By: Jody Costello

Remodeling is slated to rise over the next 3-5 years after suffering losses due to the

Contractor installing hardwood floor

Photo by Olgar Fallas

recent recession.  Homeowners are being told to expect some great deals as contractors are hungry for work and are willing to cut profits in order to get the job.  Now this may seem like a boon for homeowners who are eager to take advantage of a great deal believing that the economy is on their side. But what most consumers don’t suspect is that that tantalizing low bid is really a bait and switch scheme that unscrupulous contractors use to get the job and then proceed to tack on “extra charges” or “extra work” and call it “unforeseen work”.

Unforeseen work is a legitimate reason for what may have not been known to the contractor or homeowner until, for example, he opened up the walls to discover a problem, but that’s an entirely different situation.

What I’m talking about here is a very common tactic unethical contractors use to get the job knowing that the homeowner is rather clueless as to what they are actually getting for that low bid and is referred to as “low ball bidding”.  These contractors are betting that the homeowner is focusing on the costs and less on the details of what work is being proposed, materials that are going to be used  and banking on the probability that once on the job, it will be difficult for the homeowner to legitimately fire the contractor.

So before you accept a proposal or sign a home improvement contract, you need to either take the time or get professional advice to determine if there are enough details and specifications in writing to avoid any ambiguity. For example, let’s say that you are remodeling your kitchen and the contract simply states: “replace existing cabinets.”  There is obviously quite a bit of latitude and room for interpretation with such a generalized statement. Are we talking custom built, cherry wood cabinets or off the shelf, home improvement center cabinets?

A detailed, thoroughly written specifications agreement is critical to the contract and could be what separates a legitimate contractor’s proposal from an unethical contractor who intentionally leaves these details out so he has an opportunity to charge extra for them later. So be wary of deals that seem to be too good.  It’s imperative for homeowners to do their research, analyzing home improvement contracts to avoid getting burned  by these unethical practices. Consider hiring a third party or consulting with a construction law attorney if you’re not comfortable reading the contract.

Homeowners also fall into the trap of believing the “verbal agreements” made by the contractor during discussions prior to signing the contract – which never made it into the written agreement- will be honored by the contractor. When they question the contractor as the job progresses, he’ll likely claim “he doesn’t recall” that and point out that it’s not part of the written agreement and of course, he can do it but it will be extra work which results in “change order” that requires more money to be paid out by the homeowner.  It can become a vicious cycle that potentially can double the cost of the original agreement and lead to nothing but frustration, a strained relationship and even litigation.

Another red flag on a low bid is that the contractor lacks proper insurance or licensing.  Every state is different in what is required of contractors so it’s critical for the consumer to understand what their states’ contractors laws mandate. Having a Surety Bond is required by most states where licensing is required, but having General Liability Insurance and additional Builders Risk Insurance offers additional protection for the consumer and should always be favorably considered.

In the end, it’s the homeowners responsibility to become educated and informed about their States contractors’ laws and what they need to know to protect themselves from a home remodeling disaster and get  informed on how to choose a contractor wisely, how to write a written agreement that serves them and not just the contractor.

About the Author: Jody Costello, Founder of is a Pre-Renovation Coach who helps homeowners avoid remodeling disasters by choosing their contractors wisely and understanding the complexities of renovating a home and working with contractors.  She offers her Home Pre-modeling Bootcamp for Women (and The Men Who Love Them!) an online course through her website