Protecting Yourself from Home Improvement Scams

Protecting Yourself from Home Improvement Scams Although most home improvement projects can be done at any time of year, many homeowners tend to start undertaking these projects during the spring and summer. While there are lots of honest, hard-working contractors out there, it’s very important to watch out for the less honest ones. Unfortunately, there are a lot of con artists out there looking to take advantage of unsuspecting homeowners.

Home improvement scams can easily happen during any time of year, but they’re typically more common during the spring and summer months because these scammers are aware that this is when many homeowners are looking to make improvements. Don’t let yourself get taken advantage of. Here’s what to watch out for when dealing with contractors:

Beware People With Extra Supplies

One of the most common home improvement scams involves someone going door-to-door, offering to do work right away for a bargain price because they just happen to have some extra supplies leftover from another job. Never feel pressured to hire a contractor on the spot. Their price might be a bargain, but the work these scam artists do very frequently ends up being very substandard and you’ll have to pay to have the work redone correctly.

Financing Scams

Financing scams are another extremely common home improvement scam. These scammers will offer to do some work on your home for a reasonable price. The jobs they offer to do are typically larger projects like replacing a roof or remodeling a kitchen; the sorts of jobs homeowners typically need to spend time saving up for. If a homeowner says they can’t afford the job right now, the contractor will start pressuring them to get financing through a lender they just happen to know.

These financing deals are actually home equity loans that come with very high fees and interest rates. Once you sign up for this financing, the contractor has no vested interest in doing a good job on your home or even finishing the job since their main goal was to get you to sign up for this high interest loan.

Watch Out for High Pressure Tactics

Finding a good, reputable contractor takes time and a lot of research. If you deal with a contractor who keeps pressuring you to hire them right away, such as by offering a special price that’s good for that day only or says that immediate repairs are necessary to fix a serious safety issue, it’s best to walk away. If they’re saying there’s a serious safety issue in your home, get an impartial second opinion. The simple fact is that you need time to compare estimates, check references, and to make sure they’re licensed and insured.

Don’t Give Large Down Payments

Contractors very commonly ask for down payments before they start working on a job. But if you’re dealing with a contractor who insists on a very large down payment or wants to be paid in full before work begins, this is a big red flag. Unless your job involves materials that need to be special ordered, a general rule of thumb is that you should never pay more than a quarter to a third of the total cost of the job as a down payment, although less than that is even better. Most reputable contractors are willing to negotiate with homeowners on down payments and are fine with tying payments to the progress being made on the job.

Be skeptical if a contractor tries to tell you a large down payment is necessary to cover the cost of ordering building materials or the office overhead of planning your job. An established contractor with a strong reputation will have enough cash flow to cover those sorts of things themselves and won’t expect you to pay for them upfront.

Also, stay away from contractors who insist on being paid in cash. Paying by credit card or check will offer you better protection if they try to bail on the job or they don’t do a satisfactory job.

Generally speaking, the best thing you can do to protect yourself from home improvement scams is to do your research first. Ask your friends and neighbors if they can recommend a contractor to you. Be sure to get estimates from at least three different contractors. Check your contractor’s background and make sure they have a regular office phone number and address, not a P.O. box.

Last, but certainly not least, make sure your contracts are complete and outline exactly what work will be done and when. That way, if anything goes wrong, you’ll have a contract to prove exactly how they breached the agreement. Don’t sign anything that has blank sections that the contractor could fill out after you’ve signed it.