Home Projects: Know the Red Flags When Hiring a Contractor

Hiring a contractor to replace windows, install new siding on a garage, and the many other home repairs needed to prepare for the summer months ahead, are just a few projects that might be on a homeowners to do list this spring. Yet as a commonly complained about industry to Better Business Bureau (BBB), hiring a contractor is a significant investment that requires extensive research. To help homeowners make an informed decision about hiring a trustworthy contractor and avoid being a victim to rip-off scam artists, BBB offers valuable information for home project success.

In 2011, BBBs nationwide received more than 6,000 complaints against general contractors, an increase of 11% from the previous year. Locally, BBB Serving Central, Northern and Western Arizona received 346 complaints last year.

“While most contractors are reliable, there are those unscrupulous few who end up charging too much and doing too little…or nothing at all,” said Matthew Fehling, BBB President/CEO. “Knowing the red flags will help consumers choose a trustworthy contractor and help finish spring projects on time.”

BBB offers consumers the following red flags to look for to prevent home improvement rip-off scams:

Door-to-door solicitations: Keep in mind that contractors who attempt to gain business by visiting door-to-door or through “cold calls” may not be with a local, established business, but instead might just be passing through trying to make a quick buck.

Materials left over from a previous job: Be careful if a contractor shows up at your doorstep offering a cut-rate price on a project because they have left over materials from a recent job – possibly from a neighbor’s house or the house “down the street.” This is a common ploy of fly-by-night operators or handymen who are based out-of-state and use their pick-up trucks as their place of business.

Obtaining required building permits: If a contractor asks you to get the required building permits, it could be a sign they are trying to avoid contact with the local agency that issues such permits. Perhaps they are not licensed or registered with proper state agencies such as the Arizona Registrar of Contractors (ROC). A competent contractor will obtain all necessary permits themselves before starting work on a project.

Missing contact information: Be sure to check the contractor’s contact information. At a minimum, require a working phone number and an address and then verify the information with BBB. The contact information should also match with ROC records.

High pressure sales tactics: A reputable contractor recognizes that consumers need time to consider all the factors involved when deciding which contractor to hire. Take the time to check references and verify professional designations and affiliations. Also, verify insurance, check licensing requirements with the ROC, and view their BBB Business Review. Obtaining three written estimates from different companies is also recommended.

Upfront or cash only payment options: Whatever the reason, never pay for the entire project upfront. Make payments by credit/debit card or check as a credit/debit card statement or cancelled check can serve as proof of payment, if needed. Agree on a payment plan before work begins. The payment plan should include partial payments made throughout the length of the project. Do not make the final payment or sign an affidavit of final release until you are satisfied with the work.

Borrowing from a specific lender: Be careful if your contractor suggests you finance a project with a particular lender or through their company. If you do so, do not sign papers in a rush and make sure you read and understand all speculations, particularly the small print. In some cases, consumers signed documents to later find out they had agreed to a home equity loan with a very high interest rate, points and fees. Instead, secure financing on your own by shopping around and comparing loan terms.

Consumers can check the status of a general contractor’s license by visiting the Arizona Registrar of Contractors at www.azroc.gov.

To find a local list of trustworthy contractors, visit Search BBB.org.

About BBB Serving Central, Northern & Western Arizona
BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. Incorporated locally in 1938, today your BBB serves communities in Central, Northern and Western Arizona, supported by over 9,600 BBB Accredited Businesses. BBB provides objective advice, free BBB Business Reviews® and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust.