When Hiring a Contractor, Look Out for These Red Flags
He bristles at your questions about his work history. He says there’s no reason to solicit other contractor bids. His company demands payment up front, in cash. He tells you this is the way renovations get done.
Maybe you don’t know any different because this is your first major home improvement project.
Contractor red flags can be hard to see, especially if you’ve never hired anyone for a large project on your home. It can be intimidating to quiz an expert on something that’s new to you, and it can take time to properly vet your options.
But with thousands of dollars on the line, you can’t afford not to—home improvement fraud amounted to $1.4 billion in 2012, according to the Federal Trade Commission.
When you’re hiring a contractor, vetting doesn’t have to be laborious as long as you employ some common sense and ask him or her the right questions.
10 Warning Signs of a Bad Contractor
- He’s defensive. Good contractors should field your questions calmly, expecting them as part of doing business. If a contractor bristles at any of the basic vetting listed here, he may have something to hide.
- No license number. Whether it’s from the state, county or city, a reliable contractor should have a license. And once they give it to you, look them up with the agency responsible for those in your area. It should be up-to-date, with no flags in the system. A quick Google search or a call to your local city office should point you in the right direction.
- No references. Good work should net numerous satisfied customers willing to vouch for the person who completed it. Ideally, you’ll even find a contractor through referrals.
- He wants money up front. If you pay the contractor at the beginning, what insurance do you have that the job will get finished?
- Cash only. A reputable contractor will take checks or a credit card. This covers you, the homeowner, with a paper trail and the help of a bank or credit card firm in case of a dispute.
- A bid that’s way beneath the competition. Everyone wants to save money, but if a bid seems too good to be true, it probably is. You don’t want anyone skimping on your home.
- He goes door-to-door soliciting business. A real professional doesn’t have to find work this way.
- He offers to contact your home insurance provider directly. Don’t give anyone signed permission to contact your insurer for reimbursement for work on your home. They could ask the insurance firm for the money and then split—and you would have little recourse.
- You’ve just been hit by a natural disaster. Con artists come out when crisis strikes, such as after a tornado or hurricane rips through an area. They prey on the desperate reeling from damage. If you find yourself in this situation, vigilance remains key.
- You just feel something is off. This person will ultimately have responsibility for a significant portion of your home and your life. If you feel uncomfortable for any reason, it’s better to walk away before money changes hands.
The National Center for the Prevention of Home Improvement Fraud, a Georgia nonprofit, has a great list of questions to ask potential contractors.
Also, check out this helpful infographic for more on what home improvement fraud can cost you.