It’s a fact.  There are both good and bad contractors working in the industry.  And it’s no secret to consumers that remodeling nightmares exist as we’ve either read about them or know of folks who have been through it.  Yet time and again, consumers find themselves in trouble with their projects and contractors as a result of their lack of knowledge on what they need to do to protect themselves from unscrupulous business practices.

Home improvement is one of the top industries noted for fraud and customer dissatisfaction and has consistently been ranked as such over the last decade, according to the Consumer Federation of America, The National Association of Consumer Agency Administrators and North American Consumer Protection Investigators.

While much of the blame falls on the home improvement industry, it’s also the lack of knowledge and much needed education on the part of the consumer that leaves them vulnerable to these unscrupulous contractors.

The responsibility of hiring an ethical and experienced contractor falls squarely on the homeowner. Doing the necessary research and background checks on the potential contractor is key to finding that contractor and avoiding a remodeling nightmare.

With 10 years experience of responding to desperate emails from homeowners through my site – ContractorsFromHell.com – it became quite clear as to what consumers repeatedly did to get themselves into hot water with their remodeling projects. The following are the top 5 mistakes homeowners make when they begin their search for a contractor:

1.The homeowner checks the license and a few references and makes their choice.

This is only a necessary formality and tells you nothing about the contractor and his business ethics.

2. They “trust” the contractor and sign on the dotted line.

Trust is something that is earned (did we not learn that growing up??) and not given away freely – particularly in the construction industry.

3. The Homeowner fails to do all the background research.

There is much to learn about your rights, your contractor’s rights, state and local laws, what needs to be in your contract and more, if you want to avoid a home remodeling nightmare.

4. Assumes the oral agreements made during negotiations will be honored as part of the deal.

Not a chance.  If it’s not in writing in your contract and part of your specifications sheet, you will be paying extra if you want it done. Change orders are frequently used in renovation projects and getting familiar with them is a high priority.

5.  Gives the contractor a large sum of money upfront to start the project.

This is typically the beginning of the end and not a good one. Some states have down payment limits, others don’t. Putting down a limited amount to start the project and having a tight payment schedule puts the homeowner in control of their money and not at the mercy of the contractor. At this point you’ve paid for work not yet performed and many times homeowners see little or no work done from this point on.  Sadly, a common scenario I hear about from consumers.  Consulting with a construction law attorney on setting up the contract and payment schedule is a wise investment to ensure you don’t loose your money and end up in a remodeling nightmare.