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Shabby Equipment- The first signs that a company could be in a fly-by-night outfit
are poor personal appearance, shoddy tools, filthy or broken equipment, and vehicles in
poor repair. Not every good construction company will have uniforms, new trucks, cell
phones and laptops. Some super-dependable contractors don't even have fax machines!
But how a contractor presents himself and takes care of his truck, tools and equipment is a
good indication of how well he'll take care of you and your job.
are poor personal appearance, shoddy tools, filthy or broken equipment, and vehicles in
poor repair. Not every good construction company will have uniforms, new trucks, cell
phones and laptops. Some super-dependable contractors don't even have fax machines!
But how a contractor presents himself and takes care of his truck, tools and equipment is a
good indication of how well he'll take care of you and your job.
The Low-Ball Offer- When you are reviewing bids, if a contractor says he will give
you a "special low price" that you must keep a secret, move on to the next guy.
The same is true for a bid that comes in far below the others. The low-bidding contractor
is either clueless or he never intends to finish the work. Another scam is to bid low and
then start charging you extra for materials you thought were included in the price once the
job begins.
Finally, pay attention to how carefully the contractor looks at your job before bidding. If a
bidding contractor says, "Yeah, we did a job like this and I'll charge you the same," or if he
doesn't take notes and measurements and make material and labor calculations, you may
be dealing with a contractor who isn't thorough enough to do a good job.
you a "special low price" that you must keep a secret, move on to the next guy.
The same is true for a bid that comes in far below the others. The low-bidding contractor
is either clueless or he never intends to finish the work. Another scam is to bid low and
then start charging you extra for materials you thought were included in the price once the
job begins.
Finally, pay attention to how carefully the contractor looks at your job before bidding. If a
bidding contractor says, "Yeah, we did a job like this and I'll charge you the same," or if he
doesn't take notes and measurements and make material and labor calculations, you may
be dealing with a contractor who isn't thorough enough to do a good job.
Second-Rate Materials- If a contractor claims he already has materials that he
wants to pass along to you at a discount, watch out. Usually these materials are seconds,
ungraded, or below grade minimums for code. Small contractors rarely buy in volumes that
yield these big discounts, and contractors rarely carry large inventories of material. If they
do, they severely misjudged quantities on a previous job, which doesn't speak well for
their estimating skills.
wants to pass along to you at a discount, watch out. Usually these materials are seconds,
ungraded, or below grade minimums for code. Small contractors rarely buy in volumes that
yield these big discounts, and contractors rarely carry large inventories of material. If they
do, they severely misjudged quantities on a previous job, which doesn't speak well for
their estimating skills.
High Up-Front Percentage- Some types of work require a large initial payment
from the homeowner because the contractor will have to leave this as a deposit when
ordering. This applies to special orders such as cabinets, tile, carpet, etc. It does NOT
apply to commodity materials like roofing lumber, which are bought "on account" by any
legitimate contractor with at least 30 days to pay.
from the homeowner because the contractor will have to leave this as a deposit when
ordering. This applies to special orders such as cabinets, tile, carpet, etc. It does NOT
apply to commodity materials like roofing lumber, which are bought "on account" by any
legitimate contractor with at least 30 days to pay.
No Office- If your contractor has nothing more than a cell phone and a post office box,
call the Better Business Bureau, your state licensing bureau, or your local consumer
protection office to see if there are any complaints lodged against him. Also, check all of
his references and visit some recent jobs. A contractor should have an office somewhere,
even if it is just a room in his home, and a reference at a local bank and accounts with local
suppliers.
call the Better Business Bureau, your state licensing bureau, or your local consumer
protection office to see if there are any complaints lodged against him. Also, check all of
his references and visit some recent jobs. A contractor should have an office somewhere,
even if it is just a room in his home, and a reference at a local bank and accounts with local
suppliers.
Unexpected Price Hikes- If your contractor arrives claiming that materials cost
more than he thought and he'll have to charge you more, stop him at the door. Unless the
job is cost-plus, most contracts between you and your contractor are for firm labor and
material process. The contractor has to eat any mistakes he makes due to under-bidding.
The only time the price should change on a fixed bid is when you initiate and then sign off
on a change order that alters the scope of the work.
more than he thought and he'll have to charge you more, stop him at the door. Unless the
job is cost-plus, most contracts between you and your contractor are for firm labor and
material process. The contractor has to eat any mistakes he makes due to under-bidding.
The only time the price should change on a fixed bid is when you initiate and then sign off
on a change order that alters the scope of the work.
Contract Changes- If the contractor violates the terms of the payment schedule by
claiming he is running short of money and has to move up a progress payment to an
earlier date, insist on sticking to the original terms. In this situation, the contractor is
probably not managing cash flow well and needs your payment to satisfy past material bills
or debts to subcontractors. It is a common error even honest contractors make, because
they touch lots of money, yet relatively little of it is actually theirs. But this is no way to run
a construction business. Pay only as you agreed to in the contract.
claiming he is running short of money and has to move up a progress payment to an
earlier date, insist on sticking to the original terms. In this situation, the contractor is
probably not managing cash flow well and needs your payment to satisfy past material bills
or debts to subcontractors. It is a common error even honest contractors make, because
they touch lots of money, yet relatively little of it is actually theirs. But this is no way to run
a construction business. Pay only as you agreed to in the contract.
Subpar Materials- If during one of you walk-through inspections you notice that a
different material than is called for in the contract is being used, call the contractor right
away. Scam artists will use cheaper materials, and the "savings" goes in their pockets. If
this happens once, it can be an honest mistake or a sloppy subcontractor. But check a
few other material specifications against the contract or plans, just to make sure.
different material than is called for in the contract is being used, call the contractor right
away. Scam artists will use cheaper materials, and the "savings" goes in their pockets. If
this happens once, it can be an honest mistake or a sloppy subcontractor. But check a
few other material specifications against the contract or plans, just to make sure.
Payment- If subcontractors complain directly to you that they have not been paid, or if
the contractor's material bills aren't getting paid and you are getting calls, confront your
contractor. Your final payment to the contractor should be issued only when you are
entirely satisfied with your punch list and final walk through. When you write that last
check, even reputable contractors take it as a sign that the job is entirely finished. So no
matter what the sob story, don't give in to the pressure to write this check until you are
satisfied.
the contractor's material bills aren't getting paid and you are getting calls, confront your
contractor. Your final payment to the contractor should be issued only when you are
entirely satisfied with your punch list and final walk through. When you write that last
check, even reputable contractors take it as a sign that the job is entirely finished. So no
matter what the sob story, don't give in to the pressure to write this check until you are
satisfied.
Identifying Red Flags Before the Job Starts...
Red Flags Once the Job is Underway...
Scams
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