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BASEMENT BLOGWatch-out! Don't get ripped-off... | Posted at 21 Apr 2006
I just got off of the phone with a woman who had been ripped-off. Several months ago, her family was ready to get started on their basement. She contacted several contractors, including Upscale Downstairs. Unfortunately, they decided to go with the lowest bid. “It wasn't just about price,” she explained, “they really played into the 'trust factor.'” Claiming to be closely associated with the local religion, being a family run business, and in need of some extra work were all comments this fraudulent construction company made. They put together a nice presentation, and the price was great, so this family put 40% down, and got excited. The family never checked the contractor's references. Slowly, the job got started. Not long after, the contractor was asking for more money, this time to pay his subcontractors, who should have been paid with the first deposit. “The real red flag was when they asked for gas money to get to work,” she said. “At first I said 'no way,' but they really pulled at the heartstrings.” Then one day, the contractor showed up, removed all of his tools, and disappeared with a lot of money and less than half done.
So today she called, of course regretting having not selected a better company. Her family is in dire need of the space, and they're short on money. I agreed to do what we could to help. At the same time, we discussed the demise of another popular basement finishing company that went bankrupt, leaving many jobs unfinished and even more subcontractors unpaid. Interestingly, the most amazing part of my conversation with this woman was her great attitude. Despite her losses, she remained upbeat, even humorous. “There's nothing I can do at this point,” she said “but laugh.”
I share this story with you, not to make a hero out of our efforts, or to use scare tactics, but instead to issue a sincere warning: beware! Unlike many industries, the barriers-to-entry for a residential remodeling company are very low. All a person needs is a small knowledge of construction and a beat-up pickup truck, and he is on his/her way, with or without any experience in running a business, dealing with cash flow, or performing quality work on time.
For many people, finishing the basement will be one of the largest investments that they will ever make, second only to the purchase of a home. You can't afford to hire the wrong company. Listed below are a few suggestions on how to hire the right contractor. (You can find more information on this topic here on our website, under references, then choosing the right contractor.)
1. Call on several references, don't just ask for a list.
2. Check the status of their contractor's license and insurance. Copies aren't enough.
3. Avoid selecting a bid that is significantly less expensive than the others. A very low price will end up costing you more.
4. Visit projects completed, and underway, of the contractor in question. Examine firsthand their quality.
5. Look for membership with local agencies, such as the Homebuilder's Association or the Better Business Bureau. Typically, these organizations tend to keep companies accountable. Plus, they often offer assistance for mistreated homeowners.
6. Listen to your instincts, and ask lots of questions. Don't do it if it doesn't feel right.
Interestingly, I have a similar set of questions that I ponder when deciding whether or not to do work for a particular client. There have been times when my gut told me that a particular client would be unrealistic, or otherwise impossible to work with. Sometimes, I have ignored that instinct, and have regretted it. Fortunately, most often I listen.
As scary as all this might sound, there are many fine contractors who are honest and fair. Upscale Downstairs is just one of those. If your homework is properly done, then you shouldn't need to worry. Working with a trustworthy company can be a very rewarding experience, and although it's not stress free, you don't have to get ripped-off when finishing your basement.
Again, if you've had an experience working with a contractor, positive or negative, and you think it could be helpful to other readers, please post a comment here. We don't want any unfair mudslinging, so please avoid using names. Just provide helpful experiences and lessons learned.
Until next blog,
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