How To Know If A Contractor Is Taking Advantage Of You

Contractors are a crucial part of the renovation marketplace. Many homeowners love digging into a home improvement project on their own, but renovations, repairs, and remodeling opportunities can quickly spiral out beyond the effective skill level of a homeowner. Adding a new room, retiling the bathroom, and installing a new vanity, or sprucing up the kitchen with new cabinets and countertops can be labor intensive and stretch the abilities of a typical homeowner beyond their breaking point.

Hiring a great contractor to tackle these improvements is the best course of action for any update that you are looking to make, yet lack the expertise to perform on your own. A contractor will be your greatest ally, but selecting the right one is crucial to getting the most out of your renovation.

While most contractors are honest and hardworking small business owners or independent workers for hire, there are a few out there that may try to bend the agreement unfairly in their favor. This Old House notes that phone interviews and face-to-face meetings are some of the best ways to gain a better understanding of individuals you may end up working with. These conversations can shed light on the general business approach that a contractor takes, giving you a better sense of the individual. Still, there are some red flags to keep in mind as you approach the hiring process for any home improvement project.

One way to spot a contractor who is trying to take advantage of you is to consider the sales techniques they are employing. In the modern marketplace, there is little need to pressure homeowners into signing a contract or agreeing to work in principle immediately, according to Reader's Digest. Contractors who leverage details about their busy schedules (whether true or a fabrication to sell the urgency) are often doing so just to close a deal right there and then.

Homeowners are engaging in a huge volume of home improvement projects, and have been at this pace for many years (via Harvard University Joint Center for Housing Studies). This means that contractors cannot reasonably justify either the assertion that only they have the experience to complete the job or that schedules are so tight (with not enough contractors around to fill the needs of homeowners) and that signing now will be the only way to ensure that the project is actually completed.

Either approach — both commonly used by contractors looking to take advantage of a homeowner who might not know better — is just a pushy sales tactic that sheds more light on the individual than the specific project or the industry more broadly.

Pushy sales tactics are problematic for homeowners who are trying to build up a reservoir of trust with a contractor, but these aren't the only demanding terms that may be involved in an encounter with a contractor that isn't entirely trustworthy. As a homeowner contracting out work, it's in your best interest to pay the team as slowly as possible. This keeps the money in your pocket longer and holds the leverage in your favor as well. The more work a contractor does before he or she gets paid (again or for the first time in the agreement), the more likely the work is to be done well, under or at budget, and within the contracted timeline.

If the balance shifts out of your favor and the contractor has been paid for more work than has actually been done, you may find yourself at the mercy of the contractor's timeline and whims rather than your own. In the worst-case scenario, a truly bad-faith contractor could just walk away from the project and pocket the overage, citing some potential loophole in the contract or through a manufactured disagreement.

Reader's Digest notes that one key milestone is in the deposit that a contractor takes. A figure north of 30% may indicate that the contractor is having cash flow troubles and plans to use a portion of your project's funding to work on another.

Forbes Advisor reports that you should always work with a contract when hiring a contractor to perform any kind of service on your property. A contract spells out the costs associated with the work as well as the expected deliverables that your contractor will complete during the renovation.

A written contract protects both you and your contractor from disputes that may arise later on in the project. If the contractor you've been speaking to about alterations to the property suggests starting on the work without signing a contract, this should raise an eyebrow. Contractors who are in good standing with their communities want to perform a positive service for any homeowner that hires them. This includes the use of written terms that will govern the working relationship. A contract makes for a clear path from start to finish, along with milestones, payout schedules, and perhaps even a target or guaranteed end date for the renovation. Signing a contract eradicates any doubts or confusion that are sure to be present with a verbal agreement. This is great protection for contractors, and it works in the same capacity for homeowners, as well.

This means that a contractor who offers to work without one may be setting the stage to take advantage of the lack of clarity that results from this arrangement. Disputes become a war of words, opinions, and assumptions rather than facts and figures.

The best way to understand how a contractor will work out for your particular project is to speak with one (or many). Talking to contractors and contracting companies over the phone is the first step to finding a good partner for your project, according to This Old House. In an initial phone consultation, you can speak with contractors about their typical pricing for jobs your size, former clients that have hired them for similar work, and their background and typical team layout.

After speaking on the phone, it's good to meet in person if possible. Ideally, you'll meet a prospective contractor at your home to show them exactly what you have in mind for the project. This is a great opportunity to explore the renovation in greater depth, but also to gauge the kind of individual you are going to be working with (or passing on). Reader's Digest notes that inexperienced or unprofessional contractors may fall back on a dismissive attitude in an effort to provide little upfront detail about how they will complete the job or the types of relevant experience they have with this kind of work.

A dismissive attitude can gloss over deficiencies in other areas of the contractor's background, or it can be used to create a vague outline of the project that can warp and become far more expensive once the work has gotten underway. Pressing contractors for specifics and details can help clarify things.

Your gut is a great detection tool. Trusting your instincts may not give you a coherent understanding of why you don't trust or like a certain contractor, but it can point you in the right direction. If you have been speaking with a professional about your renovation and get a bad feeling when discussing the details of the work, payment schedules, or their own background in the industry, you might be best served by simply walking away and finding a new professional to perform the work, according to Reader's Digest. Even without a concrete reason not to hire someone for your home renovation, the lingering distrust can place a dampener on the relationship and leave you wondering whether the job was done right for months or even years after the team packs up and walks away from your property for the last time.

The gut feeling that you have about a contractor can surround the vibe the person gives off, or it can come in relation to a shared vision or disconnect when it comes to bringing your dream home modifications to life. If you have doubts about a contractor, it might be better to look elsewhere for the help you need.