Homeowners typically face many concerns when hiring contractors, which is why it’s essential to carefully vet prospective contractors before handing over a large sum.
Contractor scams often start with an unexpected knock at the door or phone call following a storm, promising extra materials left over from an earlier job or providing financing options they know.
1. They Ask for a Large Down Payment
Scam artists can take advantage of homeowners by asking for large down payments or demanding full payment before work can commence. It is vitally important that homeowners obtain multiple estimates from different contractors, carefully considering all details. If one bid seems significantly lower or higher than other contractors’ bids, that could be an indicator that they’re hiding costs or performing subpar work.
Some scammers will simply steal your deposit and vanish, while others may perform subpar work or falsely report issues that dramatically increase project costs (an unethical form of upselling). Reputable contractors typically request 10% to 30% upfront with progress payments throughout the project; many states even have laws specifying this industry standard as the maximum upfront payment an contractor can demand upfront.
2. They Ask You to Secure Permits
Scammers who knock on your door or call are likely trying to create confusion and pressure you into making quick decisions quickly. They might claim they have leftover materials from another project or provide an unbelievable quote – all indicators of fraudsters.
Any major construction or renovation project requires a permit, and contractors who attempt to sidestep this requirement are breaking the law and risking safety violations for your benefit.
Contractors often try to deceive customers by diverting materials and equipment from the project site in order to put money in their own pockets. They might do this by telling you they’re using 3/8-inch plywood instead of the 5/8-inch that was contracted for, or by saying there have been unanticipated complications requiring extra money – both clear indicators that they may be taking advantage of you.
3. They’re Always Late
Home renovation projects can be time- and labor-consuming endeavors, so it is understandable if contractors must modify their schedule or materials in order to meet your needs and complete your project on schedule. However, any repeated and unreasonable changes that increase costs without explanation are likely a scam.
Be wary if a contractor claims they have materials left over from a job or offers you loans or mortgages for the project, suggesting they can help secure mortgage or loans for it. These could be ways for contractors to siphon your insurance claim money off before fleeing town; additionally they could charge extra work not originally agreed or make changes without your approval, leading to poor workmanship and additional expenses.
4. They’re Unresponsive
Homeowners have heard horror stories of dishonest contractors taking large deposits from homeowners before fleecing them without finishing the work. You can protect yourself from this scam by insisting on signing a contract before handing any money over.
Home repair scams often begin with an unsolicited phone call or doorstep visit from someone claiming they’re working nearby and offering to repair your roof with materials they have on hand, at a good rate. Be wary of such offers; only hire licensed and insured contractors.
Home contractor scams can thwart your home improvement plans and delay completion. Make sure you obtain multiple quotes, obtain written contracts with building permits in place and review warranty coverage prior to making any decisions regarding who your chosen contractors should be.
5. They’re Unlicensed
Hiring unlicensed contractors can lead to subpar craftsmanship or no work completed at all – or worse! Some states regulate licensing laws for home contractors, so make sure you ask about this when interviewing candidates. Look out for red flags like cash-only payments and no license or insurance details being disclosed as warning signals; pressure to sign immediately are other telltale signs.
Be wary of contractors offering leftover materials from previous jobs as this can be used to lure homeowners into projects when they’re under time pressure and unlikely to conduct research or obtain additional quotes. Clear contracts outlined with project scopes and costs will help eliminate misunderstandings or potential scams, while milestone-based payments provide consumers with protection from paying for services they haven’t yet received.
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