Check Contractor References
So you want to remodel your home or have something big that needs fixing. Whether it’s installing new gutters, finding and repairing a basement plumbing leak, or adding on a new room, you’ll have to call a contractor to take care of the problem. But how will you know if the contractor is lying to you?
Here are seven of the most common fibs that contractors tell their clients – and how to protect yourself.
1. “I’ll need at least half the money up front.”
While a down payment for a renovation or improvement job is common, there’s no good explanation why a home contractor needs half of the estimated cost before he ever sets foot on your property. He’s just trying to boost his bottom line without having to demonstrate progress on the job. (And if he already has his money, it gives him less incentive to prioritize your project.)
A good rule of thumb is no more than one-third for a down payment (some states even set maximums on how much contractors can charge up front before starting work). That allows the contractor to buy enough materials to at least get started. If the contractor demands more money, offer to make another payment when the first stage of the work is complete and go from there. Otherwise, send him packing.
2. “The payment terms in the contract are fair.”
Many contracts call for the homeowner to make payments throughout the course of a remodeling or repair project. In theory, that’s perfectly acceptable – but the devil is in the details.
Contractors often structure payments so that they get a larger percentage of the final price before a corresponding portion of the work is completed. (For example, the contract may ask you to pay a total of $7,500 of a $10,000 project after just half the work has been done.) So read the terms of the agreement and look for disproportional payment schedules before signing it.
3. “My license means that I’m qualified to work on your project.”
Your home renovation contractor might tout his license number in his advertising, but it may have about as much credibility as his driver’s license number. Different states have different licensing requirements for contractors, and many of them don’t require much of contractors to obtain the proper licenses.
So in addition to knowing about the licensing laws in your state, you should check contractor references before hiring him. Also, know this: Almost 95% of all home improvement contractors change their name or go out of business within three years due to mismanagement or complaints. So try to get a contractor that’s been around for at least three years under the same name.
4. “No, I won’t delegate to unqualified subcontractors.”
This can either be an outright lie or a very liberal interpretation of what the word “qualified” means. Some home repair contractors think that two hands and a pulse constitute proper qualifications for a subcontractor.
That’s why it’s important to be aware of which subcontractors will be used throughout the project before you commit to it. Then perform some of the same background research on the subcontractors as you did on the contractor himself. If possible, check out some of the work done by the subcontractor and look for details of quality repair and craftsmanship. Once again it’s important to check contractor references.
5. “No, that extra add-on in mid-project won’t cost much at all.”
In reality, altering the plans of a major contracting job in midstream will cost more than if you had incorporated the same aspect at the outset (because of work that has to be undone and redone). In fact, some contractors even encourage on-the-fly changes because the markups and payoffs are so lucrative.
Therefore, it’s wise for you to avoid any “while you’re at it” modifications to the original project. If you do want to make a change, then go through the same process as you did when you hired the contractor: get a proposal in writing, negotiate the terms, and sign a separate agreement.
6. “Sure, we can take care of asbestos – and it’ll be cheap!”
Unless your contractor has a special asbestos-handling license, he shouldn’t be handling it at all. The reason asbestos removal takes time and costs money is because doing it incorrectly can have a major impact on the health of your family.
To make matters worse, you as the homeowner could be held partly liable for environmental damage caused by inappropriate removal of asbestos from your home. Because contractors without the special license don’t have access to government-approved disposal sites, they may just dump it anywhere – and it can leach into the soil or groundwater. You don’t want the EPA pointing the finger at you due to the ineptitude of your contractor.
7. “It’s done right. Trust me.”
A contractor’s work almost always looks good right after it’s finished. But unless you’ve spent all of your time watching the job get done, you have no way of knowing whether or not the contractor skimped on materials or installation. Again taking the time to check contractor references are key here as well!
If your contractor is licensed or regulated by the state, he will probably have insurance that will cover any future problems that may pop up – so that’s something to figure out before the job begins.