By Megan Wild, author of Your Wild Home blog
Remodeling your home can be an exciting project that leaves you with the new areas you’ve been dreaming about. However, you’ve probably realized as you’ve been looking and planning that remodeling stories are full of what we’ll call The Remodel That Ran Away With the Costs stories as well.
Cost overruns in remodeling can in fact occur. Many factors are responsible. Perhaps the contractors unearth unforeseen problems during the construction, such as dry rots or pests. Construction needs to stop to deal with the problems, which costs more time and money. Sometimes homeowners plan a kitchen with new cabinets and appliances and then want a new floor. Sadly, sometimes contractors end up overcharging for materials.
The answer to cost overrun stories is to manage your remodel actively. Costs of a remodel can be controlled in many ways. Here are some tips on how best to effect cost control.
1. Plan Out Your Scope and Stick to It
If you’re like most homeowners, you probably have a list of what you want to achieve in a remodel. The first key to managing costs effectively is to plan out what you want and stick to it. While you may have to repair the unforeseen problems, such as dry rot, cost overruns caused by suddenly realizing your kitchen floor looks too dated next to the new cabinets and appliances can be curtailed by planning the scope of the remodel. If it doesn’t include a floor, don’t do it.
It’s a good idea to sit down and make a list of everything you’d like to have in a remodel. Let it sit for a few days. Come back and make a second list: the things you must have. If you need new bathroom fixtures because the old ones are leaking, for example, fixtures go on your list of must-haves. A new shower? You’d like to have it, but it’s not essential.
2. Get Recommendations for Contractors
Don’t choose a contractor blindly. It’s crucial to get one who does good work, is reliable and will discuss costs openly with you. A less than upstanding contractor can cause overruns by their business practices. Roughly 24 percent, for example, overcharge the cost of materials. An inexperienced contractor can make rookie mistakes that will hit your pocketbook.
Ask friends, relatives and neighbors for names of people they’ve used and were happy with. Choose three, and ask each for references.
3. Obtain Bids From Contractors
Once you have three contractors, obtain bids on your project from each. It’s a good idea to do some research so you have some idea of what remodels cost. They should be able to give you a line-item breakdown both for materials and labor.
Review each bid carefully. At this point, you might realize that your “must have/would like to have” list needs modification. If the bids are significantly over your budget, you might have to pare the remodel down. If you have cash to spare, time to move some “would like to have” items over to the “must-have” column!
4. Finalize Your Budget
It’s time to finalize your budget, in three stages. First, go over the bids. Be sure to add a cash cushion to be realistic. You should plan for at least 20 percent extra. Although you want to manage cost creep in your remodel, cost overruns are a fact of life in construction. You want to keep them to a minimum. Always negotiate the bids you’re given — professional contractors expect it.
Second, choose your contractor. Don’t necessarily pick the lowest price. Experience in your type of house, strength of recommendations and personal rapport all matter.
Third, once you’ve chosen your contractor, ask for a contract. The contract should specify price and timing. If you are facing a large remodel, negotiate payment by goal, in increments. If you are remodeling an entire bathroom, for example, the first installment might be the sinks, the second the bathtub and the third the floors.
5. Choose the Right Time of Year
Weather can be a wildcard in any remodel. Inclement and cold weather can make remodels come to a halt, especially of an exterior or of any redo requiring outdoor access. Spring and summer are peak remodeling times simply because less severe weather is good for both the time and budget of your remodeling.
Work with your contractor to choose the optimal time that will get your project done on time and within your budget.
6. Modify the Materials if Necessary
If the budget comes in too high, or legitimate cost creeps hike your budget, consider modifying the materials in your remodel. Many relatively inexpensive materials can be substituted for costly materials with no sacrifice of quality or aesthetics. Eucalyptus, for example, can be constructed to look like rich mahogany, at roughly half the price.
While remodeling your home can be a dream project, it can also be a costly one. These six tips can help you contain the costs of your remodel.