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"The most I will ever give somebody upfront -- after I have called references and checked him out -- is one third of the money," he says. He pays another third when the project is halfway done. "Their profit is in their last payment; that's what going to keep them on the job."
'I have a special offer that's good for today only'
If a contractor is offering a "special deal," ask him to legitimize what he is offering. Though this is a common sales technique, you can ask for documentation of this bargain -- a flier, for example, that the contractor has mailed or delivered in the past. Or one from another contractor at a higher price."Anytime a contractor puts pressure on a homeowner to act quickly about making a remodeling decision, that's a red flag," Zidek says. Remodeling decisions should be made carefully, not hastily.
'I can help you finance the project'
Sometimes a contractor will suggest you borrow money from a lender the contractor knows. This could indicate a home-improvement loan scam, as the contractor may be getting kickbacks from the lender.Homeowners may believe they're financing a small remodeling project loan, when in fact they're signing for a much larger loan, if not completely refinancing their home. Never finance through your contractor without shopping around and comparing loan terms.
'I want to use your home as a model'
The scam centers on the idea of using your home as a vehicle, or "show home," to advertise their services in return for a hefty discount.Established contractors should have completed enough previous projects that they won't need your job as a demonstration.
Still more scams
Though any part of your home could be a target, many scams tend to center around driveways, roofs, chimneys and furnaces:- Driveway sealant scam. If a contractor offers to seal your driveway for a heavily discounted price, find out what materials will be used as sealant. Cheap, inferior substances may look great initially but will wear off in three months.
- Chimney repair. These scam artists often lure their victims via advertisements in local newspapers offering gutter cleaning at a cheap price. Once the work is performed, they claim the chimney is in dire need of structural repairs. To provide so-called evidence of this, they will make it look like the chimney is in a state of decay by removing bricks and mortar from the chimney. Note: There might be decay if you burn a lot of wood and don't get your chimney inspected every year. Another chimney scam is when a contractor says there's a threat of carbon monoxide poisoning if the chimney is not repaired immediately. This is a serious concern, so if you are unsure about whether to trust this person, get a second opinion from a reputable contractor.
- Hot-tar roofing. Contractors often use substandard materials. You may not realize you've been duped until heavy rains cause the roof to leak. "If you're having major work done, ensure that your contract has a holdback clause where you withhold the final payment until 30 days after completion of a project," Levinson says.
- Furnace repair. Once they inspect your furnace, they may claim it is leaking dangerous gases or is about to explode. Ask your utility company to come and inspect your system. Also be wary if they tell you the unit is too small or needs a complete overhaul. When choosing a contractor, always get several estimates on the needed repair.
- Duct cleaning. Only in very unusual circumstances do ducts need to be cleaned. The scheme is called a "blow and go" because the scam artist will use a small vacuum cleaner with no special filters to stir up the dust, pollen, mold and other contaminants instead of removing them. Duct cleaning can be necessary if there is mold in the house or if the heating or air conditioning has been running with inadequate or nonexistent filtering. If you change filters regularly, your ducts don't need to be cleaned.
This article was reported and written by Alana Klein for Bankrate.com.
Published April 25, 2007
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