1. Prices that seem too good to be true usually are too good to be true. Many homeowners have regretted their decision to act on a “great deal” that turned into a bad deal. Some of these “bad deal” companies provided low-quality work or used substandard materials, while others engaged in questionable business practices like tax dodging, working without insurance, or using illegal workers. Some of the companies raised the price or added items that were not included in the original price, after the homeowner was committed.
2. Do not buy from an unknown company selling door to door. Some contractors have well-rehearsed, door-to-door scams designed to quickly separate you from your money. Some of these people travel from city to city all over the country, preying on unsuspecting homeowners; and unfortunately, many of these scam artists target elderly residents.
3. Resist the high-pressure sales technique. Some companies often offer “today only” incentives to encourage the homeowner to make a decision on the spot. Avoid companies practicing this high-pressure sales technique. If a company tries to force you to make a decision before you can do your homework, they probably do not want you to inspect them too closely.
4. Be patient in the busy season. Many home service industries are seasonal. During the busy season, the better companies get backed up. Instead of waiting for a reputable company, unsuspecting homeowners sometimes take a chance with any company that can start work right away. There may be some very good reasons why a company in a cyclical business has very few customers during the busiest time of the year. Before taking a chance, ask yourself, “If I were in an unfamiliar city on a Saturday night, would I eat at an empty restaurant that could serve me right away, or would I eat at a restaurant with some customers?” In the long run, the hassle and cost associated with repairing poor work may make you wish you had waited for a reputable, high-quality, insured company in the first place.
5. Avoid moonlighters. Moonlighting occurs when an enterprising and dishonest employee steals a customer from his or her employer. For example, an employee working for one company might come out to do an estimate but then offer to do the work for less money on non-company time. The employee might also sub the work out to another company. Just like retail employees who shoplift, moonlighters are usually fired when caught. Individuals who buy shoplifted or stolen merchandise can at least be sure that they are purchasing a product equivalent to the one offered in the store. However, homeowners hiring moonlighters often find that the moonlighter’s work is lower in quality than that of the company, and they then have nowhere to turn. Moonlighters are not as concerned about their reputations as established companies may be. Furthermore, to offer a lower price, the moonlighter often avoids such things as insurance, taxes, licenses, and other overhead.
6. A company’s sign in your neighbor’s yard does not mean your neighbor was happy with the company’s work. Multiple homeowners have reported hiring a company simply because a neighbor had previously hired the company. These homeowners later found out that the neighbor had a bad experience with the company as well. Some of the companies were very aggressive and actively marketed themselves.
7. Remember that one referral is only one referral. Many homeowners have reported hiring companies because a neighbor or friend had recommended that company. Later, some of these homeowners did not have nearly as positive an experience as did the neighbor or friend. Keep in mind that even the worst companies have a few happy customers.
8. Thoroughly check references. Before hiring a company for a major project, such as remodeling, interview many of the company’s references. When talking with references, ask tough questions about quality, schedule adherence, cleanup, communication, and disagreement resolution.
9. Only compare apples to apples. Some companies knowingly deliver low quality at a low price. However, in sales calls these companies do not stress the low quality as much as the low price. If you are a bargain hunter who will not take the time to educate yourself about what you are buying, you may well overpay by taking the lowest price. Always get the details in writing when comparing companies.
10. Compare prices. Since prices for the same work can vary, we strongly recommend that you get multiple estimates. EBSCO Research rates companies on the quality of the work and service delivered, not on price.
11. Avoid business on a handshake. If a company representative or contractor claims his or her handshake is as good as a contract, it probably is not. Reputable companies that sell large-ticket items insist on contracts.
12. Avoid large, up-front payments. Beware of scams and always assume the worst. If you make a large, up-front payment to a company that promptly goes out of business or skips town, you are out the money. If an up-front payment is unavoidable, consider charging the payment to a credit card. If anything were to happen, your credit card company may be able to help.
13. Never open an account at a local store in your name for a contractor. Some individuals or contractors request an account at a local store in the homeowner’s name to allow the contractor to charge the homeowner’s materials directly to this account. However, after opening an account, some homeowners later found that tools and other unknown items, as well as materials for other jobs, had been charged to the account. If a contractor’s credit is not good enough to warrant an open account at the local store, the underlying reason for the poor credit is probably a good reason to stay away.
14. Do not lend tools to the people you hire. Many homeowners have reported contractors and technicians who failed to bring the required tools with them. Unfortunately, many of the homeowners who lent their tools to the contractor or technician later found that the tools were not returned. Additionally, if you lend a tool to a contractor and that tool injures the contractor, the contractor may be able to make a tort claim against you.
15. Do not help contractors. If you help a contractor and the contractor gets injured, the contractor may be able to make a tort claim against you.
16. Keep valuables out of sight and locked up when you have workers at your home. Multiple homeowners reported thefts when unknown contractors, employees, or technicians were working in their homes. Unfortunately, none of the homeowners reported successful prosecution of the suspected culprits or recovery of the stolen items. You can minimize your risks by securing your valuables.
17. Monitor workers in your home. Never leave unknown workers alone in your home, and never hide a key for an unknown worker. Although most homeowners are very careful early in a project, many let down their guard as the project progresses. Protect your home and your valuables.
18. Avoid cash payments. A few contractors and service providers demand cash payments or offer substantial discounts for cash payments to avoid bounced checks, garnished wages, and Uncle Sam (although we have no direct proof of any company engaged in tax avoidance). Additionally, some companies may in turn pay their employees in cash, thus allowing employees to escape taxes and government regulations, such as green card requirements. Additionally, checks and other non-cash payment forms leave a paper trail, while hard cash has a way of disappearing. If you ever need to prove you actually paid a bill, a cancelled check is very useful.
19. Write the check to the company you hired, not directly to an employee. Some unethical employees and/or unethical subcontractors steal from homeowners by convincing them to write checks directly to them, or to a different company from the one the homeowner hired. After the money is stolen, the company that performed the work is still owed its fees and can rightfully put a lien against the homeowner’s house.
20. Request lien releases on major projects. A lien is a claim made against a homeowner’s property by an individual or company that has supplied labor or materials and has not been paid. If the general contractor fails to pay a subcontractor, the subcontractor can legally place a lien against the homeowner’s property. On major projects, or on any project where you fear a contractor might not pay the subcontractors, make the receipt of lien releases from the contractor and all subcontractors a condition of payment.
21. Never make the final payment before you are completely happy with the work and cleanup. Money is power. Contractors are much less interested in making you happy after they have been paid in full. Some less-reputable individuals will present many seemingly plausible reasons why you should pay them now instead of waiting until the end of the project. Do not be pressured into paying early.