work you are seeking to have done.

8. Always avoid verbal agreements. Any proposal or contracts should be presented in writing on identifying letterhead, and should have a clearly defined scope of work.

9. Check with your local BBB to ensure the company has a good track record of satisfied customers. Check their cerdentials online as well, i.e. Angie's List, etc.

10. Never pay in full for work that has not been performed. While deposits are customary on most projects, paying over 25% down should be considered risky. Also, some states DO regulate deposits for construction, and impose a cap.