How to Avoid Contractor Scams on Your Home Renovation/Remodel

In the past, I discussed garage improvement projects that increase your home’s value, driveway improvements that increase your curb appeal, and other home projects that require a professional. When you hire a professional contractor to get the job done. you need to be careful. Otherwise, you could lose a nice chunk of change. Learn how to avoid contractor scams on your home renovation/remodel.

Avoid being a victim of unscrupulous contractors by watching out for these common contractor scams when performing any home improvement work on your Naples home.

Common Contractor Scams and How to Avoid Them

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I know. I know. You’re probably saying “but, Michelle. I’m too smart to get scammed. I can spot a fraud a mile away.” That’s not necessarily the case. Good people get scammed every single day. Here’s what you should look out for so you don’t become another statistic.

Door-to-Door Salesmen

Such a cliche. I know. But, still, beware of solicitors offering their services at your door. Sometimes, they say that they’re doing work on a neighbor’s house and noticed that you might need their services as well. Since they find themselves with “leftover” materials, they offer to perform these tasks at a discount.

Instead of signing on the dotted line then and there, ask for a business card and do your homework. Check their license online. If they can’t provide a contractor’s license number, don’t hire them.

Exorbitant Money Upfront Requirements

Yes, most contractors require money upfront. However, you should see a bright red flag if they ask for more than 30% in advance. In Florida, the law has not set a limit on how much a contractor can request as a downpayment (ie, “upfront money”). But you should still beware if they ask for more than 30%. If possible, try to negotiate it down to 10%. That shows both parties good faith in performing/paying for the work in question. Besides, asking for a huge percentage upfront could be indicative that they fell behind on another project and need your money to complete it. Again, a red flag warning. Will they do the same thing with your project?

Pressure to Sign Now

If you attend a home show, chances are good that contractors offer special discounts for signing up while you’re there. Most of the time, these contractors only request an appointment to assess the situation…not perform work. While most of these offers are from legitimate contractors, some might be contractor scams in waiting.

Before you ever sign a contract for work with anyone at any time, do some research into the company and contractor first. Never feel pressured to sign right away no matter what kind of discount they dangle in front of you. A good contractor will be willing to wait.

Lowball Bids and Unclear Terms

Another red flag that screams “contractor scam” is a super low bid followed by a contract with hazy or vague terminology. We all want a good deal. But extremely low bids could signify work performed by an unscrupulous or unlicensed contractor.

Always make sure your contract clearly states exactly what work will be performed, when you expect it to be completed, and the total cost for said work. Once work begins, it will be hard to go after the contractor for soddy work if the scope of work hasn’t been specifically outlined in your contract.

Pulling Permits

Never pull your own permits for work on your Southwest Florida home. Whoever pulls the permits must answer for every aspect of the project. This includes insurance, payment to workers, workers’ comp, and any issues that may arise from inspections or failed work completion. If you pull the permits, that means you must register as an employer with the state, making you responsible for the workers’ taxes, too. A licensed, responsible contractor never asks the homeowner to pull their own permits.

Using Someone Else’s Contractor’s License

Yet another one of the contractor scams we see all too often is when a contractor works under another contractor’s license. Another scam is for a contractor to use an expired license number. Always ask for the contractor’s license number upfront. Then, visit the Florida DBPR website to search that license number. Make sure the name of the contractor and the license number match as well that it’s current (not expired).

More Money, More Money, More Money

Finally, beware if a contractor asks for more money than initially contracted midway through the project. While it’s common for homeowners to request changes in the middle of a project that may warrant more money, a contractor should request an official change order not actual cash in the middle of the project. If they do ask for money before they’ve finished the job, it could imply that they haven’t handled their money very well with this job (or others). Change orders are due in full upon completion of the project. Make sure you put this “change order” provision into your initial contract to cover you in case that happens.

Michelle Thomas, Premier Sotheby’s International Realty, Luxury Naples/Marco Island Homes & Condos?