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David Mittleman
David Mittleman
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Six Home Renovation Scams to Avoid

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During these bad economic times, it’s not uncommon for desperate people to take desperate meaures. While scam artists are nothing new, you definitely want to watch out for those too-good-to-be true deals…especially when spending large amounts of money. For example, if you’re planning on re-modeling your home soon, make sure to read up on the six most common home renovation scams:

  1. One-time special: if a home remodeler tells you that you’re going to miss the once-in-a-lifetime sale if you don’t act now, don’t take the bait. It’s not likely that any legitimate business is going to have one sale in it’s entire history of existence. If a contractor approaches you with a special offer, ask for concrete evidence that the quoted price is lower than what they have charged in the past for the same work. This could include a past catalog, special mailing, a dated price list or evidence of identical work for a past customer.
  2. I might as well: be wary of the contractor who knocks on your door and says he’s working just down the street. He tells you he noticed a few things that need some work on your house and that you could save money by hiring him on the spot. Coincidentally, he just happens to have all the materials and tools to start right away.
  3. Cash before work: NEVER pay before the work is complete…this should set off alarm bells for you. It is asking for a disappearing contractor, one that will take your money and run.
  4. Financing offers: another warning flag is the offer to arrange financing to pay for your renovation, sometimes from a lender that the contractor knows personally. The offer may include a special interest rate for a limited time only. What won’t be disclosed is that the contractor may be getting kickbacks or other favors from the lender.
  5. Fly-by-night contractor: be especially wary if your "contractor" pulls into your driveway in an unmarked truck. If you talk to your contractor, do it outside, in public view. A supposed contractor could easily be a burglar waiting to gain access to your home. For all contractors, you should apply due diligence. Verify their name, business name and license number, address and telephone number. Ask for their insurance papers, and verify that they are bonded in accordance with applicable laws.
  6. Model home: be wary of a contractor who claims he wants to fix up your home to show it to other potential customers. It’s pretty likely he will recommend fixes that don’t actually need to be done.

The best approach is to use common sense and caution. In addition, use resources such as the Better Business Bureau, Department of Consumer Protection, and the local license board to check the contractor’s business reputation and credentials. A history of consumer complaints, lawsuits and expired licenses are all reasons to keep looking for a reliable contractor.