It’s always exciting to renovate your house and transform it into your perfect home. However, with homeowners prepared to pay a good amount on renovations, they’re a prime target for many scammers. So, before you agree to anything, check out these nine home renovation scams to avoid.
The door-to-door scam starts off very straightforward: a contractor knocks on your door, claiming that they’re doing some work in the area and offering to do some repairs or improvements on your home as well. It may seem like a stroke of luck that a contractor was ‘just in the neighborhood’ at the right time – however, this should be a red flag. Real contractors run tight schedules and they build a client base through marketing and recommendations. Sadly, these types of scams usually target the elderly, who are more trusting, or areas that have recently been hit by a natural disaster.
Leftover Materials From ‘a Job Nearby’
Similar to the door-to-door scam, you may be approached by a contractor claiming that they have leftover materials from a job in the neighborhood and offering to cut you a deal on the materials cost needed for a repair. As above, you’re not dealing with a Good Samaritan. Contractors can return materials such as concrete and asphalt to the supplier. Also, the materials used in such scams are lower quality and may result in a higher cost for you when whatever ‘repairs’ were done need to be properly fixed.
Home inspections can cost anywhere between $300 and $500, so always be cautious of anyone offering to perform one for free. This is usually just an excuse for the scammer to get access to your home, where they will ‘conveniently’ discover all sorts of repairs that need to be performed. More often than not, those repairs can easily be done with a bit of DIY, or they might not even be required.
Everyone fears missing out on a good deal, which is why this is another popular renovation scam. Contractors will present you with an offer that’s almost too good to be true and will add some extra pressure by claiming that it’s a one-time deal you’re only getting today. It’s also not uncommon to be rushed into signing a contract before getting a proper read through, which can result in missing out on clauses you may otherwise not agree to.
‘Attractive’ Financing Options
In this renovation scam, the contractor will present you with what looks like a very attractive financing deal, especially if you claim you don’t have the needed funds for the repair. These deals usually involve low-interest rates or special introductory rates. In such cases, always take the time to read the contract in its entirety, and if there’s any terminology you’re not familiar with, don’t hesitate to ask for the opinion of a lawyer — chances are the contractor will abandon the scam as soon as you mention one.
The typical upfront payment charged by trustworthy contractors is usually between 10% and 30%. Anything above that should be a warning for homeowners – especially if a contractor is asking for the full amount to be paid before the job is even started. In the ‘best case’ scenario, the contractor will do a rushed, low-quality job. Worst case scenario, they will do a ‘cash and dash,’ taking the money without performing the services.
Although going over the budget is not uncommon, always be wary of contractors who use unexpected expenses to claim more money to finish the project. In some scams, contractors can complete a project and then claim that the costs were higher than projected, then threaten you with filing a construction lien if you refuse to pay. A professional contractor should be able to assess the costs of the project and provide you with an exact quote, as well as manage their budget from start to finish.
No Need to Pull a Permit
Not all renovations need a permit, but if you’re planning major structural changes to your home, always make sure that they are in accordance with your local laws. Some contractors will claim that they’ve done similar work in your area that didn’t need a permit, or that the project is on a schedule. In fact, some will offer to perform a job without a permit, which is always a sign that they are unlicensed and you’re dealing with a scam.
Contractor Doesn’t Have a License
Last but not least, always make sure that your contractor has a license. If they don’t, there’s a good chance it has been revoked, and they’re not legally allowed to work on your home. Take a moment to perform background checks if needed, using the Better Business Bureau or the local license board.