How do I avoid risks and scams with PACE loans?
Be on alert when talking to salespeople and contractors. Doing some research before you sign up and a contractor begins work can help you avoid the risk of a surprise bill, shoddy work- or even a scam!
Determine whether PACE financing is the right option for you
As with any financing option, you may want to research and explore whether PACE is the best option for you before you sign up for anything or a contractor begins work.
Get contracts and estimates in writing- in your language. Sometimes PACE salespeople offer to sign you up by e-mail, e-sign software, or come with no paper contracts that highlight the terms and conditions. Ask for a written estimate of the services, including a list of each service and charge, and a calculation of your assessment costs and fees if you prefer paper estimates. If the salesperson or contractor isn’t willing to do that, take it as a red flag. They may not be who you want to work with. Also, if English isn’t your first language, ask for the contracts and estimates in your language. Take the time to read the details and ask questions before signing anything. If necessary, have an attorney or trusted family member review it. Have the salesperson or contractor answer all your questions before signing up.
Look for alternatives. You may have other options to finance home improvements- it’s a great opportunity to shop around for deals. If you have a mortgage loan on your property, it’s important to discuss financing options with your lender or servicer. They may be able to offer options like a Home Equity Line of Credit, or refinancing programs. You may be able to get a deal through your local home improvement store on purchase and installation. Check with your local utility providers for energy incentives or grants that may be available. If you need financial assistance, you may qualify for free energy efficiency improvements through the federal Weatherization Assistance Program .
Do you need the work? Always get multiple contractor quotes or opinions.
PACE loans are often sold door-to-door by contractors or other salespeople. Don’t just rely on what the contractor or salesperson tells you- make sure you get a second opinion from contractors you trust, or that come highly recommended. It’s a good idea to make sure you understand the upgrades, how they are installed on your property, the impact on the environment, and your wallet. Ask a neighbor or look up product reviews. Find a neutral third party to do an energy audit to see if the energy savings that some contractors may promise are accurate.
Choose a contractor you trust.
You have the right to choose a contractor you’re comfortable with before you sign any papers, or they begin the work. If you do research before you sign up, it may help you avoid problems down the road and protect yourself from scammers.
Find out more. Always ask salespeople for their name, their company name, and references. Reach out to their references and research their company. Reach out to trusted family, neighbors, and friends to find out information about the company’s reputation.
Trust your gut- it may save you from a scam.
Unfortunately, there are some people who will try to defraud unsuspecting homeowners. Being aware of signs of scammers can go a long way in protecting you from money loss, identity theft, or worse. Here’s some things to watch out for.
Scare tactics: Some scammers try conning you by telling you that your home needs emergency repairs. This can be alarming, especially if the contractor implies that you have a serious home issue on your hands. If someone tells you that you need major repairs, get a second opinion.
Great deals for a limited time: Salespeople may urge you to sign up for amazing deals before it’s too late. If someone is trying to rush you into making a decision quickly, just say no. This sales tactic is common, but rarely is it true that good deals only come along once. Saying no to those sales tactics now may save you from regrets in the future. Plus, you may be able to find a great deal through another contractor who you or someone you know has worked with before and trusts.
Impersonating a trusted company or government: Some scammers may impersonate employees from your utility provider, contractors, and the government. Ask for ID or other forms of identification. If they ask to come into your home, politely refuse.
Outlandish claims: If salespeople make unbelievable claims about their products and services, ask questions. If they can’t or are unwilling to explain the details to you or provide you a written copy of the terms and conditions, or they tell you to leave the paperwork up to them, it may be a sign that it is a scam. Remember if a deal sounds too good to be true it probably is.