EACH YEAR hundreds of thousands of consumers complain to their state attorneys general about home-repair rip-offs. The National Association of Consumer Agency Administrators, in fact, says home repairs are second only to car repairs on the nation’s pet-peeve list. To get the inside story on how tradesmen take advantage of their customers, SmartMoney interviewed dozens of general contractors, home inspectors and tradesmen themselves. We culled the results and assembled this section, which tells you what to watch out for when signing up for a repair.

Plumbers
You’ve heard the one about the plumber who thought twice about becoming a doctor because he’d have to take a pay cut. To aggravated homeowners, that’s no joke. The most frequently used parts in a plumber’s bag cost anywhere from a few cents (washers and O-rings) to a few dollars (faucet stems). It’s the house calls that empty your wallet. Plumbers usually charge a $50 to $75 “mobilization charge” per visit, which covers only the first hour of labor. You pay this fee even for a leaky toilet, often a 10-minute job.

Since most plumbers also fix disposals and do pool and sprinkler work, try to have them resolve several problems in a single trip. Unfortunately, plumbing jobs are tough to estimate. The way around that problem: Detail your problem over the phone, then ask how it will be fixed, how much it will cost and when work will start and finish. If you live in an affluent neighborhood, don’t give your phone number or address until you’ve been quoted a price. “In the years when I was a contractor, there were some neighborhoods where you immediately marked up the standard price by 50%,” says Bob Santucci, co-author of A Consumer’s Guide to Home Improvement, Renovation and Repair (Wiley, 1995).

For the same reason, seek “border bids” — quotes from tradesmen in not-so-affluent towns nearby. The going rate for plumbers in upscale Chappaqua, N.Y., is around $65 per hour, while in Yorktown, a working-class suburb nearby, it’s $50.

Two to four calls should provide a ballpark price for a repair job under $200. More expensive work requires an on-site estimate. Since 80% of your plumbing is hidden behind walls, chances are your plumber knows as little about what’s back there as you do. This is especially true of older homes. “I constantly start what I think will be a simple repair and I end up chasing it,” says Massachusetts handyman Mark Genovese. If a highly-recommended plumber has no hunch about a job’s cost, negotiate a flat rate for him to go in and find out.

When dealing with tradesmen who charge by the hour, check if travel time is on the clock. Alan Fields, co-author of Your New House (Windsor Peak Press, 1995), forgot to ask this question when he hired a plumber to replace a leaky faucet. The plumber charged him for a half-hour trip each way and ran the meter when he drove to the supply store for a missing part. “It was a $100 mistake,” Fields gripes.

Plumbers, like electricians, are more heavily regulated than other tradesmen and more accountable for shoddy work. But some routinely cut corners to boost their own margins. They use 1/2-inch pipe instead of 3/4-inch pipe — which means that in bathrooms where there’s a shower, your toilet may not flush on the first try. They use L or K grade copper piping, which wears in five to 10 years, instead of M, which lasts 15 to 20. Some plumbers use plastic pipe, which is less expensive but noisier and less durable than metal. Ask your plumber what he’s using before he starts work.

If you suspect that your plumber is overcharging for materials — passing along a $50 toilet for $400 — try comparing prices at your local Home Depot or plumbing-supply house. The latter may not sell directly to consumers, but you can still read the price tags.

Painters
The biggest painting rip-offs aren’t in the final coats, but in the prep work. On a three-story house, most people don’t bother climbing up a ladder to make sure every inch has been properly scraped, sanded, patched and primed. But a spot-check makes sense, since poor preparation can lead to water damage and rot. To verify that priming has been done, ask your painter to use a different color, such as light-gray primer on a white paint job.

How much will you have to pay? A detailed on-site estimate helps avoid unpleasant surprises for both parties. The old saw says get three estimates and take the middle. Forget it. As long as the tradesmen are bidding on the same job — strip the wallpaper, plaster the walls, apply one coat of primer and two coats of Benjamin Moore Regal Satin in Linen White — you can get as few as two estimates, provided they’re in the same ballpark.

Don’t scrimp on quality paint, even if you can afford only a single coat. You get the most wear for the money buying one step down from the top of the line. Also keep in mind that painters often do better on paint prices than do consumers. One painter in Katonah, N.Y., buys paint at $22 a gallon, then charges clients $25. At retail, it would cost $28. Make sure to ask your painter how his paint pricing works.

When evaluating exterior painters, ask for addresses of homes they painted five years ago — and then go look. A good paint job should last about seven years. At five years, you should see just the beginning of wear around the eaves and gutters.

One final thing to keep in mind: No matter how much you nag potential contractors to lower their prices, they will need to make money on your job. There is such a thing as pushing them too hard. Explains one painter who figures in a 20% to 25% profit margin: “With insurance and expenses, each man costs me $150 a day. If I can’t make a profit on that, I can always get cheaper men.” And cheaper men means shoddier work.

Electricians
Because electricians have the most explicit national standards, they register the fewest complaints from consumers. Before hiring an electrician, though, make sure he’s a member of the National Electrical Contractors Association or a local electricians’ union. You should also check — as with all tradesmen — that he’s insured and uniformed (he should be), driving a truck or van with a painted-on logo (magnetic signs indicate fly-by-night operations) and willing to write you an estimate on his own printed invoice (which should reveal a street address rather than just a post office box).

Electricians’ estimates vary widely, as with all repairs involving more labor than materials. A heating contractor can only price a furnace as low as he can buy it wholesale. But an electrician or a plumber can bill whatever he likes. Just ask the transient plumbers from Maine and Vermont now working in Fairfield County, Conn. They’re charging $14 an hour, nearly double their normal rates, but a far cry from the $55 to $60 local residents generally pay for a house call. (If you’re looking for itinerant tradesmen, check the local Pennysaver and grocery store bulletin boards. You might even drive by new housing developments, since builders usually get their hooks into any cheap available talent.)

Though it’s rarer, electricians can rip you off on parts, too. A cheap electrical switch costs your electrician 29 cents, compared to $2 for a longer-lasting one. When buying such devices from your electrician, make sure he’s providing “specification grade or better” products, a standard set by the National Electrical Manufacturers Association. Cheaper grades like “utility” and the unfortunately named “residential” won’t last in a high-use area like your kitchen, where you’re plugging and unplugging the can opener several times a day.

Your best weapon against shoddy electrical work is a $10 voltage tester purchased at a hardware store. This basic diagnostic tool will tell you if outlets are wired incorrectly, one of the biggest problems with electrical work.

Roofers
State attorneys general have files stuffed with stories of roofers who have skipped town with a client’s shingles — and his check. Some roofers don’t even bother using shingles, claiming that a coat of latex paint prevents leaks just as effectively.

If you’ve got a leaky roof, the likely cause is flashing, which is the material — usually copper, galvanized steel or aluminum — that joins your roof to the chimney and vents. Flashing can be fixed cheaply with a black gooey substance called asphalt cement (which lasts around three years) or with new flashing (which lasts more than a decade). Plan on paying $30 to $50 an hour to have flashing fixed correctly.

Beware the roofer who gazes up at your house and announces, “Your roof is 15 years old. It will leak soon unless you replace the shingles.” The only way to determine if you need a new roof is by walking around on it. Worn-out shingles, which have lost their oil and thus their water repellency, look brittle, curl up at the edges and often crumble into powder when broken.

A new asphalt shingle roof (with one layer of shingles) costs $30 to $50 per “square” (a roofer’s square is 100 square feet), depending on the quality of the shingles and the slope of your roof, and lasts 15 to 20 years. A second layer will last about 10 years. If you plan to move within that time, adding a second coat without stripping the first will save you around 20% in labor (as well as $500 to $700 for a dumpster to haul away the old shingles).

HVAC Specialists
According to a recent survey by Checkbook Inc., a Washington, D.C., consumer group, the biggest heating and air conditioning rip-offs include substituting used parts for new ones and replacing parts that don’t need fixing. Always ask to see the decrepit or broken parts before they’re replaced, and to see the packaging and documentation for new parts before they’re installed. And make sure your heating, ventilation and cooling contractor doesn’t fix what isn’t broken. If your forced-air furnace breaks down, your technician may suggest installing a $100 automatic gas valve when all that’s needed is a $4 thermo coupler (which detects heat coming from the pilot light). If you’re suspicious, ask to have the thermo coupler replaced first, then see if your furnace works. It’ll take less than 10 minutes.

If possible, have heating and air conditioning repairs done in the off-season. Checkbook estimates that air conditioning work is up to 10% cheaper in November than in July. Also, stay away from extended payment plans, if you can help it, says Alex Walter, who runs his own HVAC firm in Aurora, Colo. “When people are offered these ‘free’ extended payment plans for a year, they really are paying for it, somewhere in the order of $100,” says Walter.

Since heating and air conditioning systems require regularly scheduled maintenance, many consumers buy service contracts. Make sure your service provider has the most up-to-date equipment, like a refrigerant-recovery machine and a refrigerant leak-detection device.

When replacing an air conditioner or furnace, quickly eliminate bids from any contractor who estimates the job off-the-cuff — without measuring your windows, asking what type of insulation you have and looking at the direction your home faces — and plugging this information into a form (or computer program) called Manual J. This calculates the heat loss and gain of your house and ensures that you won’t buy too powerful or weak a system.

Should You Hire a Contractor?
Our experts were mixed on the merits of contracts. While a written agreement may help keep a tradesman to his word, a piece of paper doesn’t necessarily protect you from getting ripped off. If you’re duped by a licensed contractor, you can complain directly to the local or state licensing board and request an arbitration or hearing. If found liable, the contractor can be ordered to make good, or his license can be revoked. If you’re dealing with an unlicensed tradesman, contact your regional Better Business Bureau for low-cost arbitration. If all else fails you can sue, although unless the contract is substantial — our experts suggest $7,500 or more — you’ll probably want to represent yourself in small-claims court rather than hire a lawyer.

Whether or not you get a contract, make sure that upon completion of the work you get a written statement that the tab has been paid in full and that the tradesman won’t put a lien on your house. Occasionally repairmen will go home, decide they deserve more money, and then send another bill. If you don’t pay it, they can spend $25 to file a lien, which makes it impossible for you to sell or refinance your property.

• Tweet
• Facebook
• LinkedIn
• Tumblr
• Stumble
• Digg
• Delicious

When someone comes to your house and starts smashing down walls, tearing out appliances and crunching holes in ceilings, it’s best to know exactly who you are dealing with.

As a smart homeowner, you’ve already used Bankrate (www.bankrate.com) to lock in a low interest rate on a home equity loan and to find out which remodeling projects pay you back the most.

Now is no time to get nailed by a shoddy contractor
According to the U.S. Census Bureau, Americans spend more than $120 billion each year on home improvements, and little wonder. A 1997 American Housing Survey pinpointed the average age of the 64 million owner-occupied houses in the United States at 29 years, well ripe for any number of improvements.

So who is improving America’s homes? The National Association of the Remodeling Industry says professional contractors perform 78 percent of all remodels, with do-it-yourselfers hammering away at 18 percent and buy-it-yourselfers participating in 4 percent of the projects.

Lots of work means lots of contractors. And lots of ways to get scammed.

Slam the scam
Each year, home remodeling contractor problems rank among the top 10 consumer complaints to the Better Business Bureau. In fact, the BBB has received more than 7,000 complaints annually during the past decade. Americans lose an estimated $35 million each year to everything from shoddy workmanship to outright scams.

Holly Cherico, vice president of communications for the BBB, says there are three main reasons for the flood of complaints:

1. Homeowners don’t get all the details written into the contract before signing it.

2. Homeowners select a contractor based on price alone without investigating their background.

3. Homeowners get duped by outright scams.

These fly-by-night artists fall into three broad categories. There’s the con man, an outright criminal who promises anything at any price, demands his money up front and vanishes. Then there’s the lowball artist, a shady operator who intentionally bids below his legitimate competitors, then makes costly changes or skimps on workmanship to recoup a profit. Last, there’s the slipshod businessman whose intentions may be honorable but whose incompetent estimates and overall poor judgment end up costing you money.

“These are the door-to-door home contractors who claim to be doing a job at your neighbor’s house, they have leftover materials and would be happy to patch your leaky basement, repave your driveway or check your furnace,” says Cherico.

Protecting yourself against the con artist should be easy, she says. “Contact your local BBB and ask for a list of members in that industry. That’s just being a wise consumer,” Cherico says. “If you’re spending several thousand dollars, I think you want to make sure you’re giving it to a reputable company.”

Contracting 101
OK, you’ve successfully avoided the outright scam artists. But you’re not out of the woods yet. There are plenty of other ways your remodeling budget can head south — the first and perhaps most important being the failure to calculate an accurate budget in the first place.

To get a ballpark idea of what your project will cost, check out the national averages as compiled by Remodeling magazine. Adjust the ballpark cost slightly upward if you live in the East or West, slightly downward if you live in the Midwest or South. As a rule, you should adjust your total upward again if you live in a major metropolitan area.

A number of other Internet sites can also help you arrive at a more accurate budget for your remodeling project. One of the best is ImproveNet, which helps calculate the cost of labor and materials based on the size of your job.

Next, you need to determine which types of home professionals you’ll need to accomplish your remodel. For minor work, an experienced general contractor likely will be the most cost-effective. A specialized contractor, however, may save money over a general contractor by knowing the timesaving tricks of their particular specialty.

If major work is involved, especially if there are design, aesthetic or structure issues, an architect may be needed to draw up detailed plans and obtain permits. To save on costly architectural fees, consider instead a certified or licensed designer, who generally specializes in particular types of projects (kitchens, interiors, baths, etc.). Or consider a through from start to finish.

A ‘good sense’ list
To save headaches later, consider drawing up a short list of qualified professionals in your area by logging on to the National Association of the Remodeling Industry, the National Association of Home Builders RemodelorsTM Council or the Better Business Bureau. To help your search go smoothly, check out NARI’s detailed advice on “Selecting a Pro”.

It’s also good sense to make sure the contractor you choose has:

* Verifiable business licenses, certification and professional affiliations.

* Previous work experience, including a verifiable list of local customer references.

* Financial security — check banking and supplier references.

* Adequate insurance to protect you and your property against loss or suit.

* Good communication skills.

That last item should not be taken lightly. When you get down to writing the contract, clear communication on both sides is your single best insurance against a remodeling nightmare.

No-nonsense contract talk
Once you’ve solicited bids from several licensed professionals, studied them carefully and selected your contractor, it’s time to commit the project to paper. In general, remodeling contracts come in three flavors:

1. Cost Plus: You and your contractor arrive at an estimated cost and you agree to pay all actual costs plus the contractor’s fee. It’s a common type of bid, but you assume the risk of cost overruns and corrections.

2. Turnkey: The contractor commits to a fixed price for cost overruns. Change requests are documented, signed by both parties and typically paid for prior to the change being made.

3. Combination: If you choose to do part of the work yourself, you may combine elements of the cost plus and turnkey approach. The key is making each party’s responsibilities absolutely clear.

Your contract should include:

* Detailed descriptions covering all aspects of the work to be done.

* Remodeling plans signed by both parties.

* Payment plan (never pay more than 30 percent down).

* Start/finish dates.

* Change orders are to be approved by you before work is done.

* Final inspection and sign-off prior to final payment.

In addition, include these provisions:

* Cancellation rights: When you sign a remodeling contract, you have three business days to change your mind and cancel it. Contractors are required to tell you about this right and provide you with any cancellation forms.

* Lien protection: On large projects involving subcontractors, protect yourself from liens against your home in the event your primary contractor fails to pay the subs. This can be done by a release-of-lien addendum or by placing your payments in escrow until the work is finished.

* Permitting: It is the contractor’s responsibility to obtain building permits, if required, and to perform the work in accordance with all building codes.

* Warranty clause: Make sure all warranties on products and materials installed by your contractor are in writing and verified.

Control the quality
You’ve heard the old phrase “built to spec,” right?

Well, specifications, or specs, are written instructions detailing how the work on your project is to be completed, including installation processes, materials and actual products to be used. Without specs, a contractor is free to complete the work to their satisfaction, not yours.

If your project is a major one and your budget allows, have your architect include specs with your blueprint and hire a knowledgeable professional as your independent inspector to make sure the work is performed “to spec.”

Bottom line: The best-laid plans of home remodeling have a way of going awry without your watchful eye to oversee the process from start to finish. If you want it done right, hire a reliable professional, get everything in the contract, then watch over it like a hawk to make sure your contractor is performing quality work.

Then, of course, sit back and enjoy what you have caused to be done so well.

• Tweet
• Facebook
• LinkedIn
• Tumblr
• Stumble
• Digg
• Delicious