Building a custom home is a substantial investment, so you need to do your homework and ensure that you hire the right people to make your vision a reality. One of the most important individuals you will hire is the custom home builder, the contractor who will manage the project to your expectations. If your contractor displays any of these red flags, it may be best to go in another direction.

1. The builder demands a large sum of money up front

Much of a custom home builder’s job takes place before any actual construction begins, so expecting him to go unpaid at first is unrealistic. Still, those that demand an excessive amount may be planning to pocket your money and run.

2. There is either no contract or a poorly written one

Should something go awry, only what is written in the contract is legally enforceable. Therefore, it is prudent to ensure that everything is coherently in writing to protect your own interests.

3. The estimate is too low or lacking in detail

A good estimate includes not only a realistic total cost, but a complete breakdown of what money is going where. If your contractor fails to deliver this, he may not know what he is doing or planning to scam you.

4. The contractor “sells” you aggressively

Quality products and services sell themselves, so overly aggressive pitches that sound like a TV infomercial are probably indicative of substandard performance and/or confidence. Do not fall for it.

5. The contractor lacks insurance

Each state has a State Contractor’s Board that regulates construction work within its borders. Some rules vary by state, but all contractors are always required to have written proof of insurance. It is illegal to hire someone who lacks it.

6. The contractor has multiple unresolved insurance claims

Skilled contractors do not screw up often and work to resolve any mistakes immediately. A contractor with many pending claims has failed to take these obvious steps, so it is right to question his competence.

7. The contractor lacks references

Good contractors proud of their work want you to talk to their past clients. Shady contractors specializing in cheap shortcuts do not. Good contractors provide references without being asked. Bad ones fail to do so.

8. The contractor offers a low rate for marketing purposes

This is generally not a marketing tactic employed by contractors, so it is almost certainly a scam of some kind.

With these Red Flags Warnings When Looking For A Custom Home Builder, you will know who to avoid when hiring a contractor.