When we are talking about major home improvements, there can be a lot of money involved. If you will be spending thousands of dollars on improving your home, the last thing you want is to fall victim to a scam. Do your best to avoid shady contractors and only work with reliable professionals. In this article, we are going to give you tips on how to prevent contractor fraud.

Find a reliable contractor

Check first with the BBB of talk to your friends or coworkers who recently had work done on their homes. If they were happy with the contractor, you could ask them to give you the contractor’s contact. One of the best ways to prevent contractor fraud is to hire someone who comes with a glowing recommendation. That way, you’ll know you’re safe from the start, and your mind will be at ease. If you recently purchased a new home, you could ask your real estate agent if they have contacts of contractors they worked with before. Real estate agents often work with professionals from many different fields, and it’s not uncommon for them to have a network of contacts they are willing to share with you.

Look them up online

After you’ve got a lead on a contractor that seems promising, you should go ahead and look them up. Online research is easy, cheap, and most importantly, you can do it yourself from the comfort of your home. Here are some things you should keep an eye out for:

• Is their company registered with the corporations division of your state’s Secretary of State’s office? Almost every state government’s website has an easy to use tool.

• Do they have their own website? Is their business address and telephone number clearly listed? If they don’t have a listed address, why not? Do they have a portfolio of their previous work?
• Look for reviews and testimonials. Most contractors are proud to post reviews of past clients.
• Are the contractors mentioned on other websites? Affiliate links and external mentions and reviews go a long way towards proving that a contractor is legitimate.
• What does the Better Business Bureau have to say? What kind of rating and reviews does the contractor have on the BBB website?

Can you visit them?

Reach out to the contractor and ask them for any additional information you require. Does your contractor have a physical address, and can you reach them by phone to set up an office meeting? Try talking to a real person instead of just communicating via email, and set up a face-to-face meeting with someone from their company. If they are avoiding meeting you in person, you should trust your gut instinct and move on to someone else.

Ask the contractor if they are currently doing any projects which you could inspect. However, remember to be respectful and never drop by unannounced. Construction sites can be dangerous places, and contractors are rarely thrilled to have civilians walking around while they work.

Check their paperwork

Does the contractor have all the required paperwork? Ask for proof of insurance. It’s not uncommon for a contractor to provide multiple previous references. Contractors that have been around for a while and have been doing good work will have proof of their accomplishments, which they will be glad to share with you. If they have honors and accolades, you can be sure that you are working with a respected member of the community.

Don’t be lazy and inspect all the paperwork they give you. When agreeing to something with your contractor, be sure to get everything in writing. In case anything goes wrong, you’ll have all the paperwork that will help you settle disputes quickly. Remember to never sign anything before reading it thoroughly.

Talk about how payment will work

If you are planning expensive work on your home, it is a good idea to talk to your contractor about financing options. Never agree to a full in advance payment in cash; that immediately sounds like a scam. One of the best ways to prevent contractor fraud is to not get tricked out of your money. Some payment upfront is expected, but that rarely goes above 10% of the total value of the project. 

Ask for a certificate of completion before finalizing the last payment to your contractor. You should also check to see if all the work is up to code and to your liking. Any disputes are best settled immediately.

Consider hiring an independent inspector

When buying a new home that you plan to remodel, or when just attempting to beautify your current one, most people will try to avoid unnecessary expenses. However, there are a few optional payments that we suggest you make. You can hire an independent inspector to confirm what the contractor is saying. 

Shady contractors who want to scam you out of your money can suggest unnecessary work for your house. An independent inspector can confirm which work really needs to be done on the home. If you know which upgrades and improvements are needed, you’ll know how to prevent contractor fraud and save a lot of money.

Buying the perfect home

When buying a new home, it’s always a good idea to have a home inspection before closing the deal. That can reveal existing problems that the property has, and you can then try to negotiate for a better price or opt-out of the purchase entirely. However, the home inspection may reveal that there isn’t anything important that needs immediate fixing. If that’s the case, you will be ready to move in straight away. It’s good to know what to watch out for if you want to buy the perfect home and avoid stress by not having to deal with fraudulent contractors in the first place. You should still have a reliable contractor handy, since home inspections can’t reveal everything. Another common situation is that you might end up wanting improvements done to your home even if nothing needs fixing.

Conclusion

When searching for the right contractor to do work on your home, try to keep in mind the points we mentioned in this article. By being aware of how scammers work, you’ll know how to prevent contractor fraud. Once you find a contractor you can trust, it is a good idea to keep their contact handy for any future projects you have in mind. Working with people you know are legitimate is the best way to avoid stressing out about getting scammed.

For More Information:

Homes & Mortgages | FTC Consumer Information

How To Avoid a Home Improvement Scam | FTC Consumer Information

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