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12 Ways Homeowners Can Avoid Home Improvement Rip-Offs

By U.S. News & World Report

We’ve all heard the horror stories: contractors who took thousands of dollars and then disappeared, home renovations that dragged on for months or work so shoddy it had to be completely redone.

These nightmare scenarios may frighten you, but if you do your homework, you can prevent yourself from being ripped off by a bad home improvement contractor.

“It’s beyond just finding the name of the person you want to use,” says Angie Hicks, founder of Angie’s List, which provides reviews of contractors and other service providers. “These are big investments and can be highly emotional because it is your home.”

Many homeowners spend weeks and months planning their projects and then expect to hire a contractor in a few days. But if you want a good contractor, expect to spend anywhere from a few days to a few weeks investigating prospects and hammering out contract details.

“You should definitely research the company you’re getting ready to do business with,” says H. Dale Contant, president-elect of the National Association of the Remodeling Industry and president of Atlanta Design & Build. “Make sure that the company is reputable. Double-check and double-check again.”

Spending time on contract details at the beginning of the process can save you headaches later. The contact should be extremely detailed, if possible listing products by name and serial number. It should include a timetable for completion of the project and a schedule of progress payments, as well as how you and the contractor will handle changes. Don’t be afraid to negotiate changes to the initial contract you receive from the remodeling firm.

“Don’t forget your gut instinct,” Hicks says. “If it feels like someone you’re talking to is not communicating well, that’s a big sign.” She warns that you should pay especially close attention when you first initiate contact with the contractor. “Watch the little things at the beginning because they might be indicative of bigger things later.”

Expect the unexpected, and budget for it. Once work on your home begins, there will be expensive surprises: bad wiring or plumbing behind walls, rotted subfloors, termites and other problems that you won’t know need work until you open up the walls. You may also change your mind along the way about how you want things done.

Here are 12 ways to avoid home improvement rip-offs:

Beware of people who knock on your door. Good contractors rarely have to solicit business, and those who want more customers try advertising, not door-to-door solicitation. People who knock on your door are often thieves or scammers who will take your money and do a shoddy job, then disappear. Or they may even rob your house.

Avoid contractors who seek a big payment upfront. A reputable contractor will ask for 10 to 25 percent of the contract price before the job starts, then ask for progress payments as the job is completed, with the schedule detailed in the contract. The only time a big upfront payment may be legitimate is if you need a large quantity of custom materials to start.

Check licenses, references and insurance. Ask for references, proof of insurance and license documents, both contractor and business licenses. Then call to verify that everything is still current and valid. You may want to be named as an additional insured on the contractor’s policy while he is working at your home. If you’re interested, ask the contractor to add you to the policy and then bring you back the paperwork with you listed.

Check courthouse records for litigation. In most municipalities, the basic information is online, though you may have to pay a few dollars to read it in some municipalities. If the contractor has been sued, read the lawsuit and, if possible, contact the complaining homeowner for details.

Check for complaints against the contractor. This step should include checking in with the Better Business Bureau, local building departments and state licensing agencies. Remember to search for both the individual’s name and the company name.

Read online reviews. Reviews are not be-all and end-all, since anyone can get friends or relatives to write positive online reviews. Cannon Christian, president of Renovation Realty in San Diego, says he finds the negative reviews particularly useful because he learns a lot from how businesses respond to those reviews.

Avoid contractors who suggest working without permits. While permits cost money and add time to the project, working with them also brings a second set of eyes to inspect the work. If you get caught working without permits, you could be subject to fines. In addition, unpermitted renovations can cause problems when you sell your home and may jeopardize your insurance coverage. “Your home is your single largest investment, and it’s an issue of safety,” Contant says. Don’t work with a contractor who suggests you, rather than he, get the permits.

Talk to current customers. Past customers who love their new kitchens may have forgotten that the contractor showed up late every day. Ask for phone numbers of current customers and visit a job in progress to talk to the homeowners.

Beware of high-pressure sales tactics and “buy it today” pitches. The cost of labor and materials is not going to change by next week. “Don’t be lured by some great deal,” Hicks says. “A deal today should be a deal tomorrow.”

Draw up a very specific contract. Make sure it includes the exact materials, down to brand name and item number, as well as the schedule of progress payments and the timeline for the job. “The detail in the contract matters a lot,” Hicks says.

Get lien releases from subcontractors. If the contractor doesn’t pay his subcontractors, those companies could come after you and put a lien on your house. As each subcontractor finishes the work at your home, get a lien release. You can make receiving those part of the progress payment schedule.

Withhold at least 10 percent of the total payment. You shouldn’t hand over the entire amount due to the contractor until all inspections are completed, lien releases are in hand and you are completely satisfied with the work. Once you make the final payment, it’s hard to get the contractor to return to fix those last few items on the punch list.

More from U.S. News

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12 Ways Homeowners Can Avoid Home Improvement Rip-Offs originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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