These 8 Red Flags Will Help You Spot a Bad Basement Remodeler

Lawrence Bonk
Written by Lawrence Bonk
Updated January 3, 2022
A recently renovated basement
Photo: Anatoli Igolkin / iStock / Getty Images Plus / Getty Images


  • Basement remodeling and refinishing is serious work best left to pros.

  • Skip contractors that are not insured, licensed, and bonded. 

  • Be wary of technicians that can start right away or want to skip building permits. 

  • Average your bid estimates and pay attention to prices that seem too low or too high. 

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If you love having a private space for relaxation, privacy, or hobbies, nothing beats a remodeled and furnished basement. A basement renovation project can transform a dark and dank portion of your home into a spare bedroom, a gaming room, a music studio, or more. 

Why Remodel a Basement?

A basement with a rec room area
Photo: PC Photography / iStock / Getty Images Plus / Getty Images

Before tackling the warning signs of a bad basement remodeler, it’s worth going over why you should hire a pro to finish a basement. The project involves work with windows, gas lines, and even the architectural frame of the home—so it’s a big job that requires the right skills and tools. 

Remodeling a basement costs between $3,500 and $34,000, depending on the size and specific needs, so it’s worth investing in a pro who knows what they’re doing. 

Here are some warning signs to help you avoid sketchy basement contractors.

1. Warning Sign: They Will Work Without Permits

It’s a major red flag if a basement remodeler is willing to do the job without getting the appropriate permits—especially if you’re installing a bathroom and plumbing lines. Nixing these permits saves a few bucks, sure, but if anything goes wrong down the line you could end up in hot water with your city, county, or state. Permits keep people safe and encourage quality work that adheres to local rules and regulations. Besides, if they are so willing to eschew building permits, what other shortcuts will they take? 

2. Warning Sign: They Lack Appropriate Licensure 

Just like building permits, work licenses are an absolute must when it comes to basement remodeling or, really, just about any job. Licenses indicate that the contractor has packed away plenty of experience, so they’ll know what to do when encountering obstacles. These licenses renew at regular intervals and typically require the contractor to receive passing marks on tests and to keep abreast of the latest trends in the industry. 

3. Warning Sign: They Aren’t Bonded or Insured 

If your pro lacks liability insurance, sufficient bonding, or worker’s compensation, you open yourself up to all kinds of problems. What happens if they damage your property or, even your neighbor’s property? What happens if one of their technicians injures themselves in your basement while working? What are your options if their work falls short? Without the proper insurance, you may be liable in any of the aforementioned scenarios. Protect yourself by double-checking your contractor’s insurance status.

4. Warning Sign: They Can Start Immediately 

This may initially seem like great news, but the truth is that experienced contractors are typically booked out for months. If your pro says they’ll start tomorrow, that means they don’t have any customers lined up. A lack of customers could be random chance, or they could simply be a new company, but it could also be due to the quality of their work. Choosing an experiencing contractor with a backlog will force you to be patient, but the end results will be worth the wait. 

5. Warning Sign: They Charge Too Much or Too Little 

When collecting bids, pay attention to the average cost and flag any estimates that seem too low or too high. If the bid is less expensive than everyone else, it could indicate shoddy workmanship with plenty of shortcuts or hidden costs that pop up later. If the bid is more expensive than everyone else, you’ll end up paying a premium for services in line with more affordable contractors. 

6. Warning Sign: They Ask for a Huge Down Payment 

Contractors require some form of down payment to buy materials and hire sub-contractors. However, if they ask for a considerable amount of money for this down payment it is a big warning sign. Pass on any contractor asking for more than 50% of the total project cost without a justifiable reason. They are likely incompetent or looking to amass money ahead of any complaints you’ll have with the work. 

7. Warning Sign: They Have Tons of Negative Reviews

One or two negative reviews from customers aren’t unusual even for the best of contractors. But if a contractor’s social media pages burst at the seams with negative reviews, it’s a major red flag. You can try to contact one or two of the unhappy customers to ask about their experience with the contractor—and be sure to ask your pro the reasons behind all of the negativity. Otherwise, you may be the next customer leaving a bad review.

8. Warning Sign: They Communicate Poorly 

At the end of the day, it’s your basement remodel and your ideas reign supreme. However, you are (probably) not an experienced contractor, so a qualified pro should offer insight into how to pull off your dream basement and let you know when something is unlikely to work. If your contractor doesn’t offer insight into the process or is not brimming with suggestions and advice, this is a major warning sign. They should respect your opinion, but be confident enough to speak up about potential issues. 

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