Are you planning to sell your home in the new year? If so, real estate specialists say it's crucial that you do all the repairs and improvements needed before your property hits the market. That means fixing every leaky faucet, gash in the walls and shaky stair railing.

"These days, buyers have less and less tolerance for houses with problems. They want instant gratification. They don't want to move in and have to wait weeks or months to get a house up to standard," says Sid Davis, a longtime real estate broker and author of "A Survival Guide to Selling a Home."

Davis says it's never too early for sellers to get serious about home repairs and cosmetic improvements. But as he notes, finding competent and reliable contractors can take time - especially now that a housing recovery is under way.

Although spending on home improvement dipped steeply in the aftermath of the recession, the outlook for the remodeling industry is now more positive, according to Harvard University's Joint Center for Housing Studies. For the first half of 2013, it projects double-digit growth in home-improvement spending.

Davis recommends extreme caution when hiring contractors for pre-sale work. Here are a few pointers:

-- Request contractor referrals through your listing agent.

For their clients' use, many established agents maintain lengthy lists of contractors, ranging from carpet cleaners to air-conditioning repair services. Such a list can be a valuable starting point for home sellers, says Eric Tyson, a personal finance expert and co-author of "House Selling for Dummies."

"Agents have a lot of pull with contractors, because they can send them lots of work over time. So the contractors know they'd better not mess around or delay the jobs an agent sends them," Tyson says.

But he says you "shouldn't take as gospel" the positive experiences your agent has had with any given contractor.

"The contractor may have slipped in the quality of his work or gotten too busy. So you'll still need references for every contractor you hire for a major project and also get at least three bids," Tyson says.

-- Make sure all your questions are answered before hiring a contractor.

"To be sure a contractor is organized and on time, you've got to meet with him before hiring him. A face-to-face meeting helps rule out sloppy or disorganized people," Davis says.

To ensure you don't get squeezed out of a contractor's schedule by a larger job, he says you'll want to find out whether the company is overbooked. You also need to know who will perform the work.

-- Insist that the contractor's promises are put in writing.

Davis says that those who know a contractor well often make the mistake of counting on verbal guarantees. But he says there's no substitute for a written contract that provides details on all aspects of the job, including price, timing and scope.

"Without a written agreement, you'll never get anywhere in small-claims court if the contractor turns out to be a con man. So unless it's a very small job - like a plumber replacing a faucet or an electrician fixing a light fixture - you'll want to have everything in writing," Davis says.

Davis also recommends you include in your agreement language indicating that the firm carries all the proper insurance coverage on its employees and subcontractors.

"Suppose one of the workers falls off a ladder and gets badly hurt. Without insurance, you could be held to blame and face a major lawsuit. Remember that any good contractor will carry insurance and be happy to show you documents to prove it," Davis says.

-- Don't let your contractors cut corners on government requirements.

Not all home repairs or upgrades require government permits to ensure compliance with local codes. For instance, your electrician probably won't need government oversight to change a light fixture and your plumber likely won't require it to replace a broken water heater.

But in many areas, major projects may be held to a higher standard. Examples could include the installation of a new bathroom or deck.

Perhaps you think you'll get a better price from a contractor who asks to circumvent government requirements. But as Davis says, skirting the law can be risky, especially for homeowners with plans to sell.

"It can come back to bite you if your contractors fail to get the proper permits for big jobs. That's because your buyer's mortgage lender may demand to see those permits for any major work you've done," he says.

-- Refuse to pay for the entire project at the outset.

It can be perfectly legitimate for a contractor performing a major project to ask for a partial payment at the front end, particularly if substantial material costs are involved.

For example, you could be asked for a down payment on a roofing job to pay for the purchase of shingles. And a house painter might reasonably request that you pay for paint, rollers and brushes before the work begins.

But Davis warns against covering the full cost of any work - including all labor costs - before it's completed. Those who pay for the whole job at the outset lose all the leverage they'll need later if the contractor fails to complete the work as promised.

"In most cases, I recommend that people pay no more than 10 percent of the labor costs at the beginning. Good contractors have credit lines. They don't need your advances to get a job rolling," he says.

Ellen James Martin, a former real estate editor at The Baltimore Sun, gives advice for anyone buying, selling or financing a home.