- By Gregory Nowak
- In Tips
Beware of Crooked Contractors
How to Avoid Home Repair Scams
The Home Repair Scam is possibly the most terrifying aspect facing homeowners when they’re thinking about home improvement projects. Sadly, there are good reasons for that fear. There are a lot of crooked contractors out there and it seems we all know someone who has been a victim.
I think the reasons are easy to understand. First of all, homeowners are usually at a disadvantage because they don’t know much, if anything about the work they need done. It’s a lot like taking your car in for repairs. Most of us simply have to take the mechanic at his word (there is a little more of an advantage with home repairs because we don’t take our house in to someone’s shop and let them take it apart). The second reason is desperation. If there is an emergency situation, such as storm damage or a broken pipe, we are vulnerable. We need our house fixed right now and we’re tempted to make decisions we otherwise wouldn’t. Hopefully, following these seven steps will help you avoid the costly consequences of the Home Repair Scam.
1. Take your time!- Don’t rush into decisions without doing your homework. If you have a tree through your roof and it’s raining in your house, you are probably not thinking clearly. Unfortunately, Scam artists know this and they are waiting to pounce and take advantage of your misery. Take a deep breath, count to ten, whatever method you use to calm down, do it now. Call your insurance company or a neighbor or family member before rushing into a decision you will regret. The reality is, it’s already raining in your house (or whatever emergency you may have). How much worse can it get? Don’t compound the problem by giving your money to a crook.
2. Do your homework – Whether it’s an emergency or not, you’ve got to check people out before you do business with them. I’ve had business deals go bad and after it’s happened; I’m like a detective, doing background checks, digging up all sorts of dirt, and discovering that they’ve done the exact same thing to several others before. Too bad I didn’t do just a fraction of that detective work beforehand. No matter how clean cut and down to earth that contractor seems to be, follow the steps outlined in here and Do Your Homework.
3. Be careful about down payments, deposits, or up front money – Many contractors will require some money up front or when they start a project. This is done for a couple of reasons. Reason #1 is to cover the initial cost of labor and materials to start the project. Many contractors, especially smaller ones, just don’t have the working capital to finance the project to it’s completion. The other reason is contractors are weary of being cheated the same way homeowners are. A Scam can work both ways. If you have done your research, asked all the right questions, and checked references, there should be no reason you can’t give someone a down payment or deposit. Just exercise some common sense. If we’re talking about a $500 siding repair, 50% up front should not be a problem. But, if we’re doing a $30,000 kitchen remodel, 50% is out of the question. As a way around paying money up front, offer to buy the materials yourself, taking away the need for the contractor to take money out of his pocket to begin the work. Some Home Repair gurus will tell people “Never give contractors money up front”. I think this advice is out of date. You’ll have a hard time finding someone to take your job without some sort of payment in advance. Just do your homework.
4. Get everything in writing – Another common mistake when we rush into a decision (and yes, I’ve made it to), is we don’t do the necessary paperwork. Always have a signed contract. Scratch out any items you don’t agree with or make changes before you sign it. Don’t be intimidated into signing something you don’t agree with. Remember, you are the boss. The contract should always include the contract price, payment terms, signing date, start and completion dates, and a physical address and phone # (which you have verified) for the contractor.
5. Watch out for contractors who seem to be in too much of a hurry or try to build a false sense of urgency – This can be one of the first signs of a scam. “I need a deposit today in order to reserve a spot for you.” or “You really need to sign up today because I’ve got a big job starting out of town next week and I won’t be able to offer this price anymore.” If they have so much work, why are they so desperate to sign up your job? By the way, I said earlier that it’s OK to give someone a payment up front. This does not apply to giving someone a deposit to “hold a spot for you” for 2 months until they can get to you. It’s alright to wait a while for a good contractor, but don’t give them money until they’re ready to start. There are just to many contractors out there to do that.
6. Be extra careful of out-of-town contractors – When natural disasters such as hurricanes or floods occur, there are generally not enough local contractors to perform all of the work in a timely fashion. There are contractors that roam the country, following these disasters. They’re known in the industry as storm chasers. Like any industry, they have good and bad elements. Taking the proper precautions and doing the proper research is more important than ever with the storm chasers because unlike local businesses, by the time you realize the scam, they’ll be long gone.
7. Don’t get greedy – If it seems too good to be true, it probably is. If a contractor promises to get the insurance company to pay for repairs that you know aren’t covered or to rebate money that you don’t have coming, send him packing. If you take the bait, you could end up as an accomplice to fraud. Additionally, if you know they’re dishonest, what makes you think they won’t Scam you. In the tough economic times we’re in, an extra buck can be enticing, but don’t be taken in.
Hopefully, it gives you some things to think about and maybe saves you some grief. There are plenty of good,honest contractors out there to choose from. Don’t fall victim to a Scam. Thanks for reading and good luck.
David WalkerJanuary 14, 2021, 3:57 pm REPLY
It’s great to learn that you should get a signed contract when hiring handymen. My wife and I are wanting to renovate our kitchen and we were wondering what we should look for in hiring a remodeling handymen. I’ll be sure to tell her that we should get a signed contract before deciding on a handyman.
AnthonySeptember 26, 2022, 11:04 am REPLY
Life resembles a house that needs remodeling. Once in a while, it’s difficult to see the excellence in the fixes, however with adoration and persistence, after some time all that will be similarly as it ought to be.