There is no 100% guaranteed way to avoid a bad contractor, but there are things you can do to help yourself find a good contractor. The following are warning signs of contractors to avoid:
100% Downpayment. Good contractors ask for a partial downpayment, but watch out for contractors who require 100% up front, or downpayment made directly to the sales person, as opposed to their building company.
Few or No References: Good contractors should be able to refer several happy customers.
No Contractor's License: Al contractors are required by law to have and maintain their license. Be sure to confirm this information.
No Proof of Insurance: The law required contractors to have insurance. If the contractor has no insurance, homeowners can be liable for accidents that occur on the job - even ones that harm the contractor!
No permanent address for business: Most reputable contractors have a permanent address for their company.
The Bid Seems Too Low ... way to low! Be sure to compare apples with apples by insisting each contractor bids on the exact same work. Many times the "lowest bid" costs more in the long run.
Complaints to the Better Business Bureau: Even the best contractors can have people file complaints. The smart consumer will find out how the complaints were resolved.
Bad Accounts with Suppliers: Most problems with contractors revolve around their business practices, not their building abilities. A contractor's suppliers and banks can be a good source to verify solid business practices.