Whether you want to renovate your home or expand your office space, choosing the right contractor is critical. If you hire a bad contractor, you could find yourself dealing with a never-ending project or one that results in construction defects. You might end up spending much more than you budgeted and have to hire a different contractor to repair the mistakes made by the initial one. Here are nine red flags you should watch for when you are interviewing prospective contractors for your project.
1. Poor Communication Skills
A contractor needs to have good communication skills so that they can keep you informed about what is happening throughout your project. If a contractor exhibits poor communication skills when you speak with them, displays a lack of confidence, or fails to listen to you, you should consider looking elsewhere. Miscommunications or lack of communication are reasons why many projects go awry.
2. Poor or No Reviews
When you are searching for a contractor, you should check potential candidates online and read their reviews. If you see that a contractor you are considering has a substantial number of bad reviews, you should treat those seriously. While some people might leave poor reviews for a business out of spite, having a large percentage of bad reviews indicates a contractor has a history of performing shoddy work.
Similarly, if a potential contractor doesn’t have any reviews that should also give you pause. A contractor without reviews might have rebranded themselves after dissolving an earlier entity. Alternatively, the contractor might be new and lack the type of experience you need. Ask the contractor about their experience and whether they have previously worked under a different name.
3. Can’t Provide References
A good contractor should be able to provide you with several references from past clients who have been satisfied with their work. Ask for photos of past projects and the names of several former clients who can provide the contractor with references. Make sure to follow up with any references you are provided to learn about their experience working with the contractor. If the candidate can’t provide you with references, that is a sign that you should move on.
4. No Proof of Insurance and Bonds
You should never take a contractor’s word that they are insured and bonded. Instead, ask to see a copy of their insurance and bond certificates. Check to make certain the contractor has workers’ compensation and general liability insurance, and also make sure they have a valid contractor bond. Most states require contractors to post surety bonds as a condition of being licensed. A contractor’s bond protects you in case the contractor fails to perform as promised or engages in unethical business practices. Making sure your contractor also has general liability and workers’ compensation insurance can help to protect you from potential liability if someone is injured while working on your project.
5. Lack of License or Unverifiable License
In most states, it is illegal for contractors to perform unlicensed work. You should make sure your contractor has the right type of license because it demonstrates they have achieved a level of competence and skill necessary to perform the work. Ask to see the contractor’s license, and make sure the name on the license matches the contractor’s name. Take note of the license number, and verify that the license is current and valid by checking with your state’s licensing board.
6. Asks You to Pull Permits
Contractors should pull permits to perform construction work from your city or county. If a contractor asks you to pull permits or fails to mention them that is a sign that the contractor might not be a good choice. Unlicensed contractors typically ask project owners to pull permits for them because they can’t secure them on their own. The person who pulls a permit will be responsible if anything goes wrong and might have to pay penalties and fines. Make sure the contractor pulls the necessary permits and assumes the burden.
7. Unusually Low Bid or Estimate
While everyone wants to find the best deal possible, going with a contractor simply based on their unusually low bid or estimate is rarely a good idea. Many contractors understand that homeowners and businesses have strict project budgets, and some who are unethical will leave out certain details in their estimates to secure a job. Unlicensed contractors might also submit extremely low bids as compared to others to try to get work. If one bid is much lower than others, you should carefully question the contractor about the details and reasons why they provided the estimate they did.
8. Vague Contract
When a potential contractor presents you with a contract, it should include enough detail to cover everything you have discussed. Don’t sign a contract that is vague about the project’s scope, payment schedules, start and end dates, responsibilities, or the types of materials you want. All of the details you have discussed should be included in the contract. You should also include provisions about what will happen in the event of a contractual breach. If details are left out of your contract, it will be hard to enforce it in court. Other items you failed to include in your contract will also come at an additional cost through a change order.
9. Requests for a Large Down Payment or Cash Payments
While you should expect to have to make a down payment to your contractor so that they can purchase supplies and big-ticket materials, the down payment should not be excessive. For example, if a contractor asks for 50% upfront, you should be wary. Some unscrupulous contractors demand high down payments and never return to perform the job. Some states cap down payments at a specific amount. Even if your state does not, you should expect to pay no more than 25% of the total value of your contract upfront.
The second payment issue that should raise red flags is when a contractor asks to be paid in cash. In this case, the contractor might be trying to avoid paying taxes, which indicates potential dishonesty. If you pay in cash, it also makes it difficult to prove that you paid the contractor for their work. Always pay by check or money order, and demand a receipt.
Thankfully, there are many honest and competent contractors. However, if you hire a bad contractor, you could end up suffering significant losses and be forced to hire a different contractor to correct the mistakes made by the original one. Watching for signs that a contractor should be avoided can help you save money, time, and headaches.