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Contractors: 8 Red Flags When Hiring A Contractor

November 10, 2016

Beware of These 8 Red Flags When Hiring a Contractor
By Lisa Gordon | Nov 10, 2016
Finding the right contractor for a major renovation is like finding a spouse. You have to have chemistry, you have to be on the same page, you have to trust each other, you have to love pugs, and you must share a passion for Korean barbecue (oh, scratch the latter two—it’s not totally like finding a spouse). And while there might be more than one Mr. Right, there are plenty of Mr. Wrongs who can transform your beloved renovation project into a nightmare (and give new meaning to the term “punch list”).
In 2011, the average U.S. homeowner spent $2,889 on home improvements—it’s a pretty penny, but a fraction of the cost of a big project like a major kitchen overhaul ($60,000) or bathroom renovation ($18,000). So a lot of cash is at stake here, along with your mental health! Here are some matador-worthy red flags to look for when researching a contractor, and strategies for finding one you’ll love.

  1. They have lousy reviews

We live in a world saturated with social media, where it’s harder for bad contractors to hide. When you see a Yelp review that slams a contractor, your antennae should go up. Not that any one review is gospel; review sites often are battlegrounds for competitors who unfairly slam one another.
“Anyone can have one or two bad reviews from cranks or revenge seekers, but a pattern of problems or red flags should make you think twice,” says Sandy Edry, a real estate agent with Keller Williams in New York City.

  1. They’re not responsive

As in any long-term relationship, communication is key. If you have trouble getting a contractor on the phone before you give him your business, imagine how hard it will be for him to return calls after he already has your security deposit. Give a prospective contractor 24 hours to return your introductory call—48 hours, tops—before you move on.

  1. They insist on unlimited time and materials

The best way to wreck a budget is to sign a time and materials contract that puts no fence around expenditures. Make sure a contractor offers you a flat fee for a project and specifies how much change orders will cost. If he won’t, walk. Or run.

  1. They lack a sense of humor

When it comes to home renovations, Murphy’s Law (anything that can go wrong, will) might be a bit exaggerated (although we know quite a few homeowners who’d beg to differ). No matter what, you should be prepared for at least one unexpected problem to arise. Look for a contractor who can keep his footing when things get rocky, and has the expertise to remain calm—and to help calm you down—while sorting out a solution.

  1. They overpromise

Before you sign a contract with anyone, do your homework to get a rough idea of how long a project should take and cost. Remodeling’s Cost vs. Value annual report provides national averages for popular projects and is a great resource. Beware of contractors who offer you a much lower price and faster delivery. If it sounds too good to be true, it probably is.

  1. They have outdated references

Good contractors have a constantly revolving list of new and satisfied customers. If they can’t provide a current reference, perhaps the quality of their work has dropped.
“You don’t want any old references,” says David Reiss, research director for the Center for Urban Business Entrepreneurship in Brooklyn, NY. “You want references for recent and current jobs, and for jobs that are similar to yours.”

  1. They ask for too much money upfront

Most contractors ask for money upfront to secure your place on a calendar or begin buying materials. But a contractor who asks for more than 15% upfront should elicit an uh-oh feeling.

  1. They don’t get permits

Permits are expensive. But unless your scope of work is simply pulling and replacing appliances or cabinets (vs. moving or adding wires, studs, walls, outlets), your job should be permitted. If a contractor waives permits as an unnecessary expense, wave him away. Building officials can shut down a nonpermit job. And without a municipal building inspection, you have no assurance that the job is being done correctly and safely.
How to find a great contractor
Now that you know the danger signs, let’s focus on the positive! Here’s how to find a contractor whom you’ll want to use over and over again.
Investigate the heck out of them
The internet is your best aid for finding and vetting a contractor. Many sites (e.g., Angie’s List) provide recommendations. Poke around on Nextdoor or your neighborhood’s Facebook group, and ask your neighbors for leads. When you find a candidate, Google his or her name and see what comes up. Do satisfied customers sing his praises? Do lawsuits turn up? If you find more negative comments than positive, you should probably keep searching.
When you get a referral, dig deep for info
There’s asking, and then there’s asking. When you get a name, drill deeper into the experience. Ask the following: Was the contractor reliable? Did the work come in at the price promised? How soon did he return phone calls? Was the contractor responsive to concerns and changes? You want a firm yes to these questions. If you sense hesitance, make like a reporter and investigate.
Get several bids, and don’t let a low price dictate your choice
It’s best to get bids from at least three contractors. Throw out both the lowest bid, because it’s probably overly optimistic, and the highest bid, which probably has a bit too much profit for the contractor. The middle bid often is the most realistic.
Check licenses and litigation
Although each state has its own oversight strategies for contractors, most require general contractors to be licensed. Also, check state disciplinary boards, local court records, and the Better Business Bureau for problems. Pay special attention to the nature of the complaints and the way the contractor responded.

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