Homeowners depend on quality contractors to perform the maintenance on their home. Unfortunately just because someone hangs a sign out front or creates a website that claims that they offer quality home improvements isn’t always necessarily true. A large portion of the $33 million that is spent per year on home maintenance ends up in the hands of illegitimate contractors. In order to avoid becoming a part of the statistics, learn the top scams that contractors pull on unsuspecting homeowners.
It might not seem odd to you for a contractor to ask you for a sizable down payment before starting work on your property. It should though. The standard down payment is 1/3 – 1/2 of the total cost of the project. Any contractor that asks for more than that is more than likely going to cash your check and never be seen again. The excuse that they use is that they need the money in order to purchase the materials for your home improvement project. Reputable contractors will not use this excuse and are typically willing to negotiate the terms of the down payment.
Bait & Switch
This is one of the most common scams that home improvement contractors use. They lure customers in by offering extremely low prices, lower than any competitors in the area. Once the work begins, they suddenly begin asking for more money claiming that the materials were more expensive than they anticipated or that there is work that needed to be done that they did not originally see. Another method that scammers use is to lure you in by offering incredibly low prices on high end materials. When the work is actually completed, they use low end materials that are not what was promised.
Lack of Licensing
Believe it or not there are contractors out there that work without a license or insurance. Up front, these contractors seem as if they cost significantly less. Taking a look at the big picture, however, they actually cost a lot more. Without a license, your contractor might or might not obtain the necessary paperwork from your city, allowing the work to be done on your property. This could cost you a large amount of money in fines alone. In addition, without insurance, any accidents or damage to your home are now your responsibility, increasing the price of your home improvement project by thousands of dollars and many headaches.
In order to protect yourself from illegitimate contractors, always get a contract with all of the details written out, always ask for proof of license and insurance and never give too much money for a down payment. Take the time to do your research and really learn about the contractors you are about to trust your home and finances to.