Six Warning Signs to Be Aware of Before Hiring a Contractor
Finding a contractor who will perform quality work at a
reasonable price can be a daunting task. It is always a
good idea to ask for and check references and to
contact the Better Business Bureau and your state
licensing bureau to see if there are complaints against a
prospective contractor. In addition, the following
warning signs can alert you to unscrupulous,
disorganized, inexperienced, or financially troubled
contractors who may deliver broken promises, bad
work, and blown budgets rather than professional
First Impressions: In any business, first impressions
are important. How a contractor presents himself and
maintains his truck, tools and equipment are good
indicators of how well he will take care of you and your
Beware Low Bids: Price is always an important
consideration when selecting a contractor, but don’t let
a low price or a special deal blind you to a potential
problem—both can be signs that you should be wary.
A bid far lower than others may indicate the contractor
isn’t experienced enough to know the actual cost of the
job or he never intends to finish the work. Disreputable
contractors may bid low to secure a contract and then
tack on extra charges as the job progresses.
Take Your Time: If you are pressured during the
bidding process by tactics such as “limited-time offers,”
look for a different contractor. Hiring a contractor is not
a split-second decision; for this reason, many states
give homeowners three days to cancel a home
improvement contract — without obligation — after
signing it. A prospective contractor should take his
time as well, carefully reviewing the specifications
of your job before submitting his bid.
Beware Materials Discount: A prospective contractor
may offer you a discount, hoping to earn your future
business following a job well done, but be wary if a
contractor offers materials at a discounted rate.
Discounted materials are usually seconds, ungraded or
below-grade minimums for code, any of which would
compromise the quality of your project.
Only 20% Up Front: While the price may be right, what
about the terms of payment? In general, do not choose
a contractor who asks for more than 20 percent of
the total cost of a job up front.
Beware Cash-Only Jobs: Finally, a contractor who
works on a cash-only basis raises a big red flag. Not
only does paying in cash limit your financial recourse if
problems arise, but the contractor is also likely not
operating a legitimate business, which includes paying
taxes and insurance.
Article Provided by Community Associations Institute
Action Steps for Your Association
- Ask questions. Make sure all your questions and
concerns are addressed in detail.
- Make sure you receive at least 2-3 bids. Do not
settle for just one bid. You want to have options to
- If you are unsure about a contract, do not be afraid
to receive legal advice.
- Are you and your manager taking the appropriate
steps to prevent selecting the wrong contractors
for projects in your association?
- Do your legal and management resources have
the skills to review contracting deals?