10 Contractor Red Flags You Need to Watch Out For on Your Project
A flying red flag
When first entering the world of home remodeling, it may be difficult to know how to properly vet your contractor. What are the warning signs? How do I know when I’ve hit the jackpot? With 11 years in the remodeling industry and a trusted Lancaster home remodeler, here are 10 of the red flags we have seen the most of in bad contractors.
#1: They have no contract.
Contracts are one of your best defenses against any sort of mismanagement or low-quality craftsmanship. If you have no legal agreement between you and your contractor, they are at greater liberty to do a poor job. They can skip parts of your project, cover up bad-quality work with a nice finish, and leave you in a worse place than you started: work that needs to be redone with less money than when you started. Even though some don’t, contractors are legally required to give a contract in most states for that very reason. If they do not, consider it a major red flag that they are not a legitimate contractor.
If you were roped into a renovation without a contract, there are legal measures you can take if they did not fulfill their promised outcomes. In most states, you can prove the existence of an oral contract with any witnesses you may have, any sort of recorded conversation (emails, texts, phone calls), and payment schedules. The statute of limitations on breaches of contract is four years, so if your fraud happened during or after 2017, you can sue for damages.
#2: They are not registered under HIC.
In Pennsylvania, all contractors who work for over $5,000 per year must register with the Home Improvement Contractor (HIC) registry. This registration shows that the contractors follow legal protection requirements for their company. This means they must have liability insurance for both worker injury and home damage. This registration also protects you from broken contracts and fraud. The HIC site allows you to search any contractor to see if they are currently registered (if you cannot find a HIC number on their website, you can search just by name). If they are, something like this ought to show up:
Note that this is not a state endorsement of the quality of the contractor's work, but it does show some level of legitimacy as well as protection from damages. Hiring a contractor without checking their licensing requirements is a bad sign.
#3: They ask for all in cash or payment all upfront.
Illegitimate contractors will often show their motives through their money practices. All-cash transactions are much easier to hide from taxation as they allow a company to fudge its numbers without a digital trail. This doesn’t mean that a good contractor would never accept cash, but they generally ought to have some sort of credit card or bank transaction option. If they do not, stay on your guard.
Asking for all the money upfront also enables them to cut corners with fewer financial repercussions. Once they have your money, it becomes much more difficult to get it back if they fail to complete your project well. Asking for more than 30% (minus material costs) upfront is against the laws passed in the Home Improvement Consumer Protection Act, so if they ask for more, stay away! Most good contractors would not go over 15% upfront. Providing clear payment schedules is essential for a successful project.
#4: They have questionable references & reviews (or none at all).
If a company has been established for a few years, they ought to have available references, reviews, and a portfolio of their work. If they are not on their website, you may find reviews on Yelp, Google Reviews, or Facebook. If all they have are older reviews, it also may be a sign they declined in quality over the years.
Another form of questionable review is having only 5-star reviews. Hackers have found how incredibly easy it is to cheat Google Reviews for their benefit, and some companies use that to make fake positive reviews on their companies. However, they generally are easy to spot.
Fake reviews tend to have very little detail and always leave 5 stars. There also tend to be only a few reviews. If that is the case on Google, check all review sites to get a fuller picture of the company. A reputable contractor will most likely have a mix of ratings but an overall high score, and reviews with more specifics such as when the renovation was completed, what the project was, and commend a few of the employees by name.
#5: They have frequently changed their name.
This may be difficult to track, but if you notice multiple name changes within a short period, this may be a way to hide from a bad reputation or scathing reviews. If you do manage to find old company names, research them and see what you can find. They could be hiding decades of terrible service behind a new name and an old established date.
#6: Their prices are too low.
Generally, if a price seems too good to be true, it most likely is. This could lead to some very poor-quality workmanship and leave you in a worse position than when you started. It can be difficult to personally assess exactly how much your renovation ought to cost, so you can combat this by getting multiple quotes and comparing the prices. Often, the best quotes are the ones in the middle of the road.
Something to keep in mind when considering prices is the effect that the coronavirus has had on pricing in almost every field. The price of lumber and many other building materials has skyrocketed, so the cost of home remodeling will be higher now than it was even two years ago.
#7: They employ pressure tactics.
A professional contractor should never pressure you into making the sale—the decision should be your own. If you feel pushed around in the beginning phases of your project, this means you may be pushed around in the decision-making phases later on. This could mean spending much more money than you are comfortable with or making decisions without enough information. If your contractor doesn’t make you feel comfortable before making a decision, look elsewhere. Hiring a contractor is part of the design process, and pressure tactics are a red flag.
#8: They have poor communication.
Communication is another sign of how much a company cares for you. If they do not answer your questions or work you through the process clearly and with compassion, they show how little they care for the work they are doing to your home. A lack of communication leads to mistakes, a slow timeline, and uninformed decisions. This makes for an excruciating process where you are left in the dark without the control you need to do your part. You may not even know what phase the building process is in! If your contractor starts out with bad communication, they will most likely do the same thing throughout the entire project. So, look out for the warning signs early on, even before you sign the dotted line.
#9: They have rushed projects with a messy workspace.
This is a red flag that you generally only see after you have committed to the project, but if you pay attention, you may be able to catch it beforehand. If you hear something in passing or see it in a review, be aware. You can visibly measure how much a company cares for you by how much care they put into your house. If they rush into your project without taking time to focus on quality or leave your project a mess, they are showing you they don't care for your project. It may also leave you with outstanding cleaning costs, damage to your house, or low-quality work. A messy job site is a bad sign of how they handle their construction projects.
#10: They overpromise.
This may be one of the most frequent ways bad contractors misuse their clients: promising perfection on too small of a budget, then using up far more money than you ever hoped to use. If your contractor is not realistic about prices, they don’t show underlying costs or promise things you know to be unrealistic; they may be using this tactic.
This is abusing the psychological phenomenon called the “sunken cost fallacy.” When we already have a stake in something, we tend to pour many more resources into it than if we didn’t already have a stake in it, even when it makes no sense to do so. This is why you may go to an event in awful weather, even when you know you won’t enjoy it, solely because the tickets were $20. You're already invested, so even when it makes more sense to back out than continue, you’re much more likely to keep going. The same goes for renovations. When you are already thrown in the middle of the process, you are much more likely to throw more resources at the project than you were at the beginning.
To Recap
Selecting the ideal contractor is vital to ensure your project runs smoothly and meets expectations. Here’s a quick rundown of the top warning signs:
No formal contract.
Not registered under required licensing like HIC.
Requests all cash or full payment upfront.
Questionable or nonexistent references and reviews.
Frequent company name changes.
Unusually low prices.
Uses high-pressure sales tactics.
Poor communication from the start.
Rushed work with messy job sites.
Overpromises results beyond realistic expectations.
Contact Vatter Construction
At the end of the day, trust your gut. If you have a bad feeling about something, it may be for a valid reason. Research your potential contractors well, and make sure you trust them. Their job is to demonstrate trustworthiness, and if they do not deliver, they should not be responsible for renovating your home.
Looking to renovate or add to your home? Trust Vatter Construction—a reputable contractor with years of experience—to deliver high-quality results. Contact us today or get a quote from us to jumpstart your process!
Frequently Asked QUestions
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A good contractor will have a valid contractor's license, clear payment schedules, solid references, and good communication skills. They will also pull permits and provide detailed drawings when necessary, ensuring the process is smooth and transparent.
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Most states have online registries where you can search by the contractor's name or license number. For example, Pennsylvania has the Home Improvement Contractor (HIC) registry.
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A major red flag is a contractor asking for all payment upfront or only accepting cash. This violates most consumer protection laws and puts you at significant risk.
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Clear communication ensures that both parties are aligned on expectations, timelines, and additional costs. It prevents misunderstandings and helps avoid delays or mistakes.
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Yes, if you have a written or provable oral contract, you can sue for damages. Consult local laws, as the statute of limitations may apply.
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Check online reviews, their portfolio, and ask for references. A reputable contractor will have a mix of reviews, with an overall high rating and detailed feedback from past clients.
