Top 10 tricks from Bad Contractors: Protect Yourself in 2025

Eric G.: 00:00:37

Foreign the house.

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But I wanted to make sure that we cover this really well and you understand it.

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One of the biggest problems when we're talking about paying with a credit card or a debit card with a contractor is not so much you paying them and the fees associated.

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But I have seen contractors get burned by upset homeowners.

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So the one I saw was a contractor that took the down payment and the cabinet payment on Visa, MasterCard or whatever.

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And I think what it was is the homeowner wanted to get their miles so they could pay for a trip.

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So they wanted to get their airline miles.

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Okay, I understand that.

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But the problem was is the remodel went along, they paid the deposit and their cabin deposit down on that cabinet showed up and the homeowner wasn't totally happy with the finish and I think the contractor was ordering doors or something.

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When it comes to remodeling and renovating your home, there is a lot to know.

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But we've got you covered.

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This is a Around the house welcome to the Round the House show, the next generation of home improvement.

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I am Eric G.

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Today we're going to be diving into a bunch of different stuff.

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But first we are brought to you by our friends over at Monument Grill.

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Eric G.: 00:02:11

Now I wanted to talk a little bit about here, our top 10 ways a bad contractor can scam you.

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And I tell you what, there's a ton of great contractors out there.

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But just like any career, any profession, there are those handfuls out there trying to take advantage of people and just absolutely doing no good.

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And so I'm going to really try to help you today to weed those out.

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So at least you are aware of these and if you've got a story, I'd love to hear it.

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You can contact me over to roundthehouse online.com love to hear your stories and maybe yours can end up in a future episode here.

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I've got 10 of them here that we're gonna talk about this hour and I think these can really help you.

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So at least you're aware so you can look for em if you're hiring a contractor out there.

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Now these are ones this is just not a end all be all at 10.

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But these are the most popular ones that I have seen out There that are probably the most common.

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And there's some great contractors, like I said, out there, that do all this stuff.

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And that's really where I'm gonna try to help navigate you to do this.

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And the first one here is a.

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This was actually inspired by a contractor that I've been watching up in Washington state.

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And every few years they just absolutely get nailed on this and end up in a lawsuit, ends up costing a ton of money.

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And they wait a few years and do it again.

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And this is changing the budget after the contract without changes in scope and costs.

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So what I see is they will start a project and they will go, okay, this is, we're going to do A through F here and we're going to spell it out.

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And your labor cost is this and your material cost is this.

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They break it out.

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The problem is they don't do a great contract that tells you what you're getting.

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And then over the next year or so they hit you with new upgrades.

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Even though scope and cost hasn't really changed.

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Now the funny thing is here is that, that this is where it gets a little bit sketchy, is that they ask for huge deposits.

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And we'll talk about that a little bit later.

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But these people primarily prey on higher end clients.

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And they come in and they're really trying to build the trust, build the friendship.

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Many of these people that they knew beforehand and they are luxury clients, so they're taking on remodeling projects that are 3, 4, 5, $600,000.

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And it's always fascinating to me to read the court papers because in Washington state you can do it.

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And I had somebody send me this, which was awesome, so I could actually read what's going on.

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And so that way you get at least the perspective of the plaintiff in this case and so you can see what's going on.

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And if you start to compare notes between different court cases, you can see the same process happens.

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And anytime that you're even tackling a 400 project, 500, 000 project, and they're asking for at least 50 or 60 or 70% down, you better have a nice, really good list of what's getting bought.

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And we'll talk about this later in the show.

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But this is one of those things that if you're in a luxury project, buyer beware, especially in the Seattle area.

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And what's happening here is that you're seeing people come in, they'll design it out, they'll give a budget.

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Now what should happen is if you have a contract and you're changing things to that contract, there needs to be a change order written.

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So if you've got a contract fully written out and you go, wow, okay, this is all said and done, start to finish, this is what it should be.

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If you're going to make changes, that needs to happen.

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And there are hidden things that will come up that can be big.

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But those hidden things should generally be addressed on the front end.

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If they're a good contractor, a good contractor will look at it and go, this house has been remodeled five or six times before.

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When we get these walls opened up, I don't know what I have to fix.

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That conversation should be with you, the homeowner.

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So these things should be addressed firsthand.

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And if you open the wall up and go, wow, I gotta reframe two walls, we gotta put new siding on the outside of the house, we gotta re insulate it, we gotta get this up to code.

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Totally get that.

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But when a contractor goes for the money grab just because they think they can get more money out of the client, that's where I get really upset.

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And I don't like seeing people take advantage of it.

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So buyer beware on a company in Seattle, that's something I'm not gonna name em out there, cause I'm not gonna get my name drug in the that mud up there.

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But just be very careful out there with high end projects of who you're talking to.

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And that can be a big deal.

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So watch out for that change in budget after the contract without changes in scope and costs.

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Now number two is a big one.

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And this is primarily where I see it is from a couple different places.

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Next door, that ad, that app out there, you see that next door you'll see Craigslist, you'll see Facebook, you'll see Facebook groups, that kind of thing.

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And these are contractors that are not being licensed, bonded and insured.

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Now here's the thing there.

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This is a very regional thing.

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Now in my state, in Oregon and in Washington, you are licensed through the state.

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But if you get up in the northeast, they could be licensed by the city, they could be licensed by the county, the township, they could be the state as well.

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So it's very different where you go.

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And there are some places that don't even really require contractor licensing.

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But if they're not licensed, they still should have insurance and a bond.

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And that's a big one.

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And here's why.

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And we've talked about this a million times in the show, but if you're just Joining us, I want to make sure to not skip over you in this.

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What can happen is if they're out there working and somebody gets hurt, guess what, if it's one of their employees and they're not a licensed bonded insured company, they're your employees.

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So you have to pay for their medical or their disability or anything else.

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So this is really one where you want to make sure that they're licensed, bonded insured and if they have employees that they're playing paying for the workers compensation insurance and check with your governing body for contractors to make sure that's all being done.

Eric G.: 00:08:39

Now the big thing with that is, is too is check when you're going through the quote process where you're weeding out the contractors you want to work with.

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Also the day you're signing the contract, the contractor's coming over going, hey, I'm going to meet you at your house, 3:00, get your checkbook ready.

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We're going to sign the contract that morning, call and verify that all those things are still in place.

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Because if weeks later they cancel that insurance, you might still be covered through the project.

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So it's good to check that stuff and make sure that's going.

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And again, that's one of those things that some states are really good at this.

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If the insurance company cancels their insurance, to cancel it, the first thing legally they do in that state is have to get a hold of that contractor's licensing department and notify them of the canceled insurance.

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So that's a big deal.

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So you want to make sure that you're covered there.

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So make sure that they are licensed, bonded and insured.

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Now when we come back, we've got some big ones here that are pretty sneaky and they could really save you some money on that next project.

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And what's so tempting with material costs and things like that out there right now that it can be really tempting to, to hire that person that's not licensed bonded.

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But oh, they're good, they're a handyman.

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It's that kind of thing, you gotta be careful because in some areas that even a handy person has to be able to be licensed bonded, insured, but you still want them to have all those insurances whether they're handyman or not.

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So those are things you gotta be careful with.

Eric G.: 00:10:06

So we come back, I've got eight more on this list to go through that I can help save you some money and a lot of headaches on that project.

Eric G.: 00:10:13

If you wann out more about us, head over to Aroundthe House online dot com.

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We'll be right back after these important messages.

Eric G.: 00:10:19

Don't go anywhere.

Eric G.: 00:12:59

What's up?

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This is Sticks it in ya and Satchel from Steel Panther and you are listening to around the House with Eric G.

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Yeah, we love Eric G.

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And you should too.

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1987.

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I never want to leave you when you told me.

Eric G.: 00:13:20

Welcome back to the around the House show.

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The next generation of home improvement.

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I'm Eric G.

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Just look for the around the House show or the real around the house show or you can head over to our website aroundthehouse online.com and if you're listening on the podcast and you don't want the commercials, four bucks a month you can get the premium episodes where you get the long form, you get some of the exclusive ones as well as commercial free.

Eric G.: 00:13:48

And you can find out more information at that aroundthehouse online.com well, we've been talking about my top 10 ways a bad contractor can scam you.

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And I'm trying to help you find the good contractors and those ones out there that are creeping around that you don't want to have.

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Here's some of the tricks that they use that are probably the most common out there.

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Now if you're just joining us, in the last segment we talked about change, changing the budget after the contract so they start bumping up the scope and the costs.

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Even though you have a contract but no change orders.

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The next one is not being licensed bonded insured, which is pretty common out there.

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Now the next one here on my list of my top 10 is hiring non licensed subcontractors.

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So maybe it's a plumber, but they're not licensed.

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Maybe it's an electrician that they're not licensed.

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Maybe it's a H vac Chuck in the truck.

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That isn't that person as well.

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So these are things that you kind of have to make sure that you kind of pay attention to and ask, you know, okay, are you going to have all the people coming out here, are they going to be licensed bonded insured that are your subcontractors, you know, the drywall guys, the painters, are they all license bonded and insured?

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And that is stuff that you know that can actually fall back on the contractor, not you.

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But it's just a good practice to make sure that you're having, you're paying for professionals to be out there.

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And if they're not licensed bonded insured, they're not the Professionals you're paying for.

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So I want to make sure that you've got the right people out there.

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And so it's really easy to find out, okay, who are the subcontractors when you're going to contract, who are they and who's coming to do the drywall?

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You know, ask the contractor, when you go into the bidding process, who do you subcontract through?

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Now, sometimes they will use one or two different electricians, one or two plumbers.

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They'll have the main one, the backup, because, you know, everyone has schedules to manage.

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You just want to make sure that everybody's licensed, bonded and insured, especially the contractor, like we talked about earlier.

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Now, the next one here can be gray area a little bit, but I want to make sure that we talk about it.

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And this one is not pulling permits when they say they're going to.

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Now, in some areas, they really want the homeowner to pull the permits.

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In some areas, the contractor pulls the permits.

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But a bad contractor that should be pulling the permits will try to talk you into going down there as the homeowner to pull the permits.

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Many times that's because they've been booted out of the permit office before.

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The permit office will see if they're licensed, bonded, insured, or they've had many run ins with them and they don't want to be seen down there because it could cause headaches.

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So these are all things you need to be careful for.

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So if in your area that you, the homeowner has to pull the permits, that's kind of common, but that's something you want to talk to the permit office about when you're doing it.

Eric G.: 00:16:54

Now, it is the wild West.

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In some states, like here in my area, you need to pull permits for a lot of stuff, but not roofing.

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So there's a lot of things like that that you have to know your individual area and the rules.

Eric G.: 00:17:11

But Generally speaking, in 90% of the United States, if you're doing it, if you're doing a remodel where you're moving walls or you're doing an addition or you're, you know, getting into electrical, plumbing, insulation, in most areas, and I say most, they want you to pull permits for that.

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So before you start the project, talk to your permit office, find out what they require.

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A lot of times you just go on their website it and see what they've got down there, what they require, you know, and in my area, it's pretty easy because it's, there's, you know, state laws are pretty much the building codes.

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And so it's pretty common across the state to you know what the rules are and what you have to do to follow those.

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So that's a good one right there.

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So just understand what your is going on in your area.

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And some states it's tough because you know, you've got a city or a county, township, whatever, and the rules are way different in between them.

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And that can be pretty troublesome for, for contractors in that area.

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So just understand your local stuff of what's going on.

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Now the other thing that's not pulling permits is not getting that final inspection.

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And that can really burn you in the long run when you're in these permit areas because you're paying for it to get through.

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And maybe, you know, so your job is before you write that last check, is to call the permit department and make sure that they have everything signed off before you close out the bill.

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Because I've gone out to homeowners, houses that had name brand high end contractors do the work.

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Did a great job, they're awesome, love it, perfect.

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These guys are rock stars.

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Except somebody missed final inspection day and didn't get it signed off.

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The problem is though is if you go back into this was on a kitchen edition and 20 years later they wanted to do a kitchen remodel.

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up into what was at the time: 2021

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So now the insulation didn't meet.

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There's a lot of things that had to be upgraded.

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And so unfortunately that whole addition had to have basically the drywall taken down.

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And maybe you can talk to a building inspector to see if they can, you know, sign off on the rules.

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're going to have to meet the: 2024

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So that can be a serious issue and that can add so much to the project.

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You know, I, I've gone out and done remodels on houses that, you know, where they converted the attic space into living space.

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You know, when they bought the house there was a set of plans that came with it showed stamped building permit plans for that, for that remodel that was done 40 years ago.

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Come to find out they never did that correctly.

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And then they had to go spend an extra hundred grand on getting that up to speed.

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And so be really careful to make sure that that stuff is done correctly because it can cost you so much down the road and that gets expensive.

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And that can be a simple mistake, not a scam.

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But just make sure that that stuff gets covered because that can cost you big money when you go down the road.

Eric G.: 00:20:39

Now, the other one here, and I'm going to talk about this before we go out to break, but it's a big one, taking too much money of a down payment.

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Now, down payments to me are two things.

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One, they lock you in to the process and two, they're paying for the materials that are custom that you have to order.

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And that's where we get into a rub.

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Some areas, the state laws only will let them do 10% down as a down payment.

Eric G.: 00:21:11

Now, when I was a kitchen designer and I had my own business because I had to order cabinets, I needed to have that 50 down just to place the first part of the order because I had to have that to pay for the cabinetry.

Eric G.: 00:21:25

You know, I'm gonna hit the pause button on this right now because we're running out of time.

Eric G.: 00:21:28

We need to go to break.

Eric G.: 00:21:29

When we come back, we're gonna continue this conversation about this because it's an important one around the house.

Eric G.: 00:21:34

Be right back.

Eric G.: 00:21:35

Don't change that dial.

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Foreign hey, this is Ron Keel, the metal cowboy from Keel, the Ron Keel Band and Steeler.

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We are rocking around the house with Eric G.

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Raise your fears.

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Welcome back to the around the house show, the next generation of home improvement.

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I'm Eric G.

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Thanks for joining me.

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We've been talking about my top 10 ways a bad contractor can scam you.

Eric G.: 00:24:47

And I had to stop because we're going out to break here for the radio.

Eric G.: 00:24:50

But I wanted to make sure that we cover this really well and you understand it.

Eric G.: 00:24:54

One of the biggest problems when we're talking about paying with a credit card or a debit card with a contractor is not so much you paying them in the fees associated, but I have seen contractors get burned by upset Homeowners.

Eric G.: 00:25:09

So the one I saw was a contractor that took the down payment and the cabinet payment on Visa, MasterCard or whatever.

Eric G.: 00:25:17

And I think what it was is the homeowner wanted to get their miles so they could could pay for a trip, so they wanted to get their airline miles.

Eric G.: 00:25:25

Okay, I understand that.

Eric G.: 00:25:27

But the problem was is the remodel went along, they paid the deposit, and their cabin deposit down on that cabinet showed up and the homeowner wasn't totally happy with the finish.

Eric G.: 00:25:36

And I think the contractor was ordering doors or something like that.

Eric G.: 00:25:39

They disputed the charges because it was going to take a month or so, which happens with cabinetry sometimes.

Eric G.: 00:25:45

They got mad and pulled get 20, 25 grand out of their account.

Eric G.: 00:25:49

So now that contractor who's working on other people's projects, he's already spent that money.

Eric G.: 00:25:54

That's gone now that comes out of somebody else's fund.

Eric G.: 00:25:58

So be a little careful, have some conversations.

Eric G.: 00:26:01

I want to make sure they're in a great financial spot, that if somebody pulls 15, 20 grand out of their account, that your project gets done for little single chuck on a truck contractors that can be debilitating for them because they just don't have that much built up.

Eric G.: 00:26:16

Now if you're a big corporation, you got 20 crews out there working way different story, way different story.

Eric G.: 00:26:22

So just think about that and just make sure that you understand the size and the risk with something like that.

Eric G.: 00:26:27

I've seen that get burned a couple times, and it was really painful.

Eric G.: 00:26:30

They made it through it, but it was painful because they had to get that resolved to keep the show the project going.

Eric G.: 00:26:37

And that really showed the hard work of the contractor and the homeowners to get that back on track.

Eric G.: 00:26:43

So we were talking about just taking too much of a down payment and just be very careful.

Eric G.: 00:26:47

You're following your local state's rules and that you're understand what you're paying the down payment for.

Eric G.: 00:26:53

That really should be just locking in the contract and of course paying for any custom materials that have to be ordered to get it going.

Eric G.: 00:27:00

So that's where that itemized contract comes in.

Eric G.: 00:27:03

So the next one here is an important one.

Eric G.: 00:27:05

This is my number seven on this list.

Eric G.: 00:27:07

These are not in a particular order, but just things that.

Eric G.: 00:27:10

That can burn you.

Eric G.: 00:27:11

So I just want to make sure that you're aware of these.

Eric G.: 00:27:14

The next one is not following local state laws.

Eric G.: 00:27:17

Those local laws, state laws, whatever it is, who's running the contractor program in contract writing and not putting in the actual scope of work.

Eric G.: 00:27:26

I don't know how many times I have people that are having contractor problems.

Eric G.: 00:27:30

They have a one page thing that says bathroom remodel, new bathtub, tile, shower, blah blah blah, name out what it is, put the price down, 50% deposit and it's done.

Eric G.: 00:27:41

And I'm like, oh no.

Eric G.: 00:27:42

First off, many states have their own laws for contract writing.

Eric G.: 00:27:48

if it's a house built before: 1978

Eric G.: 00:27:54

If the house was built before 4, they want to have an asbestos addendum.

Eric G.: 00:28:00

But you have to have all these different things depending on the state you're in.

Eric G.: 00:28:04

So understand what should be in that contract before you go to contract so you can be aware that if that contract is up to speed, and that's a big one right there.

Eric G.: 00:28:13

But I also want to see it very itemized out.

Eric G.: 00:28:15

And you know something, this is where I don't have a problem.

Eric G.: 00:28:18

Before you go to contract, if somebody says, hey, I'm going to give you an itemized invoice of what this is going to cost and if you have to pay a few hundred bucks to it that come off the project if you buy it, I'm cool with that.

Eric G.: 00:28:31

I am okay with homeowners paying for detailed estimates.

Eric G.: 00:28:35

If a contractor comes out and goes, I think this is going to be a 50 to $60,000 project.

Eric G.: 00:28:40

And you go, okay, that's in my wheelhouse.

Eric G.: 00:28:42

I'd like to see it itemized.

Eric G.: 00:28:44

And the guy goes, hey.

Eric G.: 00:28:45

The lady goes, it's going to take me probably a full day to get that written up with all the quotes and estimates.

Eric G.: 00:28:50

I'm going to charge you 500 bucks to do that.

Eric G.: 00:28:52

And that 500 bucks comes off your deposit on the project.

Eric G.: 00:28:57

I'm totally cool with them charging you for whatever their time is for that as long as it comes back off.

Eric G.: 00:29:03

Because I hate people working for free.

Eric G.: 00:29:05

And that's a big problem to me.

Eric G.: 00:29:07

That's a big problem to me.

Eric G.: 00:29:09

So don't be afraid of that.

Eric G.: 00:29:10

That's not part of the scam.

Eric G.: 00:29:11

I just want to make sure that if somebody does, I'm okay with that.

Eric G.: 00:29:15

Because busy contractors are up late at night, mornings, afternoons.

Eric G.: 00:29:19

They're not working when they're doing that.

Eric G.: 00:29:21

So they should be, you know, otherwise your project gets marked up and it's hidden that.

Eric G.: 00:29:25

So I'm okay with that.

Eric G.: 00:29:26

I'm okay with that.

Eric G.: 00:29:28

So make sure that they're following those scope of works.

Eric G.: 00:29:31

But I want to see all the details.

Eric G.: 00:29:33

I want to see every little detail on that thing.

Eric G.: 00:29:35

I Want to see allowances, I want to see all of that stuff for the line items.

Eric G.: 00:29:40

For instance, if I'm looking at a kitchen remodel, I want to go through cabinets are this price, countertops are this price.

Eric G.: 00:29:47

Knobs, the new electrical, the new plumbing, sinks, appliances.

Eric G.: 00:29:53

I want to see those things as an allowance in the project, what you're getting.

Eric G.: 00:29:57

Because one of the biggest things are in this scope of work, people think that they're getting 200, 200 piece knobs and the contractor priced out two dollar knobs.

Eric G.: 00:30:09

And that's what I worry about, making sure that you're getting the quality that you think you are.

Eric G.: 00:30:13

So that needs to be all part of that.

Eric G.: 00:30:15

So you're good to go.

Eric G.: 00:30:17

That should be all part of that thing to get you dialed in.

Eric G.: 00:30:20

So make sure you're good as gold for that.

Eric G.: 00:30:23

So that's a big one right there to make sure that detailed bit with the quality of the materials is in the budget.

Eric G.: 00:30:30

Now the next one here I want to do before we go to break.

Eric G.: 00:30:32

And this is a big one.

Eric G.: 00:30:34

Now when I see this is for kitchen and bath projects specifically, I want to see you as the homeowner on a kitchen cabinetry or a bathroom cabinetry project.

Eric G.: 00:30:47

I don't know if I'll even get through this before we go to break.

Eric G.: 00:30:49

But this is an important one.

Eric G.: 00:30:51

I want to see you have everything spelled out.

Eric G.: 00:30:55

So I want to see that design, I want to see the elevations, I want to see that it's been verified.

Eric G.: 00:31:02

I want to see that you've signed on the dotted line.

Eric G.: 00:31:06

Your initials are on every page of that.

Eric G.: 00:31:09

I want to see a color sample of the cabinetry, preferably a door sample in that or at least a color swatch.

Eric G.: 00:31:17

And that should be at least the size of a piece of paper.

Eric G.: 00:31:21

Eight and a half by 11.

Eric G.: 00:31:22

I want to see what that is.

Eric G.: 00:31:24

I want to see a door style of that and I want to see the construction of that cabinetry laid out.

Eric G.: 00:31:32

Now it's a lot easier when it is a manufactured cabinetry that you know, maybe from a big box store, from a kitchen, a bachelor room, where it's something that's common, right?

Eric G.: 00:31:41

Craft made American Woodmark Schuler, you know, could be decor.

Eric G.: 00:31:47

It could name a bunch of different brands.

Eric G.: 00:31:49

It could be any of those because they have set standards which are their standard construction.

Eric G.: 00:31:55

Where it gets gray is in your custom cabinet shops because they many times don't have a standard of construction.

Eric G.: 00:32:04

You don't know the glide you're getting.

Eric G.: 00:32:06

You don't know if it's particle board, if it's plywood, if it's a, where's the plywood coming from?

Eric G.: 00:32:11

Is it a frameless cabinet?

Eric G.: 00:32:12

Is an inset cabinet?

Eric G.: 00:32:13

Is it a face frame style cabinet?

Eric G.: 00:32:15

What is it?

Eric G.: 00:32:17

What's the construction and all that.

Eric G.: 00:32:20

So that stuff needs to be spelled out in detail and that could take up eight or 10 pages.

Eric G.: 00:32:25

But that should be all detailed out as part of that purchase because not only does that protect the cabinet company, but it also shows you what to expect.

Eric G.: 00:32:35

And that's the problem with lighter woods.

Eric G.: 00:32:37

For instance, if you're looking at really light woods like white oak or maple, it's wood.

Eric G.: 00:32:45

If there's certain minerals in the ground where that's growing, it could be a little more pink, it could be a little orange, and then those woods will change after time.

Eric G.: 00:32:54

So if we get exposed to UV light through a reflection off the lake, that walnut will lighten, the cherry will darken to a point, the maple will yellow.

Eric G.: 00:33:03

So you understand, hey, that's what's going on here because I want to make sure that you understand what's going on at that.

Eric G.: 00:33:09

And you can see what is in that because that's where the things come off the rails, even on a successful project is lack of communication, lack of understanding.

Eric G.: 00:33:19

What's going on is that fixed shelves, is half def shelves, Is it full depth shelves?

Eric G.: 00:33:23

Are they adjustable?

Eric G.: 00:33:24

All those things that should be all spelled out so you understand it.

Eric G.: 00:33:28

Now when we come back, I've got two big ones we're going to talk about and a few other little tips as well.

Eric G.: 00:33:35

And we'll do that just as soon as around the House returns.

Eric G.: 00:33:38

Now if you want to find out more or comment on this, head over to aroundthehouseonline.com and you can send me a message right there.

Eric G.: 00:33:45

All right, guys, we're right back.

Eric G.: 00:33:46

Don't change that top.

Eric G.: 00:35:38

All right, it's the end of the show.

Eric G.: 00:35:50

Now drinking down, people.

Eric G.: 00:35:51

It's time to go.

Eric G.: 00:35:53

Welcome back to the around the House show.

Eric G.: 00:35:54

The next generation of home improvement.

Eric G.: 00:35:56

Thanks for joining me today.

Eric G.: 00:35:57

I'm Eric G.

Eric G.: 00:35:58

If you're just joining us, if you want to find out more information about this show, head to aroundthehouse online.com and as well we are brought to you by our friends at Money McGrill.

Eric G.: 00:36:07

If you're looking for that brand new barbecue, trying to get it for the big game here this winter because you're having a big party, check them out@montymcgrills.com save a little money with a high Quality Grill.

Eric G.: 00:36:20

Now we've been talking about my top 10 ways a bad contractor can scam you.

Eric G.: 00:36:23

Let's go down the list.

Eric G.: 00:36:24

Here is if you're just joining us, first off, they change the budget after the contract without changes in scope and costs, especially on luxury projects.

Eric G.: 00:36:33

Two, not being licensed bonded insured.

Eric G.: 00:36:35

Number three was hiring non licensed subcontractors.

Eric G.: 00:36:39

Number four, not pulling permits when they say they're going to and not getting the final inspection.

Eric G.: 00:36:45

Watch out for that one.

Eric G.: 00:36:46

Number five was taken too much of a down payment.

Eric G.: 00:36:50

So not having the payment schedule in the contract, that's where that should all be set up.

Eric G.: 00:36:56

Number six, using the last project to pay for materials on your project, that can be a problem.

Eric G.: 00:37:03

We've seen it happen out there where they lost their butt on the last one.

Eric G.: 00:37:07

Your materials are paying that and they're just hoping to get another one and they're playing that shell game that can be troublesome for ones especially in this economy right now.

Eric G.: 00:37:15

The next one here is not following local or state laws and contract writing and not putting up the actual scope.

Eric G.: 00:37:21

Putting in the actual scope of work, making sure that it's detailed, the quality materials, what you're getting in that contract and then not having the consumer or the client approve materials like cabinetry or finished goods.

Eric G.: 00:37:34

Those are all important ones.

Eric G.: 00:37:36

Hey, and if you think of I missed something on here, these are just my top 10.

Eric G.: 00:37:40

There's a lot more in this.

Eric G.: 00:37:41

If you've had one, feel free to head over to around the House online and send me a message over there.

Eric G.: 00:37:46

Now the next one here, and this is a big one and this is where there is liens and lien releases.

Eric G.: 00:37:55

So here's what happens if contractor goes down, buys on their line of credit materials for your job, skips out on the bill.

Eric G.: 00:38:04

In many cases that lumber yard can turn around and put a lien on your house to get paid, which means you've already paid the contractor.

Eric G.: 00:38:15

So you want to make sure that you are paying that contractor in a way that can be tracked.

Eric G.: 00:38:20

Because if you've already paid, when that goes in front of a judge, you want to make sure your butt is covered.

Eric G.: 00:38:26

If they're doing a cash deal, that can get to be a problem because you can't prove that you paid your contractor, which means you might be on the hook for the materials twice.

Eric G.: 00:38:36

Now here's what happens and this is where homeowners get freaked out when this happens.

Eric G.: 00:38:40

In states there is a lien release, so you might be working on a big project and all of A sudden in the mail one day, you have three or four lien notices that, hey, I am the lumber company and this contractor is buying stuff with your address.

Eric G.: 00:38:58

And if they don't pay the bill, we have the ability to lean your project.

Eric G.: 00:39:03

Many times homeowners see that from their contractor and they freak out.

Eric G.: 00:39:09

Don't freak out.

Eric G.: 00:39:09

As long as that's your person they're doing it.

Eric G.: 00:39:12

That's a big one.

Eric G.: 00:39:13

So when you see that that's the notice, that's the lien notice.

Eric G.: 00:39:16

Then there's a lien release.

Eric G.: 00:39:18

When they get paid, they notify you that, hey, I don't have a right to lien you because I have been paid in full.

Eric G.: 00:39:25

Here's the details.

Eric G.: 00:39:27

And they will send you that lien release.

Eric G.: 00:39:30

So you want to make sure in states that do this, that if you got those lien notices, those are dialed up and taken care of before that project is closed out and you've written the final check, make sure that those are all taken care of.

Eric G.: 00:39:44

And you can get a hold of a title company or anything else to see if there's any liens or things like that out there.

Eric G.: 00:39:49

But that's something you want to make sure to get that dialed in.

Eric G.: 00:39:52

And that way you don't have any surprises when it comes to dealing with this, because that can get super expensive when you have to chase that down.

Eric G.: 00:40:01

So those liens, I get it.

Eric G.: 00:40:03

That is how the manufacturers or suppliers can, when they're doing this on credit, that is their protection.

Eric G.: 00:40:11

I just want to make sure you understand that to make sure it's taken care of.

Eric G.: 00:40:15

Now, the next one here, number 10 on the list, got a couple honorable mentions here too.

Eric G.: 00:40:21

But number 10 on the list is a big one.

Eric G.: 00:40:23

And this is something that takes a little bit of detectiveness to make sure.

Eric G.: 00:40:28

And this is why I really like it when you are working with people that you have been referred.

Eric G.: 00:40:33

Oh, yeah, my neighbor next door, they did the roof there and they did four other friends roofs.

Eric G.: 00:40:38

This contractor's been working with me for 20 years.

Eric G.: 00:40:41

Use them.

Eric G.: 00:40:42

I totally get it.

Eric G.: 00:40:43

The biggest problem that I see out there when it comes to licensed bonded insured contractors are the people that are pretending to be them.

Eric G.: 00:40:52

Here's what happens.

Eric G.: 00:40:54

A lot of times it's a former employee, but it can be somebody just out on the blue and they are rolling around with business cards that have the company name, the company license.

Eric G.: 00:41:04

You jump on the website, you go on there and go, wow, Yep, that's them.

Eric G.: 00:41:08

That's their license number.

Eric G.: 00:41:10

That's Their address, they look legit.

Eric G.: 00:41:12

But if you don't have the business owner out there, that can be a problem.

Eric G.: 00:41:17

What are the warning signs of this?

Eric G.: 00:41:19

When they show up in the company truck and it looks like a company truck and it's got the wrap on it and much less of a.

Eric G.: 00:41:24

That's a bigger scam to pull off.

Eric G.: 00:41:26

But what I see, though is that people will do that, make their business cards.

Eric G.: 00:41:31

And the scams that you start to see is they try to get a deposit out of you or something and you write a check to a different company or even worse, it's a company name that's similar.

Eric G.: 00:41:44

So great example, the business card.

Eric G.: 00:41:47

I'm going to make a name up here.

Eric G.: 00:41:49

So this is going to be super simple.

Eric G.: 00:41:50

If you have this name as your company, I'm not talking about you, I'm just talking about this.

Eric G.: 00:41:54

ABC Construction on the card, on the little magnet on the side of the truck shows up.

Eric G.: 00:41:58

Maybe not the cleanest truck, but it's what it is.

Eric G.: 00:42:00

And you go to, you have a contract.

Eric G.: 00:42:02

This is ABC Construction on it.

Eric G.: 00:42:04

They want you to write a check to ABC Contracting Solutions.

Eric G.: 00:42:08

Problem is, many times somebody can run down to that bank if they filled out some basic paperwork, open up a bank account with a similar name and you're in trouble because they're not licensed, bond and insured.

Eric G.: 00:42:20

The name that you're writing that check to needs to be the same company that's on the license, bond and insurance.

Eric G.: 00:42:28

And I have seen this so many times.

Eric G.: 00:42:32

I've seen contractors that are totally getting scammed and they have no idea.

Eric G.: 00:42:37

So if you've got somebody out there that's not the owner, that is a, quote, employee.

Eric G.: 00:42:42

Before you spend money, before you spend a ton of time, give them a call.

Eric G.: 00:42:46

Don't cough the business card.

Eric G.: 00:42:48

Jump online, take a look and do that.

Eric G.: 00:42:51

And then you're going to be good to go talk to the original business owner.

Eric G.: 00:42:55

Hey, is Mike Smith your employee?

Eric G.: 00:42:58

Yeah, he's our sales guy.

Eric G.: 00:42:59

Oh, perfect.

Eric G.: 00:43:00

So do you have my file there?

Eric G.: 00:43:02

Yeah.

Eric G.: 00:43:02

Oh, yeah, here it is right here.

Eric G.: 00:43:04

Okay.

Eric G.: 00:43:04

Now you're good as gold.

Eric G.: 00:43:06

But when in doubt, if you're doing an employee, feel free to call that business owner up.

Eric G.: 00:43:10

You can find it.

Eric G.: 00:43:11

It's always out there.

Eric G.: 00:43:13

People are marketing.

Eric G.: 00:43:14

It's what they're supposed to be doing.

Eric G.: 00:43:15

So that's the best way to track that down.

Eric G.: 00:43:18

Just close the loop to make sure that you're going to be good.

Eric G.: 00:43:21

That is key right there.

Eric G.: 00:43:23

Get you dialed in.

Eric G.: 00:43:24

You're not getting taken that way, because there's plenty of people out there that, that, that have that issue, and I want to make sure you're not one of them.

Eric G.: 00:43:32

You've got the right people coming out there.

Eric G.: 00:43:34

Now, I got a couple things out there here in my honorable mentions to be careful with.

Eric G.: 00:43:39

And these are the contractor lead services.

Eric G.: 00:43:43

What I mean by that is companies like Angie's List, some of those companies like that, lots of different lead service companies out there, hey, we'll get you five quotes or whatever else.

Eric G.: 00:43:53

Most of the time, these companies sell your information to contractors that are contracted through them.

Eric G.: 00:44:01

And now you get these people calling you.

Eric G.: 00:44:04

Now the problem is a lot of times some of these companies, and maybe not Angie's List, but some of these companies will sit there and say, okay, we'll have three people call you and you have 10.

Eric G.: 00:44:14

Guess what?

Eric G.: 00:44:15

You had 10 because they sold it to 10 people.

Eric G.: 00:44:17

Now each one of those contractors thought there's only two people looking at it, but now there's 10.

Eric G.: 00:44:22

And many times.

Eric G.: 00:44:24

And there are companies out there that are very good and very successful.

Eric G.: 00:44:29

But just like some of the companies that are working through the big box home centers, a lot of times they're the newer companies that are a little more risky for you.

Eric G.: 00:44:37

So the best thing you can do is to hire people that are referrals, friends, families.

Eric G.: 00:44:43

Head over to a buddy's house who did your bathroom model.

Eric G.: 00:44:46

That is gorgeous.

Eric G.: 00:44:47

Those are the kind of things that you want to work with.

Eric G.: 00:44:50

That's the stuff you want to pay attention to.

Eric G.: 00:44:52

That's the stuff that's going to look like money and you're going to be better protected because you've seen their work.

Eric G.: 00:44:57

Now when they get you on the referral side, referrals can be sketchy.

Eric G.: 00:45:02

Sometimes it's all their friends and neighbors, buddies, cousins.

Eric G.: 00:45:05

But if you're going to go down that list of calling all the referrals and doing it, which is pretty smart, the issue that I have is you need to make sure that when your project's done that you take a handful of phone calls and do your part in supporting that contractor to make sure you're their next referral and you're going to be good as gold.

Eric G.: 00:45:23

So that's some of the stuff that I want to make sure that you're doing.

Eric G.: 00:45:26

You're dialing in and you're protecting yourself on the next project.

Eric G.: 00:45:30

So this thing goes a lot more flawlessly and you're reducing your liability to people taking advantage.

Eric G.: 00:45:37

If you want to find out if you've got questions for me.

Eric G.: 00:45:40

Hit me up roundthehouse online.com and I can help you over there.

Eric G.: 00:45:45

All right, everybody.

Eric G.: 00:45:46

It is Christmas week this week.

Eric G.: 00:45:49

Merry Christmas.

Eric G.: 00:45:50

Happy Hanukkah to all of you people out there enjoying the holidays this week.

Eric G.: 00:45:56

This is not a best of show today because I wanted to make sure we had some good information over the holidays when you're hanging out and enjoying yourself.

Eric G.: 00:46:02

I'm Eric G.

Eric G.: 00:46:03

Thanks again for tuning in to around the House.

Eric G.: 00:46:13

Love is a love song?

Eric G.: 00:46:15

Let's be lovers?

Eric G.: 00:46:17

We're all over the radio?

Eric G.: 00:46:19

Take my hands out?

Eric G.: 00:46:21

Nowhere to go?

Eric G.: 00:46:23

All over the radio With.