4 Red Flags to Watch for when Choosing a Contractor

Published July 8, 2014
General contractor - Handyman
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It’s always disheartening to see stories in the news of homeowners losing their hard-earned money on contractors who take money upfront to complete a remodeling job and then suddenly go out of business before completing the work.

Homeowners out Thousands of Dollars

One of such stories comes from North Carolina, where a kitchen remodeling business unexpectedly closed up shop while still owing customers tens of thousands of dollars in unfinished or unstarted work, according to ABC 11 Eyewitness News. Some customers were left with an incomplete kitchen while others received no work at all. The North Carolina Attorney General’s Office is investigating the issue, but in the meanwhile, many homeowners are worried they may never get their money back.

We urge you to be wary when choosing contractors for home improvement or remodeling projects. To reduce the chances of something like this happening to you, we’ve put together a handy list of red flags to watch out for.

Tips to Help Sniff out a Contractor in Financial Distress

1.) Beware of the Super Low Bid.

When getting multiple bids, be wary of the bid that is significantly lower than the other bids you receive. Companies in financial distress are cash strapped so they are desperate to get cash flowing in their door. Their answer: low-ball their quote in order to secure your deposit. Once they get your deposit, they’ll typically use the deposit to pay off past due bills for another job they’ve completed. Until they receive a deposit from a future client, they won’t be able to pay the manufacturer of the products to build your order. Then you’ll hear excuses after excuses as to why there is a delay in getting your project started.

2.) BBB Is Your Friend

Check with the Better Business Bureau (BBB) to see if the company you plan to work with has any current or past complaints. If the company has a history of complaints, especially those related to work delays, it can sometimes be an indicator that the company is having financial hardship. Suppliers of contractors that are going through financial hardship will normally put that contractor’s account on hold until past due balances are paid off first. If the contractor is not in a position to pay off past debts, then they won’t be able to order the materials for your project.

3.) Suppliers or Manufacturers Are First to Know.

Check with the contractor’s suppliers to see if they are in good standing. Ask the contractor who they normally buy materials from and then ask if it would be okay for you to talk to the supplier directly to verify that they are current with their payments. A contractor in good standing should welcome that question because they have nothing to hide. Then ask the contractor if he/she can tell the supplier that you will be calling and to give the supplier permission to inform you whether they are current on their account. Normally a supplier will only be able to tell you something to the effect of “yes, they are current and in good standing.” If a contractor offers this information up to you without pause, then that in itself may tell you that they are in good standing. If the contractor drags his or her feet or refuses to have his or her supplier disclose this information to you, then this may be a red flag.

4.) Visit Their Office or Showroom.

A place of business outside of a home office does not always guarantee that the company is financially sound; however, it does make you feel more comfortable knowing that you can find the person or company if you have any problems. Additionally, by going into a contractor’s office you can sometimes come away with clues about the state of the organization. Are there a number of empty desks or is the office locked up during business hours? Do the people in the office seem stressed or unhappy? Does the showroom or office look un-kept? Although these signs don’t always point to a company with financial problems, it may give you some insight to the type of company you are planning to work with.

About Lake Washington Windows & Doors

Lake Washington Windows & Doors installs energy-efficient replacement windows, doors and siding for homes, apartments or businesses in the Greater Seattle area, including Bellevue, Issaquah, Kent, Renton, Sammamish, Woodinville and more. Our knowledgeable team has more than 50 combined years of window, door, and siding experience, so you can rest assured that you will have a professional, efficient and friendly experience. Contact us online to request an appointment or inquire about our products and services.

(Photo by Gualberto107 via FreeDigitalPhotos.net)


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Written by Lake Washington Windows

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