Is My Home Improvement Contractor Being Fair?

By Jerome Graber,
October 21, 2020
Home | Is My Home Improvement Contractor Being Fair?

Residential home improvement contractors have a bad reputation for being scammers and crooks. Sadly, this reputation is deserved.

While many contractors are extremely honest and earn their money by providing great service for their clients, way too many rely on deceptive marketing, high pressure sales tactics, and other unethical practices to separate you from your hard earned money.

The following are “sales techniques” that so-called marketing gurus teach contractors to pressure and persuade customers into spending their money in ways that are not in their best interest, and how you can spot them and avoid them.

“This Price is Good Today Only”

There is nothing wrong with specials and sales. But when a sales rep tries to pressure you to commit to a project the same day they give you the bid by telling you that the price goes up if you don’t buy right now — watch out! It is virtually guaranteed that this means they know you can get a better deal elsewhere if you shop around a little bit before you buy. You the consumer do not necessarily want to go with the lowest bid for your home improvement project. But neither do you want to overpay for no benefit.

Don’t let an in home sales rep pressure you into buying anything before you have had the opportunity to compare prices and assure yourself that you are getting good value for your money.

“Zero Percent Financing!”

There is no such thing as zero percent financing. Any contractor that offers you this is paying a fee to the lender out of your total price to offset the actual interest cost. While this is not an outright scam in and of itself, you should be aware of it, and compare total cost to total cost before buying. If another contractor does not offer financing, or does not offer “zero percent” interest rates, but his or her contract price is lower, you may very well be financially better off going this route, even after adding in the interest costs you will pay on your loan. In almost all cases, your best financing option for your home improvement project will be with your own bank. Contractor financing can be a good option if your bank does not want to make the loan, but the true cost will almost always be a bit higher than your bank or credit union. Do not be taken in by this too good to be true offer and fail to do a true total cost comparison.

“We will Eat Your Deductible”

If you have storm or fire damage to your home, your insurance policy will almost always include a deductible that you are required to pay towards the cost of the repair. The deductible amount varies dramatically, depending on the policy, and can cost you the homeowner anywhere from a few hundred to a few thousand dollars. And as this work is unplanned, the unexpected expense can make this offer from a contractor to absorb the cost of the deductible seem very attractive.

Don’t fall for it.

Your insurance company adjuster almost always is very skilled at assessing the true cost to repair the damage to your home. No construction company can stay in business long doing home improvement work for hundreds or thousands of dollars less than what the work is worth. So how do they do it? Simply be skimping on the repair. Using sub-par materials, re-using vents or trim that the insurance company paid to replace, or sometimes in the worst cases failing to pay all the bills, leaving you hanging with a mechanic’s lien long after they are gone with the money.

A contractor’s bid will not necessarily match your insurance adjuster estimate to the dollar. But if a contractor pressures you to sign a contract with him before you even know what your insurance company is going to pay you for your claim by saying that they will do the work for whatever the insurance company pays and you don’t have to pay the deductible, that is a strong indication that you are dealing with a less than reliable company.

While these three are among the most common, they are not the only types of scams. But all scams fall into the same basic categories. Regardless of the exact techniques used, if what your contractor is offering seems too good to be true, or you are being pressured to act right now or you will lose your chance, then stay away.

Always take the time to be sure that you totally understand what you are getting into and are completely comfortable with your contractor and the project before you sign anything.

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