Adding value to one’s home is an investment many homeowners hope to make to their property. One of the most common ways to do this is by renovating the interior of the home, the exterior or both. When it comes to vetting contractors for the job, consumers must be vigilant of scammers who hope to make a quick buck off an unsuspecting home owner. That’s why consumers must know the signs of a home improvement scam when they see it.

Signs of a Home Improvement Scam

No one wants to accuse a seemingly hard-working professional of being a theif or a fraud, but caveat emptor dictates that consumers must have a reasonable amount of knowledge in order to vet potential contractors.

The Door Knock

One of the hallmarks of a home improvement scam is that the contractor will cold-knock on doors claiming that they were simply “in the area” and noticed the exterior of your home could use repairs. Reputable contractors to no blindly knock on people’s doors soliciting their services.

Sloppy Seconds

A home improvement scam is usually designed to turn a quick profit, which means low material costs. Scammers will typically tell their marks that they “just happen” to have leftover materials from a previous job. Reputable contractors or builders would order fresh materials to ensure the integrity of their work.

On the Spot

Scammers typically want there to be a quick decision regarding their services. Whether it’s just a handshake or signing on the dotted line, scammers have the disposition of a stereotypical used car salesman.

Cash Only

Scammers want the entire fee to be paid up front before any work is completed, and tend to only accept cash as payment. This is to eliminate possible paper trails that would document their grifting behavior and increase the chance of facing consequences.

Permit Please?

Being a licensed contractor makes it much easier to procure building permits for various jobs. However, when a contractor is unlicensed or uninsured, they may attempt to have the mark procure the licenses—once again to avoid accountability for any wrongdoing that will take place.

I Know a Guy

When a mark does not have the funds that are “required” for a job, a scammer may suggest that you borrow money from a lender they know personally, perhaps with the promise that they can get you a low interest rate, or the “friend rate.”

Tips for Avoiding a Home Improvement Scam

  • When vetting contractors for a home improvement job, make sure your list of candidates is comprised only of licensed and insured contractors. You can verify a contractor’s license through your state or county government, and ask that any candidate provide proof of insurance.
  • Begin building a list of potential contractors by asking your friends and neighbors for recommendations. As long as the reference comes from a source you know and trust who has utilized that contractor’s services, the proof should be in the pudding, so to speak.
  • You can also find a list of reputable contractors from your local Home Builders Association or an equivalent for your area to see if there have been any formal complaints filed against any one contractor. You can check online reviews, their Google rating, and even check with the Better Business Bureau.
  • Get multiple estimates from multiple candidates. Legitimate estimates should include the description of the work requested, materials required, a completion date, and of course a price. Though it may be tempting, going with the cheapest estimate is not always the best option. If you observe huge disparities between estimates, ask the contractor in question.
  • Read all contracts and legally binding documents carefully. Not all contracts will be the same state to state and you must make sure you read any documents in totality before signing. Make sure the contract includes
    • Contractor information: name, address, phone number, license number.
    • Estimated state and completion date
    • Detailed notes on the spoken terms of the agreement when consulting with the contractor.
    • A written statement of your right to cancel within three business days.
  • Never pay the full amount for the completed project up front.