Most homeowners who get burned by a bad contractor didn't miss obvious warning signs - they just didn't know what to look for. Austin's construction boom has brought in a lot of people chasing work who have no business running a project at your scale. These five warning signs appear before the contract is signed. If you spot more than one, move on.
They Ask for 30–50% Upfront Before Work Starts
Never pay more than 15% before work beginsRequesting half your project budget before a board is cut is one of the most common contractor scams. A legitimate GC needs a modest mobilization deposit - typically 10–15% - to order materials and book crew. If someone needs a large sum before doing anything, they either have serious cash flow problems or they're not planning to finish the job.
? Source: Better Business BureauNo Written Contract - Just a Handshake
If it's not in writing, it doesn't existA real contractor provides a written scope of work with itemized costs, a payment schedule, and a completion date before you sign anything. Contractors who push back on written contracts are protecting themselves, not you. Without a contract, every disagreement becomes your word against theirs and you have no legal recourse.
Source: Diamond B ConstructionThey Can't Produce Proof of Insurance
COI required before anyone starts workAsk for a Certificate of Insurance - a COI - before work begins. A properly insured contractor can produce one within hours of being asked. Stalling, excuses, or 'I'll get that to you later' means they're likely uninsured. Any accident, property damage, or injury on an uninsured job can become your financial problem.
Source: Texas Department of InsuranceTheir Bid Is Dramatically Lower Than Everyone Else's
The low bid almost never wins long-termIf three contractors bid $45,000–$55,000 and one comes in at $27,000, they're either missing large portions of scope, planning to cut corners on materials, or setting you up for change orders that push the final number well above the others. Get itemized bids and compare them line by line - a low number is not a deal if it's incomplete.
Source: Diamond B ConstructionThey Never Bring Up Permits
No permit talk is a serious red flagOn any project requiring a permit - additions, structural work, electrical, plumbing - a professional contractor brings it up in the first conversation. If yours never does, ask directly. A contractor who suggests skipping permits to 'save time and money' is putting your title, your insurance coverage, and your home's resale value at serious risk.
? Source: City of Austin Development ServicesFrequently Asked Questions
What should I do if I've already hired a contractor showing these red flags?
Is a low bid always a bad sign?
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Hire a Contractor You Can Trust
Diamond B gives you a written scope, itemized pricing, and pulls every permit the job requires. William is on-site every day. That's the deal.