Homeowners should be wary of a contractor's 'lowball' bid

 
 
Posted4/14/2017 6:00 AM
hello

By David Myers

Q. We purchased our first home two years ago. Now we are expecting our first child, so we want to add another bedroom and bathroom. One contractor says he can do the work for about half of all the other bids we received, provided that we pay him upfront for the entire job, in cash. He has given us a written contract and even has said that he will have it notarized. Is this deal legitimate?

A. I'd be wary of such a lowball bid, even if the contractor agreed to have his tongue notarized.

Bids from professional remodeling firms rarely vary by more than 10 or 20 percent, assuming that the firm would use the same materials and get the proper building permits. An ultralow bid often is a warning sign that the contractor might not be legit, according to consumer watchdogs at the Federal Trade Commission.

Furthermore, it's illegal in most areas for a contractor to demand payment in full before work begins or to insist that the bill be paid in cash. The FTC states that such demands often are additional signs that a contractor isn't, er, "on the level."

If the contractor later took all your money and then skipped town without doing the work, his notarized contract wouldn't be worth the paper it was written on.

The FTC states that homeowners also should be wary of contractors who solicit door-to-door, offer discounts for helping to find additional customers, use high-pressure sales tactics or say they can offer a deep discount because they have material left over from another job.

Never hire a contractor for a major remodel without first verifying with state officials his license and workers' compensation insurance. It's also a good idea to personally inspect the work the contractor has done for other homeowners in the community.

Of course, you also should insist that the contractor put all of his promises in writing. There's no need to have the document notarized, but you might want to have it reviewed by an attorney if the remodeling job would cost more than a few thousand dollars.

Several other tips to help choose a good contractor can be found on the FTC's outstanding website, www.ftc.gov.

Real estate trivia: A surgeon friend of mine swears that contractors make the best patients. That's because they understand why a job takes longer than expected and the price is always higher, and they never complain when parts are left over.

Q. Is it true that some guy's home was destroyed by a burning mouse?

A. Yes, it's true. After roughly 25 years of writing this column, it's still one of the most bizarre real estate tales that has ever been told:

It was a balmy day in Fort Sumner, New Mexico, when homeowner Luciano Mares decided to burn some weeds in his backyard. Though the details of the subsequent events are a bit murky, Mares apparently retrieved a mouse he had caught with a glue trap inside his home and tossed the little critter -- which was still trying to wiggle out of the trap -- into the fire outside.

Heat from the blaze melted the glue, and the freed-but-burning rodent made a beeline back to the house. It shot through a window and, according to both Mares and the local fire chief, the entire home was ablaze about 90 seconds later.

No one was hurt, but the house and everything in it was destroyed.

Skeptics initially thought the story surely was a hoax, in part because Mares changed some details in the days immediately after the blaze before reverting to his original version of events. Others speculated that the whole thing must have been part of a fire-insurance scam, but that theory was debunked after investigators discovered that Mares didn't have a hazard policy.

Q. We accepted an offer for our home two weeks ago, and the contract is now in the closing process. Now we have asked our real estate agent to take our "for sale" sign down, because it's ugly and people are still knocking on our door and asking to take a tour. The agent says we should leave the sign up. What do you think?

A. You probably should leave the sign up for at least another week or two. A proposed sale can fall apart for any number of reasons, from hidden credit problems that a buyer didn't know about to a home inspection that turns up unexpected problems.

Keeping the sign up for a bit longer could help you secure a second or third "backup" offer, which would come in handy if your current buyer can't get a mortgage or gets cold feet.

It's rude for potential buyers to simply pound on a seller's door instead of calling first to make an appointment. If it's a serious problem, ask your agent to put a small "sale pending" or "do not disturb occupants" sign atop the larger sign.

The smaller sign likely will discourage pesky lookie-loos from bothering you, but won't scare off serious buyers.

• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405. Net proceeds will be sent to the American Red Cross.

© 2017, Cowles Syndicate Inc.

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