10 Common Home Renovation Scams You Are Likely to Fall for
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Home renovations can dramatically change the look and feel of your living space, and many homeowners embark on projects to enhance or refresh their houses. With the excitement of the renovating possibilities available, it is easy to become less vigilant about potential pitfalls that lead to scams.
Scammers often use clever tactics to lure unsuspecting homeowners into traps. Being aware of common scams is the first step in protecting yourself. This guide highlights ten frequent renovation scams and tips to help you avoid costly mistakes during your home improvement journey.
Deposit Scam

One of the most common home renovation scams is the deposit scam. Homeowners are often required to pay a portion of the total cost upfront, in cash, before work begins. Scammers will use this opportunity to take your money without ever doing any renovations or using subpar materials, leaving you with shoddy results.
To avoid this scam, ask for references and research the company’s reputation before handing over any money. It is also advisable to only pay a small deposit, as a legitimate contractor will not need much money upfront.
Lowball Estimate Scam
A lowball estimate is when a contractor offers a meager price for the project, which will likely double or triple once work begins. This scam typically targets homeowners who have already received estimates from other contractors and are looking for a more affordable option. Ensure you get multiple quotes and compare them thoroughly. Be wary of any significant differences in pricing, as it could be a red flag.
Insurance Scam
After a home has been affected by a natural disaster, some scammers visit homeowners and offer to repair any damages. They will also try to convince homeowners that they will handle the insurance claim and deal with the insurance company directly. However, these scammers often disappear after receiving payment, leaving homeowners with unfinished repairs and no insurance claim. Always verify a contractor’s credentials and avoid signing over any insurance payouts.
Fake Company Scam
Scammers often create fake renovation companies, using names and logos similar to legitimate businesses. They may even set up a website and social media pages to make it seem like a real company. Once they receive payment, they disappear without completing any work. Always research the contractor’s credentials and verify their license before hiring them.
Handshake Deal Scam
Verbal agreements and handshakes may seem like enough, but a written contract is essential when it comes to home renovations. Some scammers will make promises but fail to deliver or do subpar work once payment has been received. Others may increase the price once the project is underway, leaving homeowners without written proof of the original agreement.
Door-to-Door Contractors Scam
Beware of contractors who show up at your doorstep claiming to have leftover materials from a previous job and offer to do renovations for a discounted price. This tactic is common and is used by scammers, especially after natural disasters or severe weather events. Never hire a contractor on the spot; always do thorough research before hiring anyone.
Home Improvement Loan Scam
Taking out a loan to fund home renovations can be an intelligent financial decision, but beware of scammers who offer loans with low interest rates and no credit checks. These scammers often disappear once they have received the loan payment, leaving homeowners with high interest rates and no work done.
Free Inspection Scam
Scammers may offer free home inspections, claiming to find issues that require urgent repair. They will then offer to fix these problems at an inflated price, or they may even create fake issues to make more money. Always get a second opinion before agreeing to any repairs.
Change Order Scam
Some contractors may try to add additional costs by claiming unexpected issues have arisen during the renovation process and require extra work. While unforeseen issues can happen, always be wary of significant changes in the original plan and ask for detailed explanations and evidence before authorizing any change orders.
Fake Invoice Scam
Scammers often send fake invoices or bills for services never rendered or unused materials. They may also charge for unnecessary services or inflate the prices of materials and labor. Always thoroughly review any invoices and ask for detailed receipts to avoid falling victim to this scam.
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