Residential Contractor Series – A Common Scam

Oct 30, 2009

Buyer beware of ridiculously low advertised prices for home improvement projects. The figures are as high as 75% of the home remodeling print ads are based on a false pretense. These ads work to get a sales appointment with you and a low price can be their ticket into your home. For example, the cost of vinyl siding advertised for your home may be lower quality than other posted costs, and you understand that. But the cost of labor, caulking, and/or upgrades increases the cost. In the long run you may be charged more with these tactics, and get a lower quality product for your home.

Maybe the most prevalent use of this technique is in the window industry with a product that advertises for $189. The ad may say “Any size white double-hung window for $189”. And of course, they advertise in big letters that this is “Installed” or “Includes Installation”.

This sounds like a great deal and prompts you to call the phone number listed. What you see though is most likely not what you want for your home. Let’s deconstruct the window and its costs:

  • They pay subcontractors around $35 to $50 to install each window.
  • They pay their salespeople around $15 for each window they sell.
  • Add the cost for caulking, vinyl wrapping, material shipping, overhead, and profit.

After all of this the window maybe costs $60, which is cheap and too good to be true. At this point, you have a window that is poorly constructed and has poor energy efficiency. You might ask over the phone if the window qualifies for the Federal Tax Credit that can save you up to $1,500. Don’t be shocked if it does not. Only the rich can afford a $189 window because they can afford to do it again.

This is legal to advertise the $189 window because you will have to purchase upgrades to get this window to where you need it for your home. Here are some additions that you will want to purchase:

  • Locks
  • Low-E glass
  • Sill and jamb replacement
  • Exterior trim
  • Insulation in and around the frame
  • Landfill disposal of your old windows
  • Local sales tax

Now you are paying over $700 for an inferior window and you still may not have a warranty for glass breakage, warpage, and air leaks. Lost in the negotiation is the fact that you also lose the Federal Tax Credit. Now you can decide if these windows are truly in your best interest.

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