How to Avoid Scams When Hiring a Contractor

Remodeling your home is a wonderful decision if you hire the right contractor. Of course, you want to avoid scams, and they can be a common problem. If you’re wondering how to protect yourself when hiring a contractor, we have a few tips.

How Do I Protect Myself When Hiring a Contractor?

Avoiding contractor fraud requires some research in advance and the ability to trust your gut when you notice something wrong. It’s easy to go along with the things your contractor suggests because you presume they’re an expert. When their recommendations start to sound odd or illogical, it’s important to pay attention and be wary of committing yourself or your money.

How Do You Know if a Contractor Is Scamming You?

The goal of most scams is to get your money before you realize what is going on and leave you without recourse. Here’s a common contractor scamming format.

Shows Up Without Your Request

It’s easier for scammers to trick you if they catch you off-guard, so they might approach you for service, instead of you approaching them. When a contractor shows up at your door offering to replace your roof or upgrade your flooring, you should be on high alert. They may be trying to get you to agree to pay a deposit, then disappear.

Won’t Prove License or Insurance

New Jersey requires that every home improvement business have a licensed contractor for jobs above $500. They’re also required to carry liability insurance, so you will want to ask for proof of both. If they show you a license but then ask you to handle all the permits, it’s a good idea to look them up to confirm that the license is current.

Refuses to Put the Contract in Writing

When you’re considering a major home improvement, like a kitchen or bathroom remodel, you need details in writing. Contractors who don’t want you to ask questions will often refuse to give you a written contract. They may also ask you to sign a bare-bones contract with a handful of vague numbers on the estimate. Don’t sign anything if it doesn’t make sense or seems incomplete.

Demands a Quick Decision

Scamming contractors want to spend as little time as possible on the project and avoid scrutiny. They will sometimes offer a deal well below average in exchange for an immediate agreement. It’s best to say no in these circumstances. You should have the ability to get multiple quotes and reflect on them before you make a choice. If you’re looking for a good company, consider hiring a design-build contractor.

Insists on Cash Payments in Advance

In formats other than cash, money leaves a trail. Contractors who don’t intend to keep their promises may insist on payment in cash or ask for a large deposit in advance. It’s a common practice to ask for a small fee to cover the initial design meeting or to pay the cost to hire an architect separately from the contractor. The vast majority of the total estimate, on the other hand, should be paid at the end of the project.

Pushes a Specific Lender

Contractors sometimes partner with lenders to offer clients a financing option, but it should always be an option. Contractor lending scams push you to apply with a specific lender, implying that you will get a better deal or faster approval that way. Anyone who implies that they won’t accept other financings may be trying to trick you into taking out a loan that they will accept as payment and then disappear.

How Do I Not Get Scammed by a Contractor?

Even if you are on the watch for scams, it is still possible to fall victim to one. These tips can help minimize the risk:

• Get contractor recommendations from people you trust
• Ask questions and demand full answers
• Communicate in writing and keep records
• Follow up on references
• Read all contracts carefully before signing
• Avoid making a decision on cost alone

Here are a few questions to ask during your home design meeting. A trustworthy contractor should be willing to meet your expectations, even if you need reassurance.

How Do I Make Sure a Contractor Is Legitimate?

There are a few ways that you can make sure your contractor is legitimate:

• Identify their registered business name, address, and contact information
• Look for a current contractor license from the New Jersey Division of Consumer Affairs
• Search for the business through the New Jersey Division of Revenue and Enterprise Services

Scamming contractors are less likely to have a formal business, so be wary of anyone who doesn’t meet all these criteria.

At JMC Home Improvement Specialists, we’re always looking out for the needs of our clients. Check out our guide on how to avoid bathroom remodeling pitfalls. When you’re ready to get started on your project, call us to request a consultation.