Beware of Home Renovation Scams
May 21, 2024
Are you thinking of using an FHA loan to renovate or remodel your home? Loanwise, your options include FHA cash-out refinancing and FHA rehabilitation loans like the FHA 203(k) or the 204(h).
But what about your options for services such as builders, inspectors, and other third parties? Some house hunters diligently search for just the right lender and just the right home, only to fail to apply that discipline in other areas related to the home loan.
That can lead to problems associated with scammers. Here are some signs to avoid.
When a Third Party Reaches Out to You Unsolicited
Are you looking for a builder to work on your roof, basement, or other areas? Do you need an electrician, plumber, or an energy-efficiency consultant?
In all cases, never respond to third parties that offer you their services without you having contacted them first. The knock on your door from the builder who just happens to be “in the area” could be a scam waiting to happen. Don’t fall for it.
When the Third Party You Reached Pressures You for an Immediate Decision
No matter the reason, any time pressure is placed on you to choose how to spend your renovation money, do not give in, as false dilemmas are a major indication that you’re being scammed. Don’t use any contractor who tries this tactic on you. They don’t have your interests in mind.
When the Contractor Will Only Take Cash
Don’t hire them and do not pay cash for any reason in a real estate transaction.
When the Third Party Asks You to Obtain Permits
If your contractor cannot obtain their permits, you should probably not do business with them. This is a red flag to be respected, as no homeowner should have to get permits unless THEY are doing the work.
When the Third Party Tries To Steer You to a Lender
Use your own chosen lender, and do not give in to pressure to use the builder’s preferred choice.
When the Third Party Claims to Have Excess Materials From a Previous Job
This is a common swindle. Don’t use any contractor who offers to cut you a discount because they have “leftover material.”
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RELATED VIDEOS:
Get to Know HUD
Using an FHA Loan Calculator
Living in a Single Family Home
But what about your options for services such as builders, inspectors, and other third parties? Some house hunters diligently search for just the right lender and just the right home, only to fail to apply that discipline in other areas related to the home loan.
That can lead to problems associated with scammers. Here are some signs to avoid.
When a Third Party Reaches Out to You Unsolicited
Are you looking for a builder to work on your roof, basement, or other areas? Do you need an electrician, plumber, or an energy-efficiency consultant?
In all cases, never respond to third parties that offer you their services without you having contacted them first. The knock on your door from the builder who just happens to be “in the area” could be a scam waiting to happen. Don’t fall for it.
When the Third Party You Reached Pressures You for an Immediate Decision
No matter the reason, any time pressure is placed on you to choose how to spend your renovation money, do not give in, as false dilemmas are a major indication that you’re being scammed. Don’t use any contractor who tries this tactic on you. They don’t have your interests in mind.
When the Contractor Will Only Take Cash
Don’t hire them and do not pay cash for any reason in a real estate transaction.
When the Third Party Asks You to Obtain Permits
If your contractor cannot obtain their permits, you should probably not do business with them. This is a red flag to be respected, as no homeowner should have to get permits unless THEY are doing the work.
When the Third Party Tries To Steer You to a Lender
Use your own chosen lender, and do not give in to pressure to use the builder’s preferred choice.
When the Third Party Claims to Have Excess Materials From a Previous Job
This is a common swindle. Don’t use any contractor who offers to cut you a discount because they have “leftover material.”
------------------------------
RELATED VIDEOS:
Get to Know HUD
Using an FHA Loan Calculator
Living in a Single Family Home
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