Top 6 home-renovation scams to avoid
Renovations are stressful, but if you rush through important details you could fall prey to one of these scams.
Scam artists are nothing new, but there are plenty of reasons to predict that even more of them will be around, due to tough economic times. While they tend to prey on the elderly, anyone who is not cautious and informed is a potential victim. Your best defense is a skeptical mind and knowing what to look out for when you hear about an offer that's "too good to refuse." Here are some of the most popular, and costly, home-improvement scams.
1. One-time special
It's a rare business that's had only one sale in its entire history. The reality is that most businesses hold sales throughout the year, and that's not likely to change any time soon. If a contractor approaches you with a special offer, ask for concrete evidence that the quoted price is lower than what they have charged in the past for the same work. This could include a past catalog, special mailing, dated price list or evidence of identical work for a past customer.
Don't be pressured into accepting a deal that will expire before you've had a chance to do research, get competing bids and check references.
2. I might as well
Be wary of the contractor who knocks on your door and says he's working just down the street. He tells you that he noticed a few things that need some work on your house and that you could save money by hiring him on the spot. Coincidentally, he just happens to have all the materials and tools to start right away.
Article continues below
This approach is often used to entice you into doing things that are visible from the outside, like roof repair, painting, window caulking, deck restoration, driveway coating and chimney repair. If the contractor claims to have all the materials, ask him where they came from and who paid for them. If they are left over from an earlier job, there's some chance that the previous homeowner footed the bill.
3. Cash before work
Nothing should set off more alarm bells than the contractor who wants to be paid in full for a project before it's started. This arrangement sets you up for a disappearing contractor who never starts the work.
- MSN Money: Remodeling? It's a waste of money
A reasonable down payment is expected, to cover startup labor costs and materials. Normally, this should not exceed one-third of the total contract value; it's wise to make it as small as possible. The balance of the money can be tied to completion milestones to keep the contractor motivated to stay on schedule. Hold a sizable portion of the money until the project is finished, and make final payment dependent on your personal inspection and satisfaction.
4. Financing offers
Another warning flag is the offer to arrange financing to pay for your renovation, sometimes from a lender that the contractor knows personally. The offer may include a special interest rate for a limited time only. What won't be disclosed is that the contractor may be getting kickbacks or other favors from the lender.
If you don't review the loan papers carefully, you may later find out that you've signed up for a refinancing or high-interest home-equity loan, or unknowingly transferred your deed. If the money goes to the contractor, there's no incentive to complete the work. Always shop around for the best loan available, and consult an attorney if you need help understanding the terms and conditions.
5. Fly-by-night contractor
Be extremely wary if a contractor pulls into your driveway in an unmarked truck. If you talk to him, do it outside in public view. Anyone who enters your home is a potential burglar, or worse. If the truck has out-of-state plates, don't even waste your time.
For all contractors, you should apply due diligence. Verify name, business name and license number, address and telephone number. Ask for insurance papers, and verify that they are bonded in accordance with applicable laws.
6. Model home
Beware of the contractor who wants to fix up your home so he can show it off to other potential customers. You will likely be tempted by a deal that seems too good to pass up. But chances are pretty good that some or all of the work he's recommending doesn't really need to be done. Reputable contractors don't need models to showcase their work, and if they needed one, they wouldn't use an occupied home for that purpose.
The bottom line
Use resources such as the Better Business Bureau, the Department of Consumer Protection and the local licensing board to check the contractor's business reputation and credentials. A history of consumer complaints, lawsuits and expired licenses are reasons to keep looking for a reliable contractor.
Common sense and good judgment offer the best protection from home-renovation scams. If it seems too good to be true, it probably is. It's always wise to get multiple estimates before starting any project. If there are wide differences in the quotes, try to figure out why. Most importantly, don't sign any contract that you don't understand completely.
Well my advice is to check the contractor license with state contractors board and make sure company carries workers comp insurance otherwise you opening yourself to potential law sued.
We have dealt with a company called 3 Day Flooring & Kitchen in LA area, they have 3 showrooms and we were happy with their services and products. Start to finish no problems. I had other bids from different contractors and companies but all were too pushy or no store or showrooms.
Also make sure everything is written on the contract before you sign it and always get a copy.
-----Seekingwealthy. CoM ------it's the most effective site in the world to connect with, date and marry successful, beautiful people.-Meanwhile, . It's worthy a try. You do not have to be rich or famous.
----. It's when homeowners hire someone "under the table" to save a few sheckels that they generally get burned, and as a licensed professional electrician, I believe they have it coming.
Gosh, that atricle was just super-chock full of useful information! (What's the symbol for withering sarcasm, again?)
Here's the deal, folks: YOU ARE HAVING WORK DONE ON YOUR HOME, WHERE YOU AND YOUR FAMILY REST THEIR HEADS. Always hire a local, licensed and bonded PROFESSIONAL! The old saying is "you can't cheat an honest man", and that's because he knows that good work is done for a fair price. It's when homeowners hire someone "under the table" to save a few sheckels that they generally get burned, and as a licensed professional electrician, I believe they have it coming.
Shop around, but for your own sake and that of your family, don't consider price alone. The lowest bidder is probably cutting a corner to get there. Stepping over a dollar to save a dime=penny-wise and pound-foolish.
Thus endeth my daily vent of ancient aphorisms.