Don't Let Contractors Rip You Off

This is a guest post by Mitch Lipka. Mitch writes or has written, for some of the top publications in the country. He is an award-winning consumer columnist and has done stories on just about every topic that affects wallets, bank accounts, and peace of mind. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other newspapers.

Hiring a contractor to do work on your home, whether it’s a relatively small job or a major renovation, is a big deal. For most consumers, your home is your biggest investment. It should be treated with the level of respect that comes along with that.

Just like you wouldn’t want some quack of a doctor to perform surgery on you, you don’t want someone with questionable skills to be operating on your home. On top of that, if you do end up with a shady “contractor” you not only run the risk of poor work you also are taking a chance on getting ripped off.

Scams in the home improvement business have been around for a long time. They’re finely tuned and very focused on getting consumers at their points of maximum vulnerability.

Recognizing how their game is played, however, can help you avoid getting ripped off. And, if you play the role of consumer by the book, you’ll have the best chance at getting the job done properly for a fair price.

What to watch out for

Ideally, you should be seeking a contractor rather than the contractor seeking you. So, when someone comes to your door after spotting some loose shingles, cracks in your driveway, or just about any other problem that could benefit from repair, watch out.

One of the oldest scams in involves the door-to-door approach. They’re looking to do two things: tempt you with their immediate availability and get a commitment from you without giving you the benefit of thinking things through or reviewing your options. More than likely they’ll also dangle a price that’s too low to believe. Unfortunately, for many victims, that combination can be irresistible.

You should try to resist, however, because the very next thing after you say you want the work done is you’ll be asked for money. More than likely they’ll ask for cash or, if they take a check, it will be cashed before the job even gets going.

Regardless of whether the contractor looks the part, sounds impressive, or otherwise spins a believable tale, avoid these sorts of spur of the moment decisions. Driveway repair schemes, in particular, are widespread during the spring and summer months. A crew of workers will troll neighborhoods looking for driveways in rough shape and pitch the homeowner that they can do the work then and there on the cheap. Why? Because they claim they have a bunch of asphalt left from a previous job that must be used up. In reality, they drive around with this asphalt and what they want is someone who will lured by the chance of a cheap repaving. The result for the unfortunate people who agree is a scam that involves a demand for more money with the threat of leaving a partly finished job.

How it should work

The simplest way to avoid these contractor scams is to understand the proper way to hire someone to do work on your home. That involves doing a bit of homework and taking the time to screen contractors you are considering hiring.

Recommendations are not the final word, but a place to start. Many jurisdictions license or register contractors. It is vital that consumers make sure a contractor they are considering is properly licensed or registered with the state, county, or municipality where the work is to be done. That’s a way to avoid fly-by-night outfits and typically means the contractor has at least a minimum of amount of insurance so you don’t get left holding the bag if something goes awry. (Here’s a list of state and local consumer agencies by state that can help you track down the rules where you live.)

Check with the agency that licenses or registers contractors- or your state attorney general – to see if many complaints have been filed against any company you are considering. Look on the Better Business Bureau website, as well.

Invite at least three contractors to provide detailed estimates of what they think the work should cost. Getting estimates should be free. At their visit, ask to see their liability and worker’s compensation insurance (if they have anyone working for them). Be sure to ask them to be specific on their estimates, including any particular materials they might use (the brand of window, for instance, if they’re replacing windows). Ask what the estimate includes and does not include. Check if permits will be needed for the job and if they will be getting them. A reputable contractor will play by the rules and take care of those sorts of details. Failure to get a required permit could result have serious consequences for the homeowner.

Always ask when payments are due. Payments should be incremental, starting with a small deposit, followed by percentages of payment made after certain milestones are reached, with the last payment of, say, 25 percent, being withheld until the work is completed to your satisfaction.

The lowest price is not always the best deal. Pay attention to how the various contractors communicate with you, how thorough their estimates are and how inclusive. A shady contractor will offer a low-ball estimate to entice a customer and later jack up the prices. You want to hire someone with an established track record, references you can check, who understands what they’re doing.

It takes more time and more thought, but playing it safe will help you dodge the worst of the worst and avoid home improvement ripoff.