New ways to protect yourself, and home, from scams

By Stephan Sardone

You hear the reports on local news outlets much too often. Recently, in Tarrant County, a “scam” contractor was sentenced to 47 years in jail for bilking thousands of dollars from unsuspecting clients according to a report on WFAA-TV Channel 8. One person was a victim of a cold call just a day after she had searched for contractors online.  

 The alleged contractor used a fake personal name and company name. The homeowner, a teacher and a mom, felt comfortable with the contractor’s ability to remodel a master bedroom after he provided some initial sketches. She never saw the contractor again after providing a sizable down payment. He was convicted of scamming at least five other people in Tarrant County out of more than $60,000. 

While that is an extreme example, it just shows that there are some questionable people out there posing as professionals. Here are some ways to prevent being taken advantage of:    

Ask neighbors, family and friends for recommendations. This is an excellent way to measure the quality of the contractor’s work. Plus, the closer the relationship you have with your acquaintances, the more honest they will be. Ask them about cleanliness, timing and how often the clients communicated with the project manager. While the internet can be a great resource, proceed with care. The internet replaced the telephone book. It is the primary source for information. But it is important to stay local. A contractor’s reputation is on the line; even if it is not the telephone line anymore. Read the reviews, read the crappy reviews and read the response of the contractor to the crappy reviews. Everyone is going to have some crappy reviews, but how the contractor responds to those can be more telling than all the five-stars reviews in the world. 

Meet with multiple contractors to see if you like and trust them. A lot of people say start with three estimates. I hate this approach, since it starts the project off on the wrong foot and tends to create a bit of an adversarial relationship between the client and general contractor. You want to find someone you can partner with for your project, someone you can trust to do what they say they can do and for the price they say they can do it. Remember, often you will be away at work while the team is in your home.

Find someone who when they tell you that there is going to be a change order, you believe them and don’t think that they are up to something. Meet with people who have similar products, value and perceived quality (as far as you can tell) and determine who you like and trust. What you are trying to do is first compare apples to apples. Then you are trying to determine who you want to work with.

Request to see insurances, licenses (when applicable), references and permits. A reputable contractor won’t hesitate to honor these requests. And always call your insurance agents just to be safe. Make sure that you homeowners policy can cover anything out of the ordinary should there be an accident. Do not let work begin until you have received paperwork from the contractor’s insurance company listing you and your property as a certificate holder on the contractor’s policy. Without this, their insurance is worthless to you. 

Do not let work begin until permits have been posted. Ask what would happen if one of the workers gets hurt at your house. Get references, call them and ask good questions.

Do not get pressured into making a decision. Be fearful of big discounts or “limited time only” offers. Good contractors have devoted their careers to providing quality work and value. Decisions have to made in a timely fashion, but they don’t have to be rushed. Understand that your project is important, and requires a lot of planning and expertise. Don’t rush into thinking it should start the week after your hired the contractor, and don’t let them push you into making decisions that you are not comfortable with. 

Check with the Better Business Bureau or local remodeling organizations (NARI). It doesn’t hurt to double-check. You might uncover something that makes you doubt the qualifications of the contractor.

Make sure you and your lawyer understand the contract and draw schedule. It is unreasonable to expect the contractor to front the costs for your renovation project, so draws should be paid ahead of the work, within reason. We typically receive 30 percent at three intervals, and then get 5 percent twice at the end. This keeps the project funded, but not over funded. A good contractor will have a good contract, and will be willing, capable and patient to explain everything in it. You should have a lawyer do the same. 

If I were to summarize, it would be — find a partner to help you enhance your home that you will enjoy working with for years to come. By following these simple, logical tips, you can be assured to avoid the “scam” contractor.