Home Improvement Scams and How to Avoid Them
Next to buying a house, a home renovation can be one of your most significant investments. Whether you are adding a room, upgrading a kitchen, or repaving a driveway, there are a lot of moving parts involved requiring the use of a contractor. When there is that kind of money involved, it can be an enticing target for scammers who can find a number of ways to liberate you from your money. Here are some of the more common home improvement scams to watch out for.
Asking for Payment Up Front
You should expect to make a reasonable down payment on the cost to do a project. But, anything more than one-third of the total cost should raise a red flag. Each state sets a maximum amount a contractor can collect as a deposit, so be sure and check with your state’s contractors license board before making any payments. Also, most contractors are willing to negotiate down payments, so don’t feel compelled to accept the first offer.
Low Ball Bids
Be leery of contractors that come in with a really low bid. It’s possible the contractor doesn’t understand the true scope of the project, which is not good. But it is more likely they are low balling the bid with the intention of hiking up the price by tacking on additional costs once the project is underway. If you receive a bid below 15% of competitor’s bid, do more due diligence on the contractor.
They Avoid Putting Everything in Writing
To avoid the scammer who keeps hiking your costs, be sure that everything is in writing. The contract should include a complete schedule of work, cost breakdowns, payment terms, and procedures for changes. If you or the contractor suggest any changes to the project, agree to terms and add it to the contract. The contract should include the contractor’s licensing, bonding and insurance information.
Natural Disaster Opportunists
In the wake of a major natural disaster, like a hurricane or flood, it’s not uncommon for scammers to comb the neighborhood in search of desperate homeowners who want their homes repaired. Considering that most legitimate contractors are probably fully booked at times like this, the person who happens to be free at that very moment is probably a shady contractor. The work will most likely be inferior or incomplete but, by the time you notice, they will be long gone with your money.
Free Mold Testing
There’s nothing scarier for a homeowner than an outbreak of mold. However, if someone shows up at your door claiming to be a “mold inspector,” finds mold, and then says he can have it removed by the end of the day, show him to the door. Finding and fixing a mold problem is much more involved, requiring an in-depth inspection, special tools and a couple of days to remove.
Other ways to know you may be getting scammed:
How to Make Sure You Don’t Get Scammed
When it comes to hiring a contractor for home improvement or repairs, it’s “buyer beware” at its extreme. You are the first and last line of defense against shady contractors. Fortunately, there are some simple steps you can take to keep them at bay.
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