5 Things a Contractor Can Do to Rip You Off

When you hire a contractor to complete a project in your home, you're trusting that he will do it quickly and completely. The vast majority of contractors are honest and good at their trade, but there are a few bad apples that are either unskilled or preying on unsuspecting homeowners. Before you trust your home to a contractor, learn the five most common ways a contractor can rip you off.

Bad Material

Unless you're an expert at identifying the quality of building materials, this rip-off is difficult to catch. Because so few customers can spot the differences between materials, it's also one of the most common. Watch out for contractors that offer you "deep discounts" on materials, especially if they have a tale about how they got such a great deal, you're probably being swindled.

Before you hire your contractor, do a bit of homework. Find out what materials you'll need and price the high and low quality versions. Rip-off contractors will more than likely buy the materials at the same price you do, so you can judge the materials by comparing his price to the one you found.

Up-Front Payments

It's customary for a contractor to ask for a small up-front percentage. This amount is around 10%, but may be higher if your job involves special order items like countertops or custom windows. In these cases, he may request more to cover the deposit he will have to pay when ordering.

If the upfront deposit is more than 20%, and your project has no special order items, steer clear of the contractor. The more money he asks for up front, the more likely he is to cut and run before your project is completed.

Subcontractors

Subcontractors, or contractors who are paid through the contractor you hired, are excellent resources for getting large jobs done fast. They can also alert you to problems with your contractor.

When a subcontractor comes to you to ask about their payment, you can be certain that your hired contractor is a scam artist. He may have told the subcontractors that you would pay them directly or have taken off with your cash. Try to contact him first, though, to ensure the subcontractor isn't swindling you or that there is no miscommunication.

Contact Methods

When you hire the contractor, he should give you all the information on his business. For reputable contractors, this will include an office address, a land line number, a cell or pager number and information on his licenses.

Contractors that can only be contacted by cell may running a fly-by-night operation. Contact your state's licensing authority and business department to get more information on his business. If he claims his business is incorporated or a registered LLC, but your state business department has no record, move on before he can take your money.

Quotes and Timelines

Sometimes, events will necessitate changes to your contractor's original quote and timeline. A simple project can turn out to be a serious problem or other issues can interfere with the project's completion. However, these changes should be few and far between.

If your timeline is constantly being changed or he is always asking for a few hundred dollars more, you should consider getting a second opinion. Either he is trying to milk every last penny from the project or he is an inept contractor that didn't adequately identify your project's needs. Another contractor can give you insight to answer this question.

Hopefully, none of these will apply to your contractor. If they do, though, remember to never chase bad money. You may have spent several hundred, or even thousands, of dollars with this contractor, but if he ripped you off once, he'll do it again, no matter how much money you pump into the project. Once you discover you're being ripped off, drop the current contractor and find a new one.