Avoiding Home Repair Rip-Offs
by Gary Foreman
Bing-Bong. The doorbell rang once, then twice. John looked up from the TV and wondered who could be at the door. He got up from his easy chair and went to answer it. "Hi. I'm Bill Savemore from Rooftop Roofing Company. We're in your neighborhood and it looks like you could use a new roof. If you don't mind I could give you an estimate right now. In fact, we have a special offer for new customers. If you let us start right away, I can offer you a twenty percent discount! By the way, what's your name?"
John sized up his visitor. "Thanks for bringing that to my attention, but I'll need to take some time to do a little research before I select a contractor." He closed the door and returned to the evening news.
How did John know that Rooftop Roofing was more likely to bring him trouble instead of a bargain? Well, shortly after buying their home, John and Mary took the time to find out how to avoid home repair scams and frauds. They learned that almost all `scam artists' will use the same techniques to sell their shoddy services. Not only are there certain warning signs to avoid, there are also some things that you can do as a homeowner to avoid trouble.
What are the tip-offs to a rip-off? First, beware of a home repair contractor that approaches you first. Most reputable companies have enough work from advertising and recommendations that they don't need to knock on doors.
You'll want to be suspicious of any contractor who criticizes his own or another company's work. Qualified companies are proud of their work. And they have enough work so that they don't need to run down other companies.
Does the salesperson push you to make a quick decision? Some will offer a discount if you sign now. Don't do it! A qualified company knows that the more you think about your project, the better their offer will look. Quality at a reasonable price becomes more appealing by comparison to other bids. Any attempt to rush you is an attempt to hide poor quality or a high price.
What about offers to discount your price if you refer others to the contractor? Once again, it's time to keep your checkbook closed! The shady company is counting on using your good reputation because their reputation isn't so good. Quality companies get plenty of referrals without paying for them.
The salesperson says that the government endorses their product or company. That sounds like a high quality recommendation. But, is it? No, most assuredly it's not. The government, either Federal or State, does not endorse contractors. It may license companies that paint, repair, remodel or provide other services. That just indicates that the company meets the minimum requirements set by the government. It does not mean that the government recommends one company is over another.
OK, now that we know the warning signs of a bad contractor, how can you find a good one? Begin by asking people you respect for a recommendation. Neighbors, co- workers, your banker or real-estate agent or other companies who have done quality work in the past are all good sources of quality contractors.
When you're evaluating a contractor ask about their qualifications. One very important question to ask is how long they've been in business. Five years is a good dividing line. Scam artists simply do not stay in business in the same location for five years.
Always get a written estimate or bid. Ask questions about the quality of materials to be used. Also find out how much material they'll use. Ask how many gallons of paint they plan to use on your job. Do a little quick math. Are they planning enough paint to do the job properly? Or conversely, are they trying to charge you for twice as much paint as the job requires?
Get three estimates for the job. Typically the high to low estimates will vary by about 50%. If one bid is considerably lower than the other two you'll want to understand why that contractor can do the job cheaper than the others. Ask them why. Listen to their answer. Maybe they have a legitimate way to save you money. Then again, maybe they're skipping important steps that will come back to haunt you later.
Ask to see the appropriate licenses and proof of insurance. Reputable contractors will not resent being asked. It's too late to check for insurance when a worker is hurt and you're being sued. If the salesperson acts insulted that you asked, it's time to find a new company.
Agree before you sign a contract when payment will be due. It's reasonable for the contractor to ask for a deposit at the beginning. Final payment should not be made until after the work is completed to the satisfaction of the homeowner.There's no checklist that can eliminate all homeowner/contractor disputes. But it takes very little time to increase the probability of a successfully completed project. You don't need to know everything about how your roof was made to find a qualified roofing contractor. All you need is the willingness to take your time, the ability to ask a few questions and the common sense to evaluate the answers your given. Sounds like something any homeowner can do.
Debt is preventing me from taking a vacation this year or the vacation I'd like to take this year! Tell us: Yes, debt is affecting my vacation plans! or No, we're going exactly where we want to go but we'd love to learn make our trip as inexpensive as possible!
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
More Money-Saving Tips for Your Home
- Should I use a HELOC for home remodeling and repairs
- Find the best mortgage rates in your area
- 3 ways to use a mortgage calculator
- Mortgage calculator: Calculate your payment and more
- Home equity calculator: HELOC vs. line of credit
- How much can additional payments save me on my mortgage?
- Who offers the most home insurance discounts?