Sometimes I’m competing with an unlicensed contractor and they end up with the unlicensed guy even if they don’t have lic. insurance.
Because they are doing a better job of providing the homeowner with correct information. People do business with people that they trust. You need to that little extra to provide that for your customer. You don’t need a license to complete a lot of small task and customers are aware. If you are a licensed contractor add that customer satisfaction and marketing to your game.
Save money…the unlicensed contractor have way less overhead and can usually do the job alot cheaper.
Typically two things
Price and ignorance. Unfortunately price usually. It’s a shame with all the info out there people still do this.
Because they try to “save money” . Unfortunately some people still believe that they can do “better” on house renovations etc with unlicensed contractor. Most of the projects in today’s world need permits and insurance which licensed contractors can fully provide in any circumstances. In case of accidents while performing job or wrong /unfinished projects there is not much you can do with unlicensed contractor. You, the owner will be responsible for all the problems and issues wich will come with that now or later.
Most of homeowners that decide to remodel their homes set up a budget to complete the remodeling. When the time to hire contractors come, they always look for different quotes to compare price. If a license contractor offers a higher price (obviously because he knows what his work is worth, follows all the guidelines, and has all the insurances needed to do the project), then surely his price is going to be a little higher than somebody’s without the license. If the client is only concerned with price and just want to have the work done, he will probably hire the unlicensed contractor. Otherwise, they will make sure his contractor have the required paperwork, if the price is reasonable because he wants to make sure his project is going to be done right.
Hi there,
More often than not, clients decide to hire a non licensed contractor due to cost. The belief system that saving on the project is more important than anything. Unfortunately for clients, the one time savings may end up costing them triple the amount saved due to undetected and hidden mistakes such as wiring, foundation, etc.
Hire smart, hire a licensed contractor for insurance coverage and peace of mind.
If your going to go with an unlicensed contractor just remember, you get what you pay for !
More often than not, clients decide to hire a non licensed contractor due to cost
To save money. The problem with that is unlicensed contractors don’t have liability insurance and because they are unlicensed can’t pull permits either. Both put the home owner at great risk. If something goes wrong, you have to spend more money to be made whole.
Real easy if the unlicensed contractor is doing work he isn’t suppose to be doing a simple phone call to the local inspectors office should help.
LOWER PRICE.
An unlicensed “contractor” will almost always be able to offer a lower price because they are not including the (significant) cost of general liability insurance, worker’s comp insurance on their employees, contractor’s bond and license fees. They also don’t have to hire licensed sub-contractors since they’re breaking the rules already.
Most homeowners don’t fully understand the risk they are putting themselves in by hiring an unlicensed contractor. If things don’t go well, they stand to lose a lot of money. Without a licensed contractor, the homeowner by law is “self-contracting” and assumes all liability. For example, if there is an injury on the job and the employee does not have their own medical insurance, they can sue the homeowner for medical bills, unemployment, etc. Payroll taxes and contributions on the workers becomes the homeowners legal responsibility. If there is damage done to the property during the job, it’s very unlikely the unlicensed “contractor” has insurance so the cost to recover falls entirely on the homeowner. If the unlicensed “contractor” does sub-par work or fails to complete the job at all, the homeowner will have little recourse in a court of law. There are probably additional risks I’m not thinking of…
In California, any job worth more than $500 in labor and materials requires a license.
Most consumers who hire an unlicensed contractor are uninformed about the protection licensing provides. Usually, they find out the hard way that this is a way to become informed. That is why we do stress consumer education about how to hire any contractor. Really, the BBB slogan of “Before you invest, investigate”! is good advice. An informed consumer eventually is a great client for any qualified, professional and licensed contracting company.