Tips for avoiding a home remodeling scam

OWENSBORO, Ky. (WFIE) – Over the last few months, several cases have been reported about people losing out on thousands of dollars after hiring a contractor for a home remodel that never follow through.

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Mark Schmidt has over 40 years of experience in contracting and remodeling in Owensboro.

He’s retired now, but wants to share his knowledge with anyone with an upcoming project.

“Whether the project is $5000, $10,000, or $75,000, it’s a large investment,” said Schmidt. “They have to do everything in their power to protect themselves.”

Schmidt says first to find your contractor from a reputable source. Word of mouth from a friend isn’t always enough.

“The best place to find a contractor is through your local homeowner’s association,” said Schmidt. “Most associations have pre-approved contractors.”

So you hire your contractor, what next?

“Make sure they have a local business license,” said Schmidt. “It’s easy to follow up on, you can call your local billing department to find out if they have a local business license.”

Then, check to make sure they have liability insurance, and worker’s comp for their employees if they get hurt.

“It protects your home in case something happens in the construction project where they damage your property,” Schmidt said.

One of the most crucial steps, Schmidt says, is making sure there’s a contract.

“Everything needs to be in writing,” he said.

He says it needs to be specific. Everything from the number of power outlets, to even the number of coats of paint.

Especially, the payment schedule.

“The total job costs this amount of money, this how much you’re going to pay down and when you’re going to pay it down,” Schmidt said.

Schmidt says despite what some people say, it’s unrealistic to not have to pay anything upfront, but for most average remodels a small down payment will do.

“You can get by with a 20 or 30 percent deposit which would cover most materials that are ordered,” he said.

So if you’re getting ready for a remodel, Schmidt says do your homework.

“There’s nobody out there that can protect them, they’ve got to do it themselves,” he said. “There’s resources out there to protect them.”

If you are a victim of getting scammed by a contractor, the best thing to do is report it to the police. It’s not guaranteed you’ll get your money back, but it helps authorities try to find it and put a stop to it.

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