Top 6 Home Renovation Scams To Avoid

A great article about contractor's scams by Michael Sanibel, Investopedia.com

Oct 18, 2010

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Scam artists are nothing new, but there are plenty of reasons to predict there will even more of them due to tough economic times. While they tend to prey on the elderly, anyone who is not cautious and informed is a potential victim. Your best defense is a skeptical mind and knowing what to look out for when you hear that offer that's "too good to refuse." Here are some of the most popular, and costly, home improvement scams. 

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1. One-Time Special
It's a very rare business that's had only one sale in its entire history. The reality is that most businesses hold sales throughout the year, and that's not likely to change anytime soon. If a contractor approaches you with a special offer, ask for concrete evidence that the quoted price is lower than what they have charged in the past for the same work. This could include a past catalog, special mailing, a dated price list or evidence of identical work for a past customer.
Don't be pressured into accepting a deal that will expire before you've had a chance to do research, get competing bids and check references. 
2. I Might As Well
Be wary of the contractor who knocks on your door and says he's working just down the street. He tells you he noticed a few things that need some work on your house and that you could save money by hiring him on the spot. Coincidentally, he just happens to have all the materials and tools to start right away.
This approach is often used to entice you into doing things that are visible from the outside like roof repair, painting, window caulking, deck restoration, driveway coating and chimney repair. If the contractor claims to have all the materials, ask him where they came from and who paid for them. If they are left over from an earlier job, there's some chance that the previous homeowner footed the bill.
3. Cash before Work
Nothing should set off more alarm bells than the contractor who wants to be paid in full for a project before it's started. This arrangement sets you up for a disappearing contractor who never starts the work.
A reasonable down payment is expected to cover startup labor costs and materials. Normally, this should not exceed one-third of the total contract value and it's wise to make it as small as possible. The balance of the money can be tied to completion milestones to keep the contractor motivated to stay on schedule. Hold a sizable portion of the money until the project is finished, and make final payment dependent on your personal inspection and satisfaction. 
4. Financing Offers
Another warning flag is the offer to arrange financing to pay for your renovation, sometimes from a lender that the contractor knows personally. The offer may include a special interest rate for a limited time only. What won't be disclosed is that the contractor may be getting kickbacks or other favors from the lender.
If you don't review the loan papers carefully, you may later find out that you've signed up for a refinancing or high-interest home equity loan, or unknowingly transferred your deed. If the money goes to the contractor, there's no incentive to complete the work. Always shop around for the best loan available, and consult an attorney if you need help understanding the terms and conditions.
5. Fly-By-Night Contractor
Be extremely wary if a contractor pulls into your driveway in an unmarked truck. If you talk to him, do it outside in public view. Anyone that enters your home is a potential burglar, or worse. If the truck has out-of-state plates, don't even waste your time.
For all contractors, you should apply due diligence. Verify their name, business name and license number, address and telephone number. Ask for their insurance papers, and verify that they are bonded in accordance with applicable laws.
6. Model Home
Beware of the contractor who wants to fix up your home so he can show it off to other potential customers. In exchange for your agreement to the proposed work, you will likely be tempted with a deal that seems too good to pass up.
Chances are pretty good that some or all of the work he's recommending doesn't really need to be done. Reputable contractors don't need models to showcase their work and if they needed one, they wouldn't use an occupied home for that purpose.
The Bottom Line
Use resources such as the Better Business Bureau, Department of Consumer Protection, and the local license board to check the contractor's business reputation and credentials. A history of consumer complaints, lawsuits and expired licenses are all reasons to keep looking for a reliable contractor.
Common sense and good judgment offer the best protection from home renovation scams. If it seems too good to be true, it probably is. It's always wise to get multiple estimates before starting any project and if there are wide differences in the quotes, try to figure out why. Most importantly, don't sign any contract that you don't understand completely.






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We strongly suggest you attend this event at least once if you own your own home. The tour is a great place to find ideas for your home and see some of DFW's best architecture and design. For more information see my follower's list for the Art Institute's blog. My alma mater posts many events open to the public that cannot only inform you of the latest legislation regarding construction legalities but fun events for the family that can feast your eyes.

Dallas Residential Developer

CKD is not a firm that will bad mouth others but we will speak the truth when we see unethical treatment of clients. A certain developer in the DFW area, whom we once did design work for, has been treating some of our past clients with the worst possible customer service care. CKD was asked to remove themselves from these last two jobs and we gladly obliged due to their lack of professionalism. We can hopefully help these clients recover some of their assets and we will do so without payment because of the situation.  This developer has in turn told some untruth's about our company and we hear this from the client because they trust us and know that the situation is false. This will be the last time we specifically state the goings on of someone's company unless it's harmful to the general public. These two need to seriously consider another business. Maybe a career that involves a lot of greed and no emotional attachments. We'll let them work that out. In the mean time if you are considering a company to renovate your house and you feel you should know the name of the aforementioned duo, drop us a note. We will happily confirm or deny the name you give us in an attempt to save you time and money. After all the goal of starting a project is to finish it. Right?

Attention Landlords

After looking through a few income properties I'm noticing that landlords are not offering some of the same amenities that a tenant can find in an apartment. There are a few items that can be updated inexpensively to give the space some new shine without breaking the bank and allow you to compete with the big boys.

• Washers and Dryers- Provide a closet with new electrical and plumbing. It may cost a bit more than a paint job but it does give you return. 
• Refinish the Countertops- (Apartments do this, it's not expensive.)
• Provide new energy efficient toilets-This can save you  money and the tenant. Plus studies show that people are getting larger. A small round bowl doesn't cut it for today's average size.
• Crown Moulding/Trim- A 16' stick of trim can be around 20 dollars. Want to save? Just trim out the living room and entry. 
• Lighting/Electrical Fixtures- Update the brass. No peer pressure but everyone else is doing it. 
• Wall treatment- paint only 1 neutral color and a light or dark trim. Be consistent and leave the space blank. New tenants want to image themselves living there. They may not care for that pink floral wallpaper border you thought would really brighten the space.
• Plumbing fixtures- This can be costly if you decided to change out brands. Not all fixtures have universal valves especially in an older home. These can be refinished to brushed nickel. Hand towel holders and new mirrors can help the bathroom too. 

So those are just a few tips I have for all of you trying to rent out a piece of property or just purchasing an income property for the first time.

Remember to also clean before you show the property. Keeping a few simple cleaning items in the closet can help make a lease happen. You want to attract the right kind of renter.

Metroplex Rip-offs

One of the things we value most is honesty. Recently while going through a standard mailer, my biz partner found several ads for bathroom remodeling from whom will remain nameless. Nameless is charging around 3k for refinishing your bathtub and sink areas. Long story short, a contractor should do this for around 300.00. Now you add design service and ad 15 percent you get a final price. Why add the designer? After all you watch  HGTV right?

Wrong! Designers are more than just flair, color, and fluffy pillows. We organize, coordinate, and bid your projects so that you get the best value for your money. Designers have the best resources and spend countless hours researching and preparing your project. Doesn't 15% seem small for the amount you receive? 

Watch out metroplex, some handymen are selling services without an educated background to manage it. You truly get what you pay for but in the case of nameless you really don't.