Confessions of a Home Remodeler: 11 Things to Know Before You Spend
This article originally appeared on GOBankingRates.com: Confessions of a Home Remodeler: 11 Things to Know Before You Spend
My husband and I have been homeowners for about 15 years. However, we didn’t tackle our first home remodeling project until last year. And it was quite the project.
We renovated almost an entire floor in our house ― including a bathroom, bedroom, TV room and screened-in porch that we converted into a four-season sunroom. For the most part, it went well. But we certainly learned a lot during our remodeling project ― things we did right and things we wished we had known before we started.
If you’re thinking about renovating, read these home remodeling tips before you start to ensure your project goes well.
Have a Budget
Just as you need to figure out how much house you can afford before you start looking for a new home, you need to figure out how much you can afford to spend on a remodeling project. If you don’t, it’s easy to get carried away and create a strain on your finances.
Your remodeling budget might be determined by how much equity you have in your home if you plan on getting a home equity loan or line of credit to finance the project. So you need to know how much you can borrow.
Be aware that you won’t have access to 100 percent of your home’s equity. For example, if your house is worth $200,000 and you owe $100,000 on your mortgage, you won’t be able to borrow the entire $100,000 in equity that you have. The amount you can borrow is typically limited to 85 percent of the equity in your home minus what you owe on your mortgage. So 85 percent of a $200,000 home is $170,000 minus the $100,000 still owed on the mortgage, which leaves you access to $70,000.
Be Willing to Make Compromises
To avoid blowing your budget, you might need to make compromises on your remodeling project. We certainly did.
We asked the contractor we decided to work with to give us estimates for a couple of different options. Then, we tweaked and tweaked until we got the cost down below the total we were willing to spend.
For example, we wanted to convert a screened-in porch into a room we could use year-round. But rather than connect it to our existing heating and cooling system, we kept down the cost by installing a ductless heating and cooling unit on one of the exterior walls.
Shop Around for the Best Financing
An easy way to save money on a home remodeling project is to shop around for the best interest rate on a home equity loan or line of credit because it could save you thousands of dollars. The bank that provided our mortgage didn’t offer the best terms for a home equity loan or line of credit. By shopping around, my husband and I found another bank that gave us access to more of our home equity ― 89.9 percent ― and a lower rate.
Because my husband and I have excellent credit scores above 800, we qualified for the bank’s lowest rate. It can be worth delaying a remodeling project to improve your credit score to get a lower rate on a home equity loan or line of credit.
Be Clear About What You Want
Before you invite contractors to your home to give you estimates, know what you want. Of course, a good contractor should be able to offer suggestions or ways to improve upon your home remodeling ideas. But you don’t want to waste a contractor’s time by having only a vague idea of what you want or by changing your mind throughout the project. We typed up a detailed list and found pictures of what we wanted before meeting with contractors.
Knowing what you want will help you get the most accurate estimates from contractors and will help avoid delays during your remodel. If you need help planning your project, consider working with an interior designer.
Decide Whether You Want a General Contractor
If you want a professional to handle your home remodeling, you can hire a general contractor to oversee the entire project or hire subcontractors directly to tackle each phase of the project. The benefit of hiring general contractors is that they know which subcontractors are reliable or have their own team. Plus, they can manage the workflow.
Trust me, if this is your first remodeling project, you likely won’t know at which stage you need each subcontractor, such as the carpenter, electrician or plumber. So hiring a general contractor can be a smart move. But be aware that general contractors charge a fee on top of labor and materials ― typically a percentage of the total cost.
Get Quotes From Several Contractors
Just as you should shop around for the best financing, you should shop around to find the best contractor for your project. That doesn’t necessarily mean you should hire the cheapest. That actually could be a red flag if the estimate is dramatically lower than other contractors’ estimates.
Get recommendations from friends for contractors and check out projects they’ve completed to get an idea of the quality of work they do. Ask contractors for detailed estimates for your project ― not ballpark estimates, which could be way off from the final project cost.
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Get a Detailed Contract in Writing
Don’t start a home remodeling project without a detailed contract. With a contract, there will be no question about the scope of work or the amount you’re expected to pay. It should specify all the work that is to be done and materials to be used, the total cost of the project, when payments are due and approximate project dates.
It also should give you some protection, such as a right to rescind (get out of) the contract within a certain number of days and a warranty if there are defects in the work. And, of course, it should be signed by both you and the contractor.
Don’t Be Afraid to Ask Questions
The problem for first-time remodelers is that you don’t know what you don’t know. So it can be difficult knowing what questions to ask. Be sure to ask your contractor to explain anything that isn’t 100 percent clear.
We made this mistake while emailing back and forth with our contractor about the type of door we wanted installed on the porch that was being converted into a room. We didn’t ask enough specifics about what he was ordering, and the wrong type of door showed up. So he ordered a new one ― fortunately, at no additional cost to us.
Be Prepared for Setbacks and Extra Costs
If you’ve ever watched “Fixer Upper” or other home remodeling TV shows, you’ve seen episodes where they encounter something unexpected ― water damage, termites, unsafe wiring and so on. Any remodeling project could run into a similar situation that will increase its cost or delay its completion.
We had a couple of setbacks, and our project ended up taking longer than I expected. Fortunately, though, we stayed within our budget. But it’s a good idea to have extra money to cover any unexpected remodeling costs ― and to have a lot of patience when there are setbacks.
Save Money by Doing Some Work Yourself
We left all of the heavy lifting to our contractor. But we saved more than $4,000 by agreeing to do one aspect of the project ourselves ― the painting. It can be tedious, but painting is something most homeowners should be able to tackle on their own to keep down the cost of remodeling.
Depending on your skill level, there might be other aspects of a remodeling project where you can pitch in; the contractor will cut the project cost estimate accordingly.
Keep Reading: Increase Your Home’s Value With These 7 DIY Remodeling Projects
Expect Your House to Become a Disaster Area
We remodeled one floor, but our entire home was impacted. Dust spread throughout the house. The noise of hammers and saws was pretty much constant. Workers had to trek through the part of the house that wasn’t under construction to use the bathroom. And I couldn’t park my car in the garage because construction materials were stored in there.
If you stay in your home during a remodeling project, expect your life to be at least somewhat disrupted. If you’re remodeling a kitchen, make sure you can create an auxiliary kitchen or have money in your budget to eat out frequently. And consider renting a port-a-potty for workers so they don’t track dust and dirt into your bathroom.
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