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Protect Your Home: Texas Contractor Red Flags

Contractor Red Flags • Sep 25, 2025

Catch The Warnings Early

Texas Contractor Scams: Spotting the Red Flags Before You Sign.


Texas homeowners face a tough balance: you need quality work done, but the contracting world has its share of bad actors. From bait-and-switch bids to phony licenses, the scams are often clever—but preventable if you know what to look for.

The short version

  • Top scams: Lowball estimates that balloon later, fake credentials, substandard substitutions, “extra repairs,” or heavy upfront payment demands.
  • Key laws: The Texas Deceptive Trade Practices Act (DTPA) bans false or misleading sales. It’s also illegal to waive an insurance deductible, and homestead jobs have strict lien contract rules.
  • Protect yourself: Verify licenses, insist on detailed written scopes, tie payments to milestones, and keep meticulous records.
The most common contractor scams in Texas
1. Fake or overstated licenses
Contractors may flash numbers that don’t exist—or belong to someone else. Always verify electricians and HVAC with the Texas Department of Licensing and Regulation (TDLR), and plumbers with the Texas State Board of Plumbing Examiners (TSBPE).
2. Bait-and-switch pricing
You sign a “great deal,” then mid-project the price skyrockets with “unforeseen add-ons.” Under the DTPA, that’s deceptive. Protect yourself with a written scope that locks in labor, materials, and allowances upfront.
3. Substandard materials
You’re billed for premium—but receive bargain-bin. Ask for invoices with SKUs, brand names, and warranty info before work begins.
4. Surprise upsells
Some crews recommend unnecessary “repairs” without evidence. Demand photos, diagnostic reports, and a written rationale before approving extras.
5. Payment games & liens
Large upfront deposits, or “sign now” financing through the contractor, put you at risk. Missed payments—even ones you dispute—can trigger mechanic’s liens on your home.

Texas rules that matter
  • DTPA: Misrepresentations, bait-and-switch, and fake licenses are illegal.
  • Deductible waivers: It’s illegal for a contractor to waive or rebate your insurance deductible.
  • Homestead rules: Jobs over $5,000 require specific contract language and a construction account; liens on homesteads have strict legal requirements.

A safer way to hire in Texas
  1. Verify first. Always check licenses and insurance—don’t just take a card at face value.
  2. Demand detail. One written page listing demo, materials, trades, inspections, cleanup, and exclusions.
  3. Compare apples to apples. Get three bids with matching scopes and SKUs.
  4. Pay by progress. Tie payments to milestones and inspections—not promises.
  5. Lock in lien protection. Collect lien waivers at each stage, final unconditional at completion.
Red flags—walk away if you see them
  • “Today only” deals or leftover material pitches.
  • Deductible waivers (illegal).
  • No license, no insurance, no permits in writing.
  • Blank or one-page contracts with vague promises.

How TradeCrews helps protect you
  • Property Journal: Upload and organize past invoices, photos, permits, and inspection records. When you send bid requests, export a clean packet so contractors can’t claim “surprises.”
  • Jack Report™: Get a property summary of recent work, risks, and system conditions. Use it to compare bids and spot inflated or duplicate “extras.”
Final thought
Contractor scams in Texas aren’t rare—but they are avoidable. With the right checks, documentation, and tools, you can hire with confidence and stop fraud before it starts.
👉 When you’re ready to take control of your home projects, sign up free at TradeCrews.com
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