How to Spot a Home-Contractor Scam

April 25, 2013 By 3 Comments

Most have integrity, but you have to rely on more than a handshake and your gut

By GEOFF WILLIAMS

April 24, 2013 RSS Feed Print

Couple standing in front of house while contractor points at something

This is the season when the lawn mowers begin roaring, the mulch is spread and homeowners, if they haven’t already, begin thinking about getting that roof fixed or finally putting up a privacy fence. But it isn’t just the sun that comes out. There are also the pests—the ticks, the mosquitoes and the con artists.

As plenty of homeowners are aware, there are ample anecdotes in the media of home-contractor scams. These often con the elderly into either giving up money for no work done, or having work done but at an exorbitant price that wasn’t agreed to. In the last few weeks alone, a 77-year-old man in the Philadelphia area paid for his roof to be repaired only to end up paying to have a useless, tar-like substance splattered across it; in Norfolk, Va., an 83-year-old woman gave a home contractor $4,300 and never saw him again; in San Diego, a con artist has been offering to fix driveways, collecting down payments as high as $2,500 and giving nothing in return.

The anecdotes go on and on. So what should you do if you want a project completed but don’t want to see your name in the local paper, where you’re quoted warning your neighbors not to fall for a scam?

Research your contractor. Everyone thinks they’re doing that, but it isn’t as straightforward as one might think to vet a home contractor.

“In many cases, we see a person posing as a licensed or reputable contractor, and all checks out until the first payment is made to begin the job, and then the subject disappears. We see fake business cards and websites being used, and criminals can assume the identity of a real contractor, register a company or use an alias. The goal is always the first payment,” says Tom Burnett, a spokesman for Wymoo International, a worldwide detective agency headquartered in Jacksonville, Fla. Burnett is also a former private eye.

Despite all the tricks a con artist can play, you can vet a contractor, says Burnett. Obviously, there’s the tried-and-true method of using a contractor that a friend or family member swears by, but if you don’t have that avenue, Burnett suggests:

• Contact the Better Business Bureau where the company or contractor operates and check for complaints.

• Ask for references and make sure you actually contact, say, two of them.

• Check to see if the company is registered with its state or your state’s division of corporations.

• You can ask for the contractor’s license number to verify with your state’s Department of Professional Regulation, or your contractor’s state license board or similar office.

• And, of course, search the Internet for whatever you can find on the company.

Be wary of paying upfront. This is tricky, too, because even honest home contractors ask for money upfront, for good reasons. “Let’s say you want your front door put in, and if the contractor makes the order, and you back out, they essentially own that front door,” says Amy Matthews, a home contractor who has hosted numerous DIY Network and HGTV series and is a spokesperson for Home Advisor, an online portal that matches, for free, homeowners with licensed home contractors (homeadvisor.com).

So it isn’t weird for a home contractor to ask for money upfront, but it shouldn’t be astronomical numbers, says Matthews. “It’s very common for home contractors to ask for a percentage, say, 30 percent at the start, 30 percent in the middle and the rest at the end, and you should never pay at the completion until you’ve really looked it over.”

She adds that every state is different, and that in California, home contractors aren’t allowed to ask for more than 10 percent of the job upfront. Meanwhile, some states have no regulations regarding home contracting projects.

It is also wise to pay a home contractor with a credit card instead of forking over a wad of cash or paying with a check. This will give you a record of the payment for the authorities and improve the odds of getting your money back if you are swindled, since credit card companies may refund your money in such situations.

If the proposal isn’t very detailed, that might be a red flag. A home contractor who plans on putting a fence around your yard or fixing your roof isn’t likely to offer up lengthy, detailed plans, but if you want to hire a contractor for a fairly elaborate project, such as a room addition, you’ll want to see some detailed blueprints.

“The less gray areas there are, the better off homeowners will be,” says Nicholas Iarocci, who owns a home contracting company, Source Development, Inc, which services the New York City area. He says detailed plans can “make the homeowner aware of possible additional expenses,” which can help you if the contractor is ethical and if the contractor isn’t. After all, some unethical contractors deliver when it comes to work, but they overcharge. Or they might not plan to destroy your finances but do because of the shoddy way they run their business.

“If an insured contractor brings a day laborer or an employee that’s not on the books, and they get injured, the property owner is directly affected,” says Iarocci. “I collect certificates of insurance from my subcontractors.”

Don’t let yourself be rushed into a project. Some perfectly honest home contractors will come to your house unsolicited, says Matthews. “They’re called storm chasers,” she says, “and there are some very credible contracting companies that look for homes that have been hit after a windstorm or heavy rain, but you still have to do that background check to make sure.”

So if the contractor can’t wait for you to think about their offer, or for you to summon your inner Hardy Boys or Nancy Drew and check them out, stay away. And you should always keep an eye out for that classic red flag waving in the warm, friendly breeze. Sadly, just as there is no free lunch, there is also rarely an extremely cheap lunch.

Says Matthews: “If someone offers to do a really quick job on your house for a really low price, and it sounds too sound to be true, it probably is.”

 

Courtesy of your Arcadia Real Estate Agent

Filed Under: Brettany Harrison, Brian Peralez, Design, Make Over Tagged With: , , , , , , , , , , ,

Improve salability of home riddled with permit issues

February 1, 2013 By Leave a Comment

REThink Real Estate

BY TARA-NICHOLLE NELSON, THURSDAY, JANUARY 31, 2013.

Inman News®

<a href="http://www.shutterstock.com/pic.mhtml?id=43156006" target="_blank">Kitchen remodel</a> image via Shutterstock.
Kitchen remodel image via Shutterstock.

Q: I’m having trouble selling my place because I added a second kitchen in what was the garage without permits. My bad, but I will have to take it out to get conventional lending. It’s a two-story house with one bedroom (with a walk-in closet), a living room and kitchen in the upstairs unit. The downstairs has a kitchen and dining area in the converted garage space, another room that can be used as a bedroom with closet space under the stairwell, and a three-quarter bath.

This is on one acre of horse property on a dirt road with a section of state land across the street. It was listed last summer and had four offers within a month, but because I didn’t have the permits for the second kitchen no lender will finance the place.

Here’s my question: Should I spend the money to install a real closet in the downstairs bedroom, or just leave it as it is? –Jan

A: It sounds like the big selling point of your place is its fundamentals, the land, the horse zoning and the location near the undeveloped/state land. But as you’ve been through this odyssey with trying to get this place sold, I can tell that you are in danger of getting off track and unfocused with respect to how you move forward. Here’s how I’d suggest you avoid that:

1. Solve for the real problem. Stay focused on solving for the real problem that stopped you from selling the place the first go-round. If you had four offers right off the bat when you listed it, I would say that adding a closet is really not going to increase your chances of selling the place this go-round. Stay strategic and devote your additional investment and preparation efforts to what really matters: rendering the place mortgage-worthy and salable by either removing the second kitchen or obtaining permits for it.

That said, if you happen to know that the downstairs kitchen was a big selling point for the buyers who made offers before and you decide to remove it before relisting the place, then I’d say you can put the closet conversation back on the table. It might, in fact, limit how some buyers might like to use that living space, but I’d first talk with your agent and get her sense for whether the earlier buyer feedback suggests that a closet would be greatly valuable in that room to the average buyer for your property. I just doubt that a closet will be a major deal maker or breaker on a property that already had such a high level of buyer interest without the closet.

2. Don’t make the same mistake twice. To carve out an exception to my earlier advice, if installing a closet gets you an additional, legal bedroom, then you should consider doing it. That would allow you to list the home as a two-bedroom vs. a one-bedroom — and that does have major, incremental buyer-attracting value. But for that to happen, you’d have to apply for permits to turn the space into a bedroom with a closet. The fact that it is under a stairwell makes me suspect that it might not qualify for bedroom status, but talk that over with your agent and a local, licensed contractor.

And be aware that if you do apply for permits to turn the open space into a bedroom, you could be opening up a can of worms by inviting inspectors into the property who may begin to require other upgrades of the property to current building code standards. Given that you’ve heavily modified the home already without permits, this could be a train you’ll wish desperately you could put back in the station — and might not be worth the risk, even if you do think you could get an extra legal bedroom out of a closet addition.

3. Don’t assume removing the kitchen is the only solution. Allow me to add one more layer of complexity to this decision tree you face. Is it possible that you can get permits for the downstairs kitchen? Talk with your agent. If she feels like the property will get just as much buyer interest and just as many offers if you just pull the kitchen out, because of the nature of the place, then I’d say you should do that.

But if the downstairs “unit” was a primary reason buyers were interested last time, talk with your agent and contractor about whether it’s possible to cost-effectively get the kitchen permitted. If so, consider going that route, but do keep in mind the reality that applying for permits on the kitchen might expose you to additional inspector demands, like upgrades to electrical and other systems. So make sure you have a trusted, legitimate contractor on board who can tell you in advance what such demands would likely be.

Tara-Nicholle Nelson is a real estate broker, attorney and the author of two critically acclaimed books on real estate. Tara also speaks and writes on the art and science of life transformation at RETHINK7.com.

Courtesy of your Arcadia Real Estate Agent

Filed Under: Make Over, Market Tagged With: , , , , , , , ,

First impressions are made at the front door

January 14, 2013 By Leave a Comment

Home’s entrance is seldom high on remodeling priorities

BY ARROL GELLNER, FRIDAY, JANUARY 11, 2013.

Inman News®

Front door of a <a href="http://www.shutterstock.com/pic.mhtml?id=75275389" target="_blank">Georgian era townhouse</a> in Salisbury, England image via Shutterstock.Front door of a Georgian era townhouse in Salisbury, England image via Shutterstock.

Have you ever been to a house where you had to skirt the gas meter or sidle around garbage cans to get to the front door? Or one where there was such a bewildering array of doors, you weren’t sure which one to knock at?

The front entrance is seldom high on people’s remodeling priorities. Yet, just like that old saw about first impressions, it’s your home’s entrance that people notice first. It’s practically impossible to rectify a bad impression made at the front door.

Tract-home builders have known this for years; even in the cheapest house, they’ll never cut corners on the front door. They know that a strong impression of quality here subtly colors a visitor’s perception of the whole house.

For much of architectural history, front entrances have been a focal point of a home’s design. In colonial New England, for example, the front door was often flanked by sidelights and topped by a pediment, setting it apart from an otherwise austere facade.

The entrance should also be clearly apparent from the street. That doesn’t mean it has to be glaringly exposed to view — just that its location should be easily deduced by an unfamiliar passerby. Architects call this principle “demarcation.”

There are lots of subtle ways to demarcate a front entrance. The most common is to surround the door with an architectural form such as a pediment or other type of trim. Another traditional strategy places the door in a recess, on a projection, or under a roofed porch. You can find a well-known example of the latter on the back of a $20 bill.

Here are some thoughts for planning your own grand entrance:

  • Don’t place an unsheltered entrance door flush with the front wall of the house; it’ll create an unwelcoming “side door” or trailer-door effect.
  • Don’t bring the path to the front door past utilities such as gas or electric meters, or past unsightly storage areas for trash or the like. Keep these kinds of features out of the visitor’s line of sight.
  • Don’t force visitors to walk on a driveway to get to your front door. Provide a separate walking path, or at least set aside a portion of the driveway paving using a different color or texture so it’s clearly meant just for those on foot.
  • If you plan to provide a covered entrance porch, make it at least 6 feet wide — enough for a person to stretch out both arms without touching either wall. Anything less will feel cramped and uncomfortable. Also, make the porch at least 4 feet deep (6 feet is better), or it’ll feel cramped when more than one person is waiting outside the front door. A cheaper alternative to building a projecting porch is simply to recess the front door. Again, make the recess at least 6 feet wide, and not less than 2 feet deep.
  • Lastly, if your house has several doors facing the street, make sure your front approach aims your visitors toward the main entrance. Your front door may seem obvious to you, but, hey, you live there.

Courtesy of your Arcadia Real Estate Agent

Filed Under: Brian Peralez, Bussiness, Design, For Sale, Make Over Tagged With: , , , ,