Avoid these dangers when hiring a home-repair contractor
Spring can bring a fresh crop of sketchy contractors, scams and other home-improvement problems.
Home-improvement troubles topped the list of complaints consumers filed with the Consumer Protection Division in 2017. Out of 2,961 written complaints filed in 2017, 224 related to home improvements. You can avoid being one of the statistics by finding a good contractor.
Look for these red flags:
Unsolicited calls or visits. Most contractors are far too busy to beat the pavement for customers or make cold calls. A contractor who shows up at your door in an unmarked vehicle and claims he “happens to have materials left over” at a big discount is probably someone to avoid.
Out-of-state contractors. Especially following a storm or natural disaster, ask the contractor where he or she is from and check (and write down) the license plate on the vehicle. An out-of-state license plate can present a problem if you need the contractor to come back for a repair or warranty work.
High-pressure sales tactics. Beware of the following: “This price is good today only;” getting a discount to be a display home; or listening to the contractors personal problems and feeling the need to help him. These tactics are specifically designed to get your money.
Low bids. While we all like to save money, sometimes a low bid can signal a contractor cutting corners in materials or workmanship. It may also be a “low ball” scheme where the contractor gets the contract by offering an unrealistically low bid, and then demands more money as a condition for finishing your project after the roof is removed or in similarly vulnerable circumstances. If a contractor provides an estimate that’s far below others, ask why it’s so low. Be sure a written estimate reflects your vision of the project. Get several estimates for your project so you know you are getting the best contractor with the best plans for your project.
Requests for money down. Most contractors have a line of credit with suppliers and subcontractors allowing them to buy now and pay later once the project is completed. If the contractor is asking for advance money, he or she may not have a credit line and/or may not intend to start or complete the project in a timely manner. In any contract, whoever has the money has the power. Once you pay the contractor money in advance, you lose your ability to manage the contractor and the project. If you do decide to provide partial advance payment for materials, make your check out to the supplier and the contractor. Also, pay for labor after it is provided.
Here’s other advice in getting the job done right:
Make your plan clear. Before looking for a contractor, think about your project. Consider writing down a proposed project description, including the quality of materials that you expect the contractor to use, so a contractor is clear about the scope of project and type of materials. Check with your city or county on required inspections and building permits.
Check references before you sign a contract or make a down payment. The best kind of reference comes from someone you know and trust. Ask who they have hired for their projects and whether they were satisfied. Ask the contractor you’re thinking of hiring for local references and contact them. Check for complaints filed with the Consumer Protection Division (515-281-5926 or 888-777-4590) and check the Better Business Bureau’s complaint database at www.bbb.org. It’s a red flag if a contractor is not listed in the local telephone directory or provides only a post office box and not a street address.
To see if a contractor has been sued or filed a lawsuit, go to: www.iowacourts.state.ia.us. To verify a contractor’s registration and bonding (which does not guarantee quality of work or payment of damages if a dispute arises with the contractor), go to: www.iowaworkforce.org/labor. Ask the contractor for a copy of a liability insurance certificate.
Get the contract in writing. Before work begins, agree on a written contract. Include the work to be done, the brand and/or the specifications of the materials to be used, the price, who is responsible for obtaining permits and scheduling inspections. Insist that all change orders must be in writing and establish who is responsible for cleanup. Include start and completion dates, and the remedies if the contractor fails to meet them. (Example: The contract could be nullified if the contractor doesn't start on time.) If you’re filing an insurance claim to cover the costs of damages, negotiate the details of the repairs with your insurance company directly and not through a contractor. If you sign a contract somewhere other than the contractor's regular place of business, such as at your home, you have three business days to cancel the contract without penalty. Most important, read the contract before you sign it.
Look into financing through local banks or credit unions rather than a contractor. Compare loan terms, and don’t let anyone pressure you into signing a loan document. Do not deed your property to anyone.