Those are signs that you should walk away. Sometimes these con artists will also try to get you to borrow from a company that they recommend. At the extreme, a home loan scam could leave you homeless.
There are a few key steps that you should take to avoid being taken advantage of. Interview your prospective contractors thoroughly. The FTC suggests that you ask about the length of time they have been doing business, their license details, and insurance. Check with the permit office to find out what you need to know about applicable permit laws. You might even be able to get a tip from someone in the office.
Another important tip is asking for references. Not only should you collect a list, but you should check. Ask the people about the quality of the job and service.
Payment terms must be clear before the job begins. In some jurisdictions there are limits on how much higher the actual cost of a project is allowed to be from the contract estimated cost. Check into the laws where your work will be done.