Red Flags When Hiring a Contractor (And What to Do Instead)

Most contractor horror stories start with a warning sign that was noticed but ignored. Learning to recognize red flags before hiring - and before work starts - prevents the expensive mistakes.

Red Flags Before the Job

Requires a Large Cash Deposit Upfront

A deposit of 10-25% is standard for larger jobs. More than that - especially in cash - is a scam risk. Contractors who demand 50% or full payment before starting have financial leverage over you with no incentive to perform.

What to do instead: Agree to a payment schedule tied to work milestones. "1/3 at start, 1/3 at rough-in completion, 1/3 at project completion" is a reasonable structure for large jobs.

Can't Provide a License Number

In California, a contractor license is generally required when a project needs a permit, uses additional workers, or totals $1,000 or more in labor and materials. If they can't give you a CSLB license number or get vague when you ask, stop the process.

What to do: Verify at cslb.ca.gov before any commitment.

Can't Provide Insurance Certificate

General liability and workers' comp are non-negotiable. A contractor who can't produce a certificate within 24 hours doesn't have current coverage.

What to do: Require the certificate before work starts. Verify it's current (check the expiration date).

Won't Provide a Written Estimate

Verbal estimates aren't commitments. Any professional operation can provide a written scope and price.

What to do: If they refuse or keep delaying, move on.

Quotes Significantly Below Everyone Else

A quote that's 30-40% below market rate usually means: they'll add charges later, they'll use inferior materials, they'll do incomplete work, or they're desperate for cash and may not finish.

What to do: Ask specifically what's included and what materials they're planning to use. Often the difference becomes clear.

Door-to-Door Solicitation

Reputable contractors who are busy with referral work don't knock on doors. Door-to-door solicitation for home repair is a known vector for fraud, especially after storms.

What to do: Don't agree to anything at the door. Get their business card, research the company, and call them on your timeline if you're interested.

Red Flags During the Job

Requests Additional Cash Payment Mid-Job for "Unexpected Issues"

Change orders happen. Legitimate change orders are written, explained, and agreed to before the additional work proceeds. Cash requests mid-job without documentation are not legitimate change orders.

What to do: For any additional work beyond the original scope, require a written change order with the scope and additional cost before authorizing it.

Work Doesn't Match the Quote

If you're seeing cheaper materials than specified, incomplete work, or missed steps - speak up immediately. Mid-job is when you have leverage; after completion you have much less.

What to do: Compare the work being done against your written estimate. If something differs, ask before it goes further.

Subcontracts Without Telling You

Your contract is with the contractor you hired. If they're subcontracting the work without telling you, you have no direct relationship with the person actually doing the work - and may have less recourse if something goes wrong.

What to do: Ask upfront if any portion of the work will be subcontracted and to whom.

Asks You to Pull the Permit

Contractors pull permits, not homeowners - unless you're doing the work yourself. If a contractor asks you to pull the permit, it usually means they don't have the license to pull it themselves.

What to do: If the contractor is licensed to do the work, they should be pulling the permit. Don't agree to pull permits on their behalf.

Red Flags After the Job

Disputes What Was Agreed To

Verbal agreements are the problem here. "That wasn't included in the quote" is impossible to dispute without written documentation.

What to do (prevention): Get everything in writing before work starts. What's in the scope, what's not, and what the process is for changes.

Refuses to Return for Warranty Work

A contractor who won't come back for warranty repairs on work they did is showing you they don't stand behind their work.

What to do: Document the issues in writing (email or text) creating a paper trail. If they refuse warranty work on legitimate defects, file a complaint with the CSLB.

What to Do If You've Already Hired a Problem Contractor

• Stop paying immediately if work is abandoned or defective
• Document everything with photos and written communication
• Send a written demand for completion or repair
• File a complaint with CSLB (for licensed contractors)
• Consider small claims court for amounts under $10,000

Bottom Line

Most contractor problems are predictable. Red flags before hiring - no license, no insurance, cash-only, door-to-door - are the easiest to act on. Stop the process when you see them.

Sources and editorial notes

Prices and permit requirements vary by location, property, equipment, and scope. Treat price ranges as planning estimates and confirm current requirements with the relevant authority and contractor.

• California Contractors State License Board - when a contractor license is required

Related guides

• What to Check Before Hiring a Contractor (License, Insurance, Reviews)
• What Customers Look for When Hiring a Contractor
• What HVAC Certifications Should Your Technician Have?

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