8 Contractor Red Flags

For most people, their home is their most valued investment. That’s why it’s important to do your homework and pick a reputable, dependable contractor to complete any home improvement, renovation or remodelling project. Choosing the right, or wrong, contractor to work on your home remodel or addition can be the difference between a successful project and one that flounders.  Here are 8 Contractor Red Flags to watch out for when looking for a contractor.

8 Contractor Red Flags

1. Few or no reviews

In most cases, reviews are going to give you valuable insight into the contractors you’re considering. And usually, more is better. They demonstrate a long record of experience, and assuming most are good, a satisfied client list willing to take some time to recommend them. If a contractor has little or no reviews, or none of them is good, then they might not be the right choice.

2. Poor communication

Communication is extremely important when hiring a contractor, no matter the size of the project. Your contractor should be in contact with you through every step of the process and keep you well informed. A lot of times, you can get a good idea of how effective a communicator a contractor is in your initial dealings with him or her. For example, is he or she quick to respond to e-mails or calls? Does he or she respond in a professional manner? If not, then it might be time to look elsewhere.

3. A quote that is too good to be true

It is common practise to get several quotations from different contractors. But if there’s one that seems too good (and low) to be true, that’s probably a red flag. A lower rate for you may mean the contractor is cutting costs elsewhere. Maybe they aren’t using the highest quality materials, or staying on top of the latest technologies. It could also mean the contractor isn’t carrying workers’ compensation and other insurance. Going with the lowest rate can have significantly negative effects down the road, so make sure you consider all your options.

4. Requesting upfront total payment

Generally, you can expect to be asked to pay a portion of your project cost upfront, but you should never be expected to pay-in-full before the project has even started! A contractor who wants your business should allow you to put down a deposit and then render the remaining amount of payment over the course of the project or upon the project’s successful completion.  Ensure the contractor has clearly outlined the payment schedule in the construction agreement, so you’re all on the same page as to when progress payments are due, and for how much.

5. Request for cash payment

Preferred payment type can be a red flag in almost any industry, but it’s especially concerning in contracting services. Cash leaves less of a paper trail. It’s hard to tax, and it’s even harder for holding a contractor accountable. Consider if there is something deeper you need to be aware of.

6. No contract

Documentation is the best way that you can protect yourself as a homeowner. When you conduct most of your communication verbally, you lose access to those records that help you ensure that you get what you want. With this in mind, get everything in writing before any work starts and ensure that everything is clear and unambiguous.

7. No license

One of the biggest contractor red flags is a lack of proper credentials. Checking whether your contractor is actually licensed to do the work you’re hiring them for should be high on your list. If they don’t have a license, that should give you cause for concern. This could mean questionable or, even hazardous work, on your project.

8. Lack of insurance

Contractors (regardless of specialty) should carry personal liability and property damage insurance. When you work with a contractor with valid liability insurance, you’ll be compensated for any damages on the property caused by the use of poor-quality materials or subpar work. It covers:

  • Damage Claims – Covers the cost of repair for damages caused by the contractor while doing work on your property.
  • Injury Claims – Covers court judgments and medical or funeral expenses should anyone get injured while on the job (this is different from workers’ compensation insurance).
  • Project Completion Claims – If the contractor fails to meet expected standards, the insurance will cover part or all of the cost of fixing the mistakes.

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