Renovating Your Home in the New Year: Avoiding Getting Ripped Off
By Mike Eide
Welcome to the third installment in our five part series of renovating your home in the New Year. If you haven’t read the previous two weeks posts be sure to check them out here. This week’s write-up is about something very important in the whole process, “Avoiding Getting Ripped Off”.
The old analogy “if it sounds too good to be true, it probably is” applies to a lot of things in life. Choosing your home renovation professional is also one of them. For example if you have a contractor come in way cheaper than others, claiming they can get these great deals on supplies because of who they know, etc, it more than likely is too good to be true.
It is amazing how a person will do months of research before buying a new computer or sound surround system, but they will intrust someone with a $30,000 renovation that they have never met, done no research into and only can go by a flyer left in their mailbox. Unfortunately the home renovation professionals market is flooded with people that will claim to do one thing, and in fact do another. Here are some tips to help you to avoid being scammed and getting ripped off.
Do your Due Diligence
A home renovation is a major purchase, in the same wheelhouse as purchasing a car. It is something that will be a part of your home for years to come. You will have to live with these decisions for potentially the rest of your time in the home. So the least you can do is do a little research into which contractor you hire ahead of time.
The best type of research about a contractor you can do is word of mouth. Talking to a family member, friend, someone in your church family or even a friend of a friend will help you get the details on what kind of work the contractor does, are they legit, clean up after themselves and finally will they do everything they say they will do. Don’t know someone that has someone they can recommend? Well there are other ways you can find recommendations. You can check out a local online forum for trusted contractors, or even speak with your local home building shop for any recommendation they may have.
Once you have done your due diligence in researching a list of who you might hire, it is recommended that you get at least 3 quotes for the job. Use these quotes as a comparison to find the best deal you can for your renovation. Again keep in mind that if a quote seems to good to be true, it more than likely is. If someone comes in far and away cheaper than the rest there is something up with it. They might be either missing an important detail or potentially trying to rip you off.
Get Everything in Writing
When you have finally decided which contractor you will hire, it is time to be sure to get everything in writing. Be sure to go over with your contractor in detail your plan for the renovation, what products/materials you want to be used and then in turn be sure they have a detailed contract outlining all the work they are going to do is the same. This contract is so important because it is the only thing you can use in court if work is not done to your satisfaction.
Next comes the deposit. It is normal for a contractor to ask for a deposit to start the process. They may need this for various reasons such as to buy supplies or just to ensure that you will not rip them off in the end. The amount they ask for is the big question. Never pay for more than half of the reno up front. You have no leverage anymore for them to finish the project or do the renovation up to your standards. Experts suggest anywhere from 30-50% as an acceptable deposit.
Here are some additional types and questions to help you to avoid getting ripped off.
- Avoid under the table cash work
- Avoid door to door contractors
- Check with the Better Business Bureau if available
- Only work with contractors that will disclose their actual contact info including their phone number and address in case you need to find them if they are not returning your calls
- Make sure you get a receipt/invoice for everything including your deposit
- How much is the labor going to cost?
- How much are the materials going to cost?
- Will the contractor being doing the clean-ups including dump runs?
- Do they offer a warranty/guarantee of any kind?
We hope these tips and questions will help you to avoid getting ripped off by a renovation professional. Unfortunately the bad contractors will know the law very well and understand that the police can do nothing to help you if you have a disagreement about the work done or lack of work they have done. Even with an iron clad contract these will be civil matters and have to be taken care of in court. This will cost you for a lawyer and you still may never get any of the money you were ripped off. These reasons should be enough to help to encourage you to do your due diligence and make the right smart educated choice in hiring a renovating professional.
Do you have any bad run-ins with contractors during your home renovations? If so please feel free to leave your story in the comments below.
Week One: Financing a Home Renovation
Week Two: Working with a Renovating Professional