How to Avoid Being Fleeced by Contractors

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home costs, home buying, home expenses, home maintenance, home repair, housing and apartments, scams, scandals

The following post is by MPFJ staff writer, Kelly Gurnett. Kelly runs the blog Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. You can also follow her on Twitter and Facebook.

If you’ve ever dealt with a bad contractor, you’ve learned the hard way that it’s crucial to vet the people you allow to work on your house. Shoddy work can come back to haunt you later on, resulting in extra costs and further damage, which an initially low quote won’t make better.

But, scam contractors are clever. They exist because they know how to push people’s buttons. How can homeowners protect themselves from being suckered into what seems like a great deal, only to realize their mistake too late?

Here are some of the top warning signs to look for when considering a contractor:

He does a surface inspection. Even if your repair or renovation seems like standard fair, a good contractor should do a thorough study of what will need to be done and then explain it to you. What’s the problem? What needs to be done, and how will he do it? Does he foresee any potential issues cropping up down the line? If he just does a quick once-over and says, “Yep, pretty basic…”, be wary.

You want to know a) that your contractor really does know how to handle this project, and b) that he’s willing to be upfront with you about the work involved so that you don’t get socked with any unexpected “extra” expenses as he starts working.

He won’t give you anything in writing. No matter the size of your project, your contractor should provide you with a detailed written estimate outlining all labor and parts costs anticipated, potential extra work that may need to be done and its cost, and several options if you’ve asked for price levels (say, premium counter tops versus basic ones).

If your guy gives you a verbal quote, insist he put it in writing. Anyone who’s hesitant to do so should be immediately scratched off your list.

He’s dismissive of the need to have permits. By law, contractors must have all applicable permits, licenses, and registrations for the types of work they perform in the towns they perform it. This is for homeowners’ protection, to ensure that contractors are properly insured and will do the work to code.

You can verify whether your contractor’s permits are up to date by calling the building department of your town, city, or village. If your guy dismisses your project as “too small to need a permit” or tries to persuade you to take out a homeowner’s building permit (which places all the liability on you), send him packing.

He uses pressure tactics. Shady contractors, just like shady salesmen, have plenty of tricks up their sleeves to force you to commit now, even if you’re not ready. If someone is dangling “limited time” promotions in your face, claiming you can get a massive discount because it’s their slow season (which is conveniently about to end), or pushing for financing options you don’t want to sign up for, it’s a sign that they’re not on the up and up.

My husband and I once invited a pair of contractors to give us an estimate on our roof because we were trying to get an idea of how much we’d need to save up. (We didn’t plan on having the work done for a few years yet.) When we explained this to them, saying that we had some debts to pay down first, they actually tried to persuade us to take out a home equity line of credit on our house so they could do the work that week, while materials costs were still low.  (They were about to go way up, of course.) We showed them the door.

He offers to do the work “off the books.” Never agree to pay a contractor under the table. He may claim he can give you a discount for paying in cash (without a written contract) because he works for a big contractor but is doing a little work on the side to earn some extra income for himself, etc., etc. But most likely, he’s trying to a) avoid having to pay taxes on his work, and/or b) avoid a written agreement that would hold him responsible for a certain level of work.

He “just happens” to be in the neighborhood. Our house is in a predominantly older community; most of our neighbors are the original homeowners in their 70s and 80s. And I have never, in the dozen neighborhoods I’ve lived in, seen such an array of contractors and utility providers and cable companies trying to hock their services door-to-door. Why? Because my neighborhood is a prime target for people looking to talk their way into a shoddy deal.

If someone comes to your door and can point to their company’s sign on your neighbor’s lawn, saying “We just did work over at the Jones’s and wanted to let you know we’re available,” this is potentially alright, and they should be happy to leave a card or a brochure with you and leave it at that. If someone shows up on your step saying, “I just finished a project around the corner and have all this material left over I need to unload. If you let me do your roof, I’ll give you a huge discount,” shut the door in his face. Legitimate contractors don’t buy way more material than they need for a project, and they certainly don’t go door to door trying to foist those materials off on random people on the spot. If it feels odd or off, it probably is.

How about you all? Have you seen any other shady contractor tactics that homeowners should be wary of?

Share your experiences by commenting below!

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      This is a really tough problem for those who are new to communities and do not know who to trust. My best advice is to speak to friends who have first hand experiences with a contractor. Second, interview at least 3 contractors before proceeding. Third, only give a very small initial deposit and only pay as the job progresses.
      Another source of contractors that can be trusted is to call local realtors as they always are dealing with improving homes and have a list of trusted contractors.
      In any event, be skeptical and careful and trust your gut if you get a bad or cocky vibe.

    2. My Multiple Incomes says:

      Great tips! It's really difficult to find people who will not fleece you especially if you are new to the community and do not know your way around. I'm had some experiences with these type of shady individuals, so I am quite wary of them and make sure I do not put too much trust on contractors I never had any previous dealing with.
      My recent post Comment on My Guide to Finding and Hiring a Virtual Assistant by Carnival of Money Pros – February 10, 2013

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