It is also wise to pay a home contractor with a credit card instead of forking over a wad of cash or paying with a check. This will give you a record of the payment for the authorities and improve the odds of getting your money back if you are swindled, since credit card companies may refund your money in such situations.
If the proposal isn't very detailed, that might be a red flag. A home contractor who plans on putting a fence around your yard or fixing your roof isn't likely to offer up lengthy, detailed plans, but if you want to hire a contractor for a fairly elaborate project, such as a room addition, you'll want to see some detailed blueprints.
"The less gray areas there are, the better off homeowners will be," says Nicholas Iarocci, who owns a home contracting company, Source Development, Inc, which services the New York City area. He says detailed plans can "make the homeowner aware of possible additional expenses," which can help you if the contractor is ethical and if the contractor isn't. After all, some unethical contractors deliver when it comes to work, but they overcharge. Or they might not plan to destroy your finances but do because of the shoddy way they run their business.
"If an insured contractor brings a day laborer or an employee that's not on the books, and they get injured, the property owner is directly affected," says Iarocci. "I collect certificates of insurance from my subcontractors."
Don't let yourself be rushed into a project. Some perfectly honest home contractors will come to your house unsolicited, says Matthews. "They're called storm chasers," she says, "and there are some very credible contracting companies that look for homes that have been hit after a windstorm or heavy rain, but you still have to do that background check to make sure."
So if the contractor can't wait for you to think about their offer, or for you to summon your inner Hardy Boys or Nancy Drew and check them out, stay away. And you should always keep an eye out for that classic red flag waving in the warm, friendly breeze. Sadly, just as there is no free lunch, there is also rarely an extremely cheap lunch.
Says Matthews: "If someone offers to do a really quick job on your house for a really low price, and it sounds too sound to be true, it probably is."