6 Sleazy Home Improvement Scams

It's time for less talk and more action.

Like most homeowners, you probably spent the winter months talking about the various home improvements you'd like to make. Now that's spring is here, it's time to act on those remodeling impulses. After all, spring is a time of renewal, change, and new beginnings.

Unfortunately, it's also a time when crooked contractors come out of the woodwork to prey on innocent homeowners. "Some are actual scam artists, while others are just incompetent or unethical," says Ellis Levinson, a consumer reporter and author of the book "Hiring Contractors Without Going Through Hell."

The good news is that you can protect yourself against these scams. In fact, many scams are easy to detect if you take the time to become an educated, savvy consumer. "Compare prices, call references, and research the project you're undertaking in advance," says Bruce Johnson, author of "50 Simple Ways to Save your House." It seems simple but many people find this process overwhelming.

Levinson calls it emotional laziness. "It's amazing to me how much time people will put it into buying a TV because it's fun. But when it comes to remodeling a kitchen, people have no time. They see it as drudgery," Levinson says. Ultimately, he says, doing the research to protect yourself is much easier than paying for the consequences.

To help you differentiate a scam from the real deal, Bankrate has compiled a list of the most common remodeling scams. Beware of the following key phrases, and remember, if it sounds too good to be true, it probably is.

Key phrases to beware of:

"I just happen to be working in your neighborhood."

"I have materials left over from another job."

"I need the cash up front."

"I have a special offer that's good for today only."

"I can help you finance the project."

"I want to use your home as a model."

"I just happen to be working in your neighborhood."

This happens when contractors appear at your home unsolicited to inform you that they noticed some problems with your home's (insert: chimney, driveway, windows, plumbing, etc.) while working on a neighboring home. For example, the contractor might say he or she was on the roof of your neighbor's home and noticed missing shingles on your roof. This may be the case -- but often no repair is needed.

More important, legitimate, established, and reputable contractors tend to find enough work through word of mouth referrals that they don't need to be going door to door to attract customers. Be especially skeptical if the contractor drives a vehicle with no company name, no phone number or with out-of-state license plates. "Do not let these people enter your home," Johnson warns. "Often they want to be invited inside to see if something is worth stealing."

Also, be sure to ask for proof that he or she is insured, licensed, and bonded. "Homeowners that check out contractors beforehand and research their credibility are usually more satisfied with the job than if they abruptly chose a contractor," says Jeremy Zidek, communications coordinator for the Better Business Bureau in Alaska.

"I have materials left over from another job."

Sometimes contractors will offer a discount for the job under the pretense that they have extra materials and want to use up their supply. The truth is good contractors order enough supplies to meet the needs of each job, as often the price for supplies is typically included in the contract. Further, if a contractor has materials left over from a previous job and is making them available to you, he either didn't finish the job or is cheating the previous customer. Or he may have never had a previous job but has materials to make it look like he did.

"I need the cash up front."

This contractor will take your money and disappear before or (even worse) after your project gets underway. It can be frustrating trying to chase after him, getting him to come back and finish the job or hiring someone else to clean up a messy work site. Don't ever pay in full for a project before any work has been done. Note: you may be expected to pay a down payment. "The contractor may not want to block out time in his busy schedule without some money up front," Levinson says. He recommends creating a payment schedule with the contractor at the start -- wherein you pay some portion only upon completion of a project. Johnson swears by the one-third theory. "The most I will ever give somebody up front -- after I have called references and checked him out -- is one third of the money," he says. He gives them another third when the project is halfway done. "Their profit is in their last payment because that's what going to keep them on the job."

"I have a special offer that's good for today only."

If a contractor is offering a "special deal," ask them to legitimize what they are offering. While this is a common sales technique, you can ask them for documentation of this bargain -- a flyer, for example, that the contractor has mailed or delivered in the past. Or one from another contractor at a higher price. "Any time a contractor puts pressure on a homeowner to act quickly about making a remodeling decision, that's a red flag," Zidek says. Remodeling decisions should be made carefully, not hastily.

"I can help you finance the project."

Sometimes a contractor will suggest you borrow money from a lender that the contractor knows. This could indicate a home improvement loan scam, as the contractor may be getting kickbacks from the lender. Homeowners may believe they're financing a small remodeling project loan, when in fact they're signing for a much larger loan, if not completely refinancing their home. Never finance through your contractor without shopping around and comparing loan terms.

"I want to use your home as a model."

The scam centers on the idea of using your home as a vehicle or "show home" to advertise their services in return for a hefty discount. Established contractors should have completed enough previous projects that they won't need your job as a demonstration.

Still more scams

While any part of your home could be a target, many scams tend to center around driveways, roofs, chimneys and furnaces.

Driveway Sealant Scam: If a contractor offers to seal your driveway for a heavily discounted price, find out what materials will be used as sealant. Cheap, inferior substances may look great initially but will wear off in three months.

Chimney Repair: These scam artists often lure their victims via advertisements in local newspapers offering gutter cleaning at a cheap price. Once the work is performed, they claim the chimney is in dire need of structural repairs. To provide so-called evidence of this, they will make it look like the chimney is in a state of decay by removing bricks and mortar from the chimney. Note: There might be decay if you burn a lot of wood and don't get your chimneys inspected every year. Another chimney scam is when a contractor says there's a threat of carbon monoxide poisoning if the chimney is not repaired immediately. This is a serious concern, so if you are unsure about whether to trust this person, get a second opinion from a reputable contractor.

Hot Tar Roofing: Contractors send mailings, telemarket, or go door-to-door in this scam, offering a price that sounds too good to be true & want to do the job immediately. They often use substandard materials. You may not realize you've been duped until heavy rains cause the roof to leak resulting in damage to the building's interior. Sometimes you can't determine the quality of the job until after it has been completed. "If you're having major work done, ensure that your contract has a hold back clause where you withhold the final payment until 30 days after completion of a project," Levinson says.

Furnace repair: Once they inspect your furnace, they may claim it is leaking dangerous gases or is about to explode. Ask your utility company to come and inspect your system. Also be wary if they tell you the unit is too small or needs a complete overhaul. When choosing a contractor always get several estimates on the needed repair.

Duct Cleaning: In very unusual circumstances do ducts need to be cleaned. The scheme is called a "blow and go" because the scam artist will use a small vacuum cleaner with no special filters to stir up the dust, pollen, mold, and other contaminants instead of removing them. Duct cleaning can be necessary if there is mold in the house or if the heatinf or air condition has been running with inadequate or nonexistent filtering. If you change filters regularly, your ducts don't need to be cleaned.