10 contractor red flags to watch for
A bad contractor can cost you far more than a high quote — think unfinished work, failed inspections, or a disappearing act with your deposit. The warning signs are usually visible before you ever sign.
Here are the ten red flags that matter most, grouped by type.
Pricing red flags
- A lump-sum price with no itemized breakdown.
- A large deposit demand — anything above ~10–15% upfront.
- A "cash only" or "cash discount" push (often means no paper trail or taxes).
- Vague "allowance" or "miscellaneous" lines with no specifics.
- A project-management or overhead fee above 15% of the total.
Credibility red flags
- No license or proof of insurance (verify both before signing).
- No written contract — only a handshake or a number on a napkin.
- No references, reviews, or past work they'll show you.
- They say permits aren't needed for work that clearly requires them.
Behavior red flags
- High-pressure "sign today or the price goes up" tactics.
- They bad-mouth every other contractor instead of standing on their own work.
- No clear start date, timeline, or payment schedule.
- They're hard to reach before you've even hired them (it only gets worse after).
What to do if you spot them
One red flag isn't always a dealbreaker — but two or more is your cue to walk. Verify the license, get everything in writing, get other bids, and never pay a large sum before work begins. The right contractor will happily meet all of these.
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Check my quote freeFrequently asked questions
How much deposit is a red flag?
Anything above roughly 10–15% upfront. Some states legally cap deposits at 10%. Never pay half or more before work starts.
Should I avoid cash-only contractors?
Be cautious. A cash-only push often means no paper trail, no warranty recourse, and potential tax avoidance — all of which leave you exposed if something goes wrong.
How do I verify a contractor's license?
Most states have a free online license lookup through their contractor licensing board. Check the license is active and matches the name on your contract.