Tips for Avoiding Crooked Contractors
When you are looking for a contractor or crew to do property
repairs or renovations, there are some steps you should
follow to avoid doing business that could go south. Though
I hold the belief that most people are generally honest
and don’t intentionally scam people, issues arise
and there are important things you can do too avoid problems
When you have a project on a timeline, you need to protect
yourself and do everything you can to make sure things go
as they should and within your budget. When investors
run into problems it’s because they don’t understand
what a project entails and they are not as prepared as they
should be. Here are some steps you can follow to avoid these
issues right from the beginning.
- Network for References – Aside
from getting references from contractors (which you should
always do) network with others on your power team for
Not only are you better off getting more reliable contractors,
there are a lot times you can get a discount as a “referral”.
When you get references, check to see that the quality
of work matches what you want done. Someone’s idea
of a “good job” may be very different from
- Interview Several Contractors –
Bids for a project can differ dramatically from one contractor
to another. Though higher bids help for negotiating purchase
price, we all know paying more for work doesn’t
necessarily mean higher quality workmanship.
Some contractors will provide steeper bids based on their
workload, your lack knowledge or even your pocket book.
Along with checking references, make sure they are specific
with how they came up with their numbers and what they
will do to complete the project. If the numbers, whether
too high or too low, don’t add up and they can’t
seem to explain it, it should be a red flag to you.
- Obtain License Information – Make
sure they are registered, licensed and bonded with the
state and provide you with copies of such. You can also
check with the state Bureau of Consumer Protection or
Consumer Affairs to see if any complaints, lawsuits, or
judgments have been filed against them.
- Communicate Clearly – Make sure
you communicate what you want done and make sure they
have the same understanding. If you have a difficult time
communicating with a prospective contractor in the beginning;
that should be a red flag to look elsewhere for help.
Additionally, while the work is being completed, it is
important to meet regularly to follow up on progress,
payments, and to tackle any issues before they arise.
- Get Everything in Writing – I’m
sure you have heard this before, and there is a good reason
for it! Even if you hit it off with someone and they seem
like a person you can trust, don’t depend on a verbal
agreement (This includes the little things).
Though I feel most people have good intentions, what one
person sees as “moral and ethical” may be
very different to someone else. Unfortunately, contracts
with a “handshake” don’t mean what they
used to. There are a lot of people now who will rationalize
an obligation later if they are not legally bound by a
written contract. For more extensive projects it is also
good to have an attorney look over anything you plan to
sign to make sure your rights and assets are protected.
- Utilize Payment Phases – Never
pay a large down payment on any project. Some may require
you put down 10% or 20% depending on the scope of work
involved, however, any more than this should be a big
red flag. This is one of the biggest mistakes I see people
make when hiring out work. You can avoid this by arranging
payment phases and including them in the terms of the
agreement. Also, before making the final payment on large
projects, get a completed lien release from the contractor
Overall, if you follow these steps your experience with
contractors will be much more smooth, positive, and productive.
In turn you will avoid a lot of the nightmares you hear
and read about. Hopefully these guidelines will give you
some added protection to help this aspect of your business,
as needed, to run more smoothly!
To your success,
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