The Biggest Red Flags When Working with a Contractor

When updating your home the choice of contractor will be one of the first, and most important, decisions you make. A good contractor will have a smooth and well-organized project. A poor contractor, that’s a different story.

During our 25 years in the remodeling industry, RWS has seen it all. This article will focus mainly on a few warning signs you should look out for when considering which contractor to work with. We have all seen stories on the news about a contractor taking money and skipping town or unintentionally damaging someone’s home. This article is meant to help you avoid some of the nightmare scenarios you may have heard about. Let’s dig in!

The Contractor Asks for Cash or Upfront Payment

It is common for a contractor to require a down payment before starting a project. Be careful, however, if they ask for you to make the entire payment upfront, or to pay them in cash. Unless it’s a very small project, you should consider it a red flag if the contractor asks for more than 50% upfront. At RWS we typically collect a small payment at the time the contract is signed, and a 25-35% payment at the start of construction. 

You should have a clear understanding of how payment terms will work. A reputable company will provide a well-defined payment schedule based on the completion of certain stages of work. Payment schedules are usually tailored to the specific project, but you should not expect to pay half at the start and half at the end of a large remodel. 

Additionally, any agreement made with a contractor should be in writing. You should always ask them to send a bill or contract on their letterhead. A verbal agreement is not enough to protect a homeowner if there are problems down the road. 

Does Not Have Proper Documentation

A contractor without the proper licensing documentation for their business should raise major alarm bells. Your remodeler should always have a contractor license, state and local business licenses, and proper insurance documentation. While having a contractor’s license does not guarantee that they are knowledgeable, or in good standing, it’s a good first step.

Be aware, a contractor’s license does not allow them to do all types of work. In Johnson County a “Class A” license allows the company to construct, remodel, repair, and demolish any structure. It does not allow them to perform HVAC, plumbing, electrical, or fire protection service. These specialty trades require separate testing in addition to multi-year apprentice programs.

Insurance is a must-have for anyone who works in your home. Every contractor tries their best to avoid accidents, but unforeseen things can occur. Things can get dicey if a water line breaks or there is a structural issue. Most cities and counties require proof of insurance before obtaining a license. At RWS, we commonly purchase project-specific supplemental builder’s risk insurance for large, complex remodels on high-dollar homes. You could end up on the hook if the contractor does not have insurance. 

A permit is another crucial piece of documentation. At RWS we have always been of the opinion that permits protect both you and us. Not only will your city’s planning department review your plans to ensure things are designed properly, they will also inspect the contractor’s work at various stages of the process to verify things have been done properly. A permit is based on the cost of the project and is usually relatively inexpensive. Visit your city’s website to learn more about the permitting process.

The Quote is too Low

It may not always occur to a homeowner, but if a contractor presents you with a quote that seems too good to be true or does not sound quite right, you should be cautious. If you plan to spend $60k and the contractor says they can do the project for $30k you should dig deeper. Some of our most loyal clients are homeowners who decided to go with a “too good to be true” quote over ours, only to come back to RWS after things went south.

For most projects, there is a threshold based on the scope and quality desired. It is difficult to define what that number is. We have laid out some numbers based on home value that outline how much you should spend.  

Can’t Find Them Online/They Have Changed Their Name

Most companies in 2023 have a website, a social media page or some type of online presence. If you are looking for a contractor, there should be some way to find them on the internet. If you cannot find them, they may be trying to avoid bad reviews.  Be aware, there are exceptions to this rule. There are a few ultra-high-end contractors in the Kansas City who work only by architect referral and have chosen not to have a website. They are exceptional remodelers who do incredible work, but as a general rule, the lack of a web presence is often a red flag.

Bad Communication

The relationship between a contractor and a homeowner should be positive. The contractor should be able to return calls and emails in a timely fashion. They should also listen to you about your selections and desires for the project. 

This is not to say that a contractor should be on call  24/7. However, there should be a clear line of communication between you and the contractor. You should be able to get in touch with the project manager on your remodel to answer any questions, comments or concerns. They should respond in a professional and timely manner.  

Contractors should listen carefully to your wants and needs for your project. They may suggest certain things or influence your decision-making. They are professionals and can guide you to the right choice. But remember, at the end of the day, it’s your home. 

This also goes back to the previous section on making your arrangements in writing. If the contractor is not paying attention, outlining all selections and agreements in writing will be helpful. 

Finally, the contractor should be transparent about any issues that happen during your project. Unexpected surprises behind the drywall tend to be the norm, not the exception the older your house is. Clear communication with the contractor is key.

Trust Your Gut

Finally, If you are choosing a contractor, it is smart to trust your gut. If something feels off, then consider working with someone else. At the end of the day, the only person who can know what you want is you. 

Again, this article is just a guide and should not be taken as gospel. At RWS we pride ourselves on being open and transparent with all our customers. If you would like to learn more about our business please visit our learning center. 

If you want to work with us on a remodeling project, please fill out the contact sheet on our website. We look forward to hearing from you!