5 Red Flags When Hiring a Contractor (And How to Avoid Them)
What to Watch For — And What Good Contractors Do Instead
Most contractors are honest professionals who take pride in their work. This post is not about them.
This is about the minority who operate without transparency — and the specific warning signs that identify them before you sign a contract. Every experienced homeowner and every reputable contractor knows these red flags when hiring a contractor. The difference is that first-time renovators often learn them the hard way.
You do not have to. The five red flags below share a common thread: they all represent a lack of transparency. Trustworthy contractors welcome scrutiny. They provide written documents, verifiable credentials, and references without being asked. The ones who resist are telling you something.
Here is what to watch for, what to do instead, and why the best contractors actually appreciate informed clients.
Red Flag 1: No Written Scope or Estimate
The warning sign: The contractor walks through your space, gives you a verbal number — "probably around $25K" — and suggests you shake on it. No written document. No line items. No scope of work.
Why it matters: A verbal estimate is not an estimate. It is a guess with no accountability. Without a written scope, there is no agreed definition of what the project includes. Every ambiguity becomes a potential change order. "I thought that was included" is the most expensive sentence in renovation.
What to do instead: Require a written scope of work and a line-item estimate before agreeing to anything. The scope should describe what work is being done, what materials are specified, what is excluded, and what milestones define the payment schedule.
A contractor who refuses to put it in writing is a contractor who wants room to redefine the deal later.
Red Flag 2: Demands Full Payment Upfront
The warning sign: The contractor asks for 50% or more of the project cost before any work begins. Some ask for 100%. They may frame it as "securing materials" or "reserving your slot in the schedule."
Why it matters: Large upfront deposits transfer all financial risk to the homeowner. If the contractor delays, underdelivers, or abandons the project, your money is already gone. Recovery through legal channels is slow, expensive, and uncertain.
Industry standard for deposits ranges from 10-15% for large projects, with the remainder paid in milestones as work progresses. Anything significantly above that warrants questions.
What to do instead: Negotiate milestone-based payments tied to completed phases of work. Demolition complete — payment. Rough-in complete — payment. Finishing complete — final payment. Each release is earned by results, not promises.
Escrow-protected payment structures formalize this. Funds are committed but held by a neutral third party, releasing only on milestone confirmation. This protects both sides.
Red Flag 3: No Licence, Insurance, or Verifiable Credentials
The warning sign: The contractor cannot produce a valid licence number, proof of liability insurance, or WSIB (Workplace Safety and Insurance Board) coverage when asked. They deflect, delay, or claim their reputation speaks for itself.
Why it matters: An unlicensed, uninsured contractor exposes you to personal liability. If a worker is injured on your property and the contractor lacks WSIB coverage, you may be held liable. If the work causes damage (water leak, electrical fire) and the contractor has no insurance, you bear the cost.
In Ontario, many types of renovation work require specific trade licences. Electrical, plumbing, and HVAC work must be performed by licensed professionals under the Ontario Building Code.
What to do instead: Ask for licence numbers and verify them with the relevant licensing body. Request a certificate of insurance naming you as additionally insured. Confirm WSIB coverage. These are standard requests that every legitimate contractor can fulfil in minutes.
Red Flag 4: No References or Portfolio
The warning sign: You ask for references from recent clients or photos of completed projects, and the contractor gives excuses. "My clients prefer privacy." "I do not take photos." "I am new to this area but I did lots of work elsewhere."
Why it matters: A contractor's past work is the single most reliable predictor of their future performance. Professionals who do quality work are proud to show it. They have photos, testimonials, and clients who will take your call.
The absence of verifiable past work does not necessarily mean incompetence. But it removes your ability to evaluate quality, professionalism, and reliability before committing.
What to do instead: Ask for three to five recent references and actually call them. Ask about timeline adherence, communication, quality, and whether they would hire the contractor again. Look at photos of completed work. Check online profiles for project portfolios.
Red Flag 5: High-Pressure Sales Tactics
The warning sign: "This price is only good today." "I have another client who wants to start next week — if you do not commit now, I will have to give your slot away." "I can knock off 15% if you sign tonight."
Why it matters: High-pressure closing tactics are a sales technique, not a project management practice. Legitimate contractors are busy because they do good work. They do not need artificial urgency to win business. A fair price today is a fair price next week.
Pressure to commit without time to compare quotes, verify credentials, or review the scope is a red flag because it bypasses your due diligence. That is the point.
What to do instead: Take the time you need. A professional contractor will give you a written quote, answer your questions, and let you evaluate on your own timeline. If the "deal" disappears because you asked for a few days, it was not a deal.
The Pattern: Why All 5 Red Flags Point to One Problem
Look at the five flags together:
No written scope — avoids documentation
Full upfront payment — avoids accountability
No credentials — avoids verification
No references — avoids scrutiny
Pressure to decide — avoids comparison
Every flag is a form of avoiding transparency. Trustworthy contractors operate in the opposite direction. They document, verify, show their work, and welcome comparison. These are not "extras" — they are the baseline for professional practice.
Platforms like CONP build these protections into the structure. AI-generated scopes ensure every project has a written description before bidding starts. Escrow-protected payments replace upfront deposits with milestone releases. Verified pro profiles display credentials, licences, and past work. Homeowners compare multiple bids on the same scope.
The red flags do not disappear. But the systems that enable them do.
Key Takeaways
All five red flags trace to one root cause: a lack of transparency. Written scopes, verified credentials, milestone payments, and verifiable past work are not extras — they are the minimum standard.
Most contractors are professionals who welcome informed clients. These red flags help you filter out the minority who are not.
Build transparency into the process from day one — use written scopes, milestone-based payments, and verified credentials as your hiring baseline.
Hire With Confidence
On CONP, every project starts with an AI-generated scope, every pro is verified, and every payment is escrow-protected by milestone. Describe your project, compare bids from verified contractors, and hire with the transparency you deserve.
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