Watch Out for These Nine Red Flags When Hiring a Contractor

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A good contractor is hard to find, especially one who does high-quality work quickly and affordably. You may get your home project or renovation completed on schedule and under budget, but you'll probably sacrifice a little bit (or a lot) of quality—or you'll get quality, but it'll cost you a lot of time and money.

While skilled work is of course worth paying for, you don't want to drain your savings for empty promises or unfinished projects, which is why you should vet prospective contractors carefully and watch out for some common red flags.

They give you a bid that's too good to be true

As with so many things in life, if it sounds too good to be true, it is. You should get at least three bids for your project so you can compare prices as well as get a sense of how prospective contractors operate. If a bid comes in significantly cheaper than the others you request, you may be in for an unpleasant surprise down the line. Contractors may bid low to win your business, meaning you either won't get the full scope of work you want or you'll end up paying a lot more for it than you planned.

They ask for a lot of money up front

It's not unusual for contractors to collect a deposit when contracts are signed but before work begins, especially if your project involves costly or custom materials. But if you're asked to pay most of the total up front, don't. You should expect to make a down payment of 10–25%—some states even cap down payments that contractors can collect—and then pay in installments, with the last 10% or so reserved for when work is complete.

They try to rush into working without permits

While permitting for renovations can be a pain and slow down the process, do not let a contractor convince you to proceed without pulling permits, and do not give into a request to pull them yourself. The person who signs for the permits takes on liability for the project, including fines, and a contractor who tries to shirk this responsibility may be hiding past issues with their license.

They don't provide a written contract

Get everything in writing before paying a single cent for your renovation. Don't proceed with a contractor who doesn't provide a contract, and don't sign a vague agreement with terms you don't understand or that is partially blank. A good contract should include the detailed scope of work (including debris removal and cleanup), pricing, payment schedules, permitting responsibilities, deadlines, cancellation terms, and the contractor's name, address, and license information.

They are available right away

Again, skilled and trustworthy contractors are in demand, so if you get a bid from someone who says they can start your project right away, proceed with caution, and be sure to ask for references. There's probably a reason they aren't booked, and you don't want to find out what it is.

They don't respond to communication

If a prospective contractor takes days or weeks to return your calls during the bidding process—when they are trying to win your business—or in response to basic questions, you shouldn't hope for improvement when difficulties arise during your project. It's reasonable to expect a response within a day or two, and you should request clear communication policies in writing in your contract.

They can't (or won't) provide references or reviews for similar projects

Take the time to interview prospective contractors and ask them to provide references from work completed both within the last several months and back a year or more. Make sure the projects have a similar scope—a bathroom reno is different from hardscaping your yard—and ask each reference whether they were satisfied with the work, how challenges were addressed, and whether they would hire the contractor again. You can even request photos of the completed projects.

You should be skeptical if a prospective contractor has poor or no reviews on Google or Facebook (or home databases like Angi or Thumbtack), but you also shouldn't rely solely on online reviews, even if they are mostly positive.

They don't have a valid license or insurance

Hiring a properly licensed contractor increases the chance that their work is above board—complying with local building codes and homeowners insurance standards, for example. If a prospective contractor cannot provide you with this information, it's a major red flag. You can also check a contractor's license through your state's commerce department or professional licensing board. Licensed contractors are generally required to be bonded and insured, though the specifics vary by state.

They want payment in cash

Paying large sums in cash leaves no paper trail, and you want proof, such as receipts or a canceled check, in case your contractor tries to claim they weren't compensated. A request for cash payments may also indicate other questionable business practices.