How many homeowners do you know who have been ripped off by a builder, carpenter, or other contractor? I bet just about all of them will say they fell victim to a contractor at one point: either not receiving any services for their money, or getting a shoddy work product.
Over the last year, I experienced contractor drama of my own. A friend referred me to a very talented carpenter. I had seen some of his work and was very impressed. Except the carpenter had some business problems. He had several court judgments outstanding and had a history of finishing projects late. But my friend assured me the carpenter had turned over a new leaf and the hard times were a thing of the past.
I met with the contractor and he was eager to draw up plans for my project. I approved the plans, and he asked for half of the total cost as a downpayment so he could purchase materials and begin the project. That was almost a year ago, and he never purchased materials and never started the project.
Where did I go wrong? Well some people will tell you to never make a downpayment on work from a contractor because it's too risky. Others say it's reasonable for the carpenter to ask for money up front to purchase materials. Who is right? I don't know, but I do know that with paperwork to document our deal, I felt I was protected.
I was wrong. I spent about four months trying to get the carpenter to do the project. At the time he told me he had done almost all the work on the wood, and all that was left were some finishing touches and the installation in my house. The truth was that he never even started!
Finally, I told him I just wanted my money back. I spent the last seven months trying to get him to refund my money. Yesterday I finally received the balance of my money back.
Here's my advice to you: Ask around and get a few referrals for reliable contractors. Only take seriously the referrals from people who have worked directly with the contractor. Inquire about whether or not the costs were reasonable, whether the work was done on time, and whether the project was completed to the satisfaction of the homeowner.
Then contact a few of the contractors and meet with each of them. First impressions mean a lot. By meeting with a few builders or carpenters, you have a chance to compare them and you may quickly see that one or more falls short.
Finally, check court records if you're able, to see if the contractor has had any disputes with customers. If you find a contractor who has a history of financial problems, liens, and judgments, don't take the risk. Even if a friend or family member says they've had a good experience with the contractor, history says otherwise. Run as fast as you can in the other direction. Don't set yourself up to be one more person screwed by the carpenter. I should know. It took me almost a year to get my money back. And I consider myself lucky... most never get their money back.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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