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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

choose from.

- 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?

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