When I purchased my house in August 2012, I had no idea I’d end up spending upwards of $25,000 on home renovations and repairs in my second year as a homeowner. Like most homebuyers I got a home inspection; nothing major cropped up, although the inspector mentioned I would eventually need to get the retaining wall to my basement replaced. Little did I know “eventually” would end up being a matter of months.
Like a lot of homeowners, this year’s polar vortex did a number on my house. The first sign my home renovation bill was about to skyrocket was when I woke up one morning to find two inches of water in my basement kitchen. The flooding was caused by my retaining wall collapsing. While I can take care of small projects like painting, I knew this was far too big of a project to tackle myself, so I started phoning around for quotes.
Hiring a contractor for the first-time can be nerve-racking. Here are some tips to avoid being scammed by contractors.
1. The Lowest Quote Isn’t Always the Best
While it can be tempting to accept the lowest quote, it isn’t always the wisest decision. A quote that comes in a lot lower than the others can be a red flag. A low quote could mean the contractor is inexperienced or is planning to hit you up for more money later on. I received several quotes on my retaining wall; one quote was as low as $3,500, while another was a whopping $18,000. I ended up choosing a quote in the middle at $11,000.
2. Do Your Research
After reviewing several quotes, I made a shortlist of two to three contractors. Before making a final decision I did my research. I started by checking if there were any complaints filed on the Better Business Bureau (BBB) website. A website that really came in handy is HomeStars. I was able to find contractors in my area and read review from homeowners.
3. Shop Around
When it comes to TV sets and laptops we’re willing to shop around, so why don’t homeowners do the same for contractors? When you’re spending thousands of dollars on renovations, it’s a good idea to get bids from at least three contractors. The more complex the project, the more you should shop around. I ended up getting 5 quotes before deciding on a contractor.
4. Get Your Quote in Writing
Don’t be shy to ask for your quote in writing. A contractor who isn’t willing to put its quote in writing is a clear sign something could be wrong. By getting your quote in writing, you’ll be more likely to avoid misunderstandings. In my experience, a lot of contractors didn’t want to go through the trouble of putting their bid in writing unless I accepted it. While that may be fine for small projects like painting, I was undertaking a major project, so I wanted it in writing. If you don’t understand anything in the contract, be sure to ask before you sign.
5. Don’t Pay Too Much Up Front
A common contractor scam is to ask for a hefty deposit up front and disappear without ever completing the job. To avoid being a victim of contractor fraud, you should never give your contractor too much money up front. Even honest contractors can run into financial difficulties; you don’t want your contractor to file for bankruptcy before the job is complete. If your contractor asks for more than a 50 per cent down payment, it should be cause concern. Your deposit isn’t set in stone; you can often negotiate it with your contractor.
Do you have any contractor tips to share? Have you ever been scammed by a contractor?
Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians, available now on Amazon and at Chapters, Indigo and major bookstores, and as an Audiobook on Amazon, Audible and iTunes.