Home improvement projects can be a great way to add value to your home, but they can also turn into a nightmare if you're the victim of a scam. Even the smartest consumers can get carried away if they don't know how to spot the warning signs. To protect yourself from fraudsters, it's important to know how to avoid a home improvement scam and what red flags to watch out for. When hiring a contractor for any type of remodeling or home improvement, make sure they are licensed and insured.
Get recommendations from people you know and trust, and check with the local Home Builders Association and consumer protection officials to see if they have complaints against the contractor. Avoid paying the contractor in cash, even if they offer to provide a receipt. The FTC recommends paying for home improvement services with a credit card or check that can be traced. Organizing funding is common for major home improvement projects, but don't let the contractor manage funding on your behalf.
A contractor can sign you a home equity loan that has a high interest rate or high fees, so make sure you know what you're getting into before signing any contracts. To ensure quality work, hire only contractors who can demonstrate their liability insurance and relevant licenses. If a contractor isn't insured, you could be responsible for any injuries on the job. Make sure your insurance covers bodily injury and property damage, so you're hassle-free.
Before hiring a contractor, get recommendations from neighbors, relatives and friends. While it's rare for a home improvement project to go from start to finish without some changes, some of those changes involve more material and labor costs for the contractor. An unlicensed home improvement contractor may offer you a discount because it avoids the costs of taking out the liability and workers' compensation insurance that is required of licensed contractors. Verify any statements the contractor makes about saving energy or increasing security, home value, or other benefits in addition to the improvements you are buying.
Fraudulent home contractors take advantage of elderly, inexperienced homeowners who can't do the work themselves and have little or no experience in home renovations. When you sign a contract to make improvements to your home, the contractor can legally impose a lien on the property. Someone who claims to be a home improvement contractor shows up at your front door and says that he has been working in his neighborhood and that he has plenty of supplies - this is another red flag that should not be ignored. It's not unusual for contractors to request some upfront payment for home improvement projects, especially if they have to order special items, such as cabinets or ceramic tiles. However, when you undertake any type of home improvement project, it's not the same as repairing a car or repairing an appliance - make sure you take enough time to visit the company, review your work, review the contract and find the best possible financing terms. To prevent home improvement fraud, it's important to know what red flags to watch out for and how to handle suspicious or dishonorable transactions.
Working with quality home improvement companies ensures that you have qualified contractors on the job who will provide quality workmanship and materials. From a small task such as a new lawn to an important job such as a finished basement, homeowners should take steps to protect themselves from potential scams related to home improvement projects. By following these tips and doing your research before committing to any type of remodeling or home improvement project, you can ensure that your project will be completed safely and successfully.
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