By Matt DiBara, DiBara Masonry
For many, a house is the largest investment one will make in a lifetime. With so much at stake, the home improvement, contracting, and home insurance industry is rife with deception. Homeowners need to be savvy and stay alert to people out to scam them out of their hard-earned money and out to put their stature as homeowners in jeopardy. Here are five of the top scams that homeowners fall for time and again.
- Insurance Related Scams
Wading through the murky waters of insurance can be a daunting task for any property owner not up on insurance terminology or insurance law. Unscrupulous contractors like to take advantage of people’s unfamiliarity with all of the “ins and outs” of insurance claims. Scammers usually prowl neighborhoods following damaging storms, promising cheap fixes with low-ball bids. They typically try to “weasel” up-front payments out of a property owner, or at least large down payments. These scammers will try to steer you away from filing legitimate homeowner insurance claims and then skip town with your cash. If they do any work, it’s typically substandard. If a scam contractor completes work on storm damage before a legitimate insurance adjuster can inspect the damage, your claim will likely be denied, and you’ll be stuck footing the bill to repair the shoddy work.
- Unlicensed Contractors Scams
When you need work done on your property, you want that work done by a professional. Property owners can also be persuaded to cut corners on researching companies or ignore red flags if the price is right or run up against a smooth-talking contractor. One sign that a contractor is probably unlicensed is they want the homeowner to pull their own permits. This action leaves the homeowner vulnerable if things go south legally. It also should make one question why a contractor can’t pull permits. Unlicensed contractors may also try to use the license of another contractor illegally. Always protect yourself and do your due diligence research on any company you are looking to hire.
- Mortgage Scams
A common mortgage scam is called “bait-and-switch.” With this type of scam, potential buyers get enticed with excellent interest rates and impressive terms. However, once the buyer signs on the dotted line, they are told the terms have changed or no longer qualify for the amazing rates. The buyer is then stuck with less-than-favorable rates, bad terms, or fees. Property owners should also watch out for other well-documented mortgage scams, like reverse mortgages scams. These scammers take advantage of home equity conversion mortgages. Scammers recruit people, typically seniors, and apply for these loans on the senior’s behalf based on inflated appraisals. The homeowner continues to pay the home’s taxes and insurance, but the scammer takes the remainder.
There are other mortgage scams (like equity stripping and foreclosure-related scams). Anyone looking to buy a property should always research their financing options and beware of anything that sounds too good to be true.
- Bill Scams and Phishing
When a person buys a property, they get inundated with an incredible amount of paperwork. Scammers take advantage of this fact by sending people fake bills or sending phishing emails in hopes of getting paid by becoming lost in the shuffle of money going out the door. Always thoroughly read and review any mail or emails you get requesting payment for one thing or another. If you are concerned that something may be less than legitimate, call your bank or mortgage lender to see if they recognize the vendor.
- The Uninvited
Much like we referenced above with insurance scams, sometimes people will show up on your doorstep promising great deals on landscaping or roofing. They may say, “Hey, I was just in the neighborhood and noticed that your roof needed replacing,” or “I’m working on your neighbor’s property, and we’re offering a deal for your block only!” Your first red flag should be that a contractor is walking door to door offering work. Contractors “worth their salt” are typically too busy to sell their services door to door.
If a random contractor ever approaches you or rings your doorbell, ask for references. Follow up on whatever references they give you (if they provide you with anything) and do your best to research them. If you suspect something more unlawful is going on, do not hesitate to contact authorities and report the scam.
There will always be dishonest people out there looking to make a quick buck from unsuspecting people. You’ve worked hard to be able to own your home and your other properties. Make sure to use good judgement and conduct appropriate due diligence and thorough research to protect yourself and your investments.Matt DiBara is the owner of DiBara Masonry based in Los Angeles. He has spent his career serving clients with top-of-the-line masonry work, and he has also become an advocate for property owners through his passion project, “The Undercover Contractor.” Mr. DiBara may be reached at (323) 313-0165 or visit DiBara Masonry’s website at www.dibaramasonry.com