10 Red Flags When Hiring a Home Service Contractor

Not every contractor who offers to work on your home is legitimate. Knowing red flags before signing a contract can save you thousands in poor workmanship, incomplete projects, or outright scams.

1. No License or "Doesn't Need One"

Arkansas requires licensing for most home improvement work. If a contractor claims they don't need a license, they're either uninformed or dishonest.

What to Do: Always verify licensing through the Arkansas Contractors Licensing Board before hiring anyone.

2. Cash-Only, No Contract

Legitimate contractors accept multiple payment methods and provide detailed written contracts. Insisting on cash-only payments and handshake agreements suggests they're avoiding taxes or have poor credit preventing them from accepting cards.

Red Flag Behavior:

What to Do: Require a written contract specifying work scope, materials, timeline, payment schedule, and warranty terms.

3. Large Upfront Deposits

Arkansas law generally prohibits contractors from requesting deposits exceeding one-third of the total contract price. Requesting 50% or more upfront is a warning sign.

Why It Matters: Unscrupulous contractors collect large deposits from multiple homeowners, then disappear or intentionally delay work.

What to Do: Never pay more than 30-35% upfront. Tie remaining payments to completion milestones.

4. High-Pressure Sales Tactics

Pressure to sign immediately—"This price is only good today" or "We're in your neighborhood and can start tomorrow"—is a classic scam technique.

Common Tactics:

What to Do: Get at least three quotes. Legitimate contractors understand that homeowners need time to make informed decisions.

5. No Insurance Documentation

Any contractor working on your property should carry:

What to Do: Request certificates of insurance and verify them with the insurance company directly. If they can't provide proof, don't hire them.

6. Poor Communication

Difficulty reaching a contractor before work begins will only get worse once they have your deposit.

Warning Signs:

What to Do: Test communication during the bidding phase. If it's poor now, walk away.

7. No Physical Business Address

Legitimate contractors have established business locations, even if it's a home office. Post office boxes or no address at all suggests a fly-by-night operation.

What to Do: Search the business name and verify it's registered with Arkansas Secretary of State. Check Google reviews for the business.

8. Can't Provide References

Experienced contractors should have recent customers willing to discuss their work. Inability or refusal to provide references is suspicious.

What to Ask References:

What to Do: Actually call the references. Don't just accept a list—verify that real people had positive experiences.

9. "I Know a Guy" for Permits

If a contractor suggests skipping permits or says they'll "handle it" with a wink, run. Unpermitted work:

What to Do: Confirm what permits are required and verify they're pulled in your name (or the contractor's, if allowed in your municipality).

10. Extremely Low Bids

If one quote is significantly lower than others, it's often because:

What to Do: If a bid seems too good to be true, ask detailed questions about materials, timeline, and what's included.

Additional Warning Signs

Online Presence Red Flags:

On-Site Behavior:

What to Do If You've Hired a Bad Contractor

If Work Hasn't Started:

If Work Is Incomplete:

If Work Is Defective:

Protecting Yourself

Before Hiring:

1. Verify Arkansas contractor license

2. Confirm insurance

3. Check references

4. Get multiple written quotes

5. Read online reviews from multiple sources

6. Ensure contract includes everything discussed

During Work:

1. Never pay ahead of work performed

2. Require invoices for materials

3. Inspect work before final payment

4. Retain 10% until project is 100% complete

5. Verify permits are closed with inspections passed

After Completion:

1. Get lien releases from contractor and subcontractors

2. Obtain warranty documentation

3. Keep all paperwork (contract, receipts, permits)

4. Take photos of completed work

For Northwest Arkansas Homeowners

Benton County has active home services markets in Bentonville, Rogers, Centerton, and Bella Vista. While most contractors are honest, rapid growth in the area has attracted some less reputable operators.

Always verify credentials, get multiple quotes, and trust your instincts. If something feels wrong during initial interactions, it probably is.

Need help finding vetted contractors in Northwest Arkansas? We can connect you with licensed professionals who welcome scrutiny of their credentials and track record.