You’ve finally decided to get that project around the house completed and have saved money and arranged the financing for it. You’ve got an idea of what you want done and have a few guys in mind to do the work for you. The only thing is, they aren’t licensed for the trades you need.
You think to yourself: a licensed contractor will cost a fortune! You hastily make a call to the guys you already know; one is an out of work factory foreman and the other is your cousin that says he can do it for less than half of what a contractor will charge.
Looking at your finances, you say to yourself: I can save a few bucks and get the project done. What a great deal! You can keep more of the money to yourself in this tight economy!
And if your cousin doesn’t work out, you can always squeeze a legit contractor pretty easily — they need the work. Heck. You might even do some of the work yourself. It can’t be that hard to do stuff. You watched the DIY channel and it seems pretty easy. Right?
Save money now, pay more for it later.
In reality, legitimate contractor’s charges are justified according to their overhead and the costs associated with running a legitimate business.
They must pass muster at the licensing board; completing the necessary tests and exams related to business law, trade law, RRP compliance (Repair, Renovation, and Paint), as well as continuing competency.
Also, a coherent remodeling company will carry proper liability insurance and Worker’s Compensation for their employees. Liability insurance is to protect the homeowner — should a worker get injured at your home.
Most unlicensed guys don’t carry this insurance; they could get injured at your property, then turn around and sue you for their injuries — and win!
A license says that the person is trained and passed a test related to their particular trade. Most unlicensed guys don’t complete projects to standards set by the trade in which they are practicing. Thus the “save money now, pay more for it later” statement.
The homeowner in turn, will eventually have to find a legitimate contractor to redo a project that wasn’t done correctly. They will have lost money to the first guy, while paying for the project again.
A quick note: any projects under $599 in the State of Michigan can be completed by unlicensed persons. Anything over that, you must hire a licensed pro.
In states that require licensing, it is against the law to hire an unlicensed guy period.
There are several scenarios in which the homeowner has lost — due to unscrupulous people they hire. Why would you want due diligence? Because your home is where you live and spend a great amount of time at.
Your dollars should be very important to you. When we discuss money into the thousands, you certainly should want the best money can buy — to get your project done right the first time.
Took a deposit and ran.
This is the favored tactic by unscrupulous “contractors”. You give a guy half or more down payment to do work at your home. He says he needs more for materials and you relent. He climbs on the roof, yada, yada, yada.. and shows up for 2 days STRAIGHT.
What a great deal you got! He only charges half of what everyone else does. We all want a great deal, right? This is the tactic most fall for.
The homeowner is inclined to save money and the “contractor” is playing off of this human emotion. The greedy is stealing from the greed.
So, the “contractor” does a little roof tear off, and may even arrange to have materials delivered. Next thing you know, he won’t answer the phone and vanishes from the planet.
Soon, the supply house where the contractor got his materials is calling you, threatening your home with a lien if you don’t pay up for those materials.
We’ve all seen ugly work done by someone; whether it be from the DIYer or a hack contractor.
They’ll make wiggly cuts, dents in wood, and install products incorrectly that create mold and mildew. Hire the trained guy with licensing to keep your pocketbook safe!
A note about canvassers.
These people piss me off by knocking on my door unannounced. But see, the canvassers know that they will eventually run into a lonely senior citizen in the neighborhood that will open their door and be gullible.
Canvassers always appear to be in a rush to get you to hire them. They always seem to be able to start right away. Most legit contractors are pretty booked (usually) and will need a lead time of at least a week.
Confusion over contract terms.
Never sign a contract that has blank areas or areas where someone could fill in later. Always make sure you understand all terms of the contract and agree to the terms. If you don’t understand something, make the contractor explain it to you.
Above all, make sure you have a copy before he leaves. Also, make sure to check and see if the contractor has been disciplined or his license revoked. Finally, make sure all verbal promises the contractor makes are written into the contract.
High-pressure sales tactics.
The license the contractor shows you should be for the state you live in. Other states don’t count. If an unlicensed contractor nails you, you have no recourse.
The State of Michigan backs you up should any issues arise. Most legit contractors care about maintaining their licenses and will make sure you’re satisfied.
Unlicensed contractors often go door-to-door claiming they “just finished a job down the street”. They may rush you and say, “if you act now, you’ll get a special price”.
Unlicensed contractors either neglect to pull construction permits or ask you to do it for them. If you do, you are assuming liability for the project, including the contractor’s mistakes.
The key here: most people won’t check out a contractor until after everything goes wrong. Check them out first and things will turn out much better.