How Not to Renovate Your Bedroomby Darla Dernovsek
We dreamed of a master suite, but the aftermath of our home renovation project has interrupted more than one good night's sleep.
When our home renovation project began, we thought we were prepared. We had a contractor we liked and trusted, a budget that allowed for a 25% cost overrun, and a plan that would solve our closet shortage, add a second bathroom, and create a tranquil retreat for my husband and me.
Two months later, we gained a wonderful master suite, an efficient second-floor laundry area, and bills that overran the original estimates by 180%. That explains those sleepless nights.
Where did we go wrong?
Looking back, it seems clear that our relationship with the contractor was a poor foundation for extensive renovations. Choosing the right contractor is the single most important decision that homeowners make on a remodeling project, according to Paul Winans, president of the National Association of the Remodeling Industry (NARI), Des Plaines, Ill., and president and co-owner of Winans Construction, Oakland, Calif.
Winans suggests that homeowners pick their contractor to help plan their renovation, rather than waiting until after plans are complete to make their selection. Advice for selecting the right contractor is available on the NARI site and in the "resources" section of the Winans Construction site.
"This is someone who is going to be in your home for months," Winans says. "It's a relationship. You have to feel that you're making the right decision."
As survivors of multiple renovation projects, we were confident that we knew how to make that decision. We chose a local firm after checking its references and viewing its work.
Asking our new contractor, and his references, the right questions might have alerted us to the difficulties ahead. The bills overran the original estimates by 180%.
Question one: Are we talking about the same thing?
Our new contractor explained that he refuses to provide firm bids on renovation projects in old buildings like our 110-year-old farmhouse. We accepted his explanation, but asked for "worst-case scenario" estimates.
As the bills piled up, it became clear that the contractor's concept of a "worst-case scenario" cost was different than ours. We saw it as the highest figure we might be expected to pay to complete the project. He saw it as a ballpark estimate.
"Always articulate all your assumptions," Winans says. "Speak them out loud to the contractor."
Question two: Did you experience cost overruns?
Our references praised the firm's quality workmanship and friendly employees. They failed to mention cost overruns until we talked to them midway through the project, when we learned the contractor uses the best-case scenario to estimate every job. His wife calls this "his superhero complex."
Talking to references is the best way to learn whether a contractor routinely underestimates projects, either out of optimism or as a ploy to get the job. Winans suggests posing the question to references this way: "I am concerned that the price of my remodel will change a lot over the cost of the job. Tell me why this is, or is not, a concern I should have about this contractor."
Question three: Did subcontractors view the job and provide estimates?
The only subcontractor to come in under budget--the plumber--was also the only subcontractor who visited our house in advance and made a firm bid. The contractor estimated the cost of drywall, which ran almost double the estimate, and electrical work, which was more than four times the estimate.
"A good contractor will get firm proposals from all the trade contractors," Winans says. "To do this, the trade contractors should visit the site with the general contractor before they provide their proposals and before the job starts."
Question four: Can you put that in writing?
We proceeded without a written contract, a reckless step that put us at the mercy of the contractor and subcontractors. We compounded the problem when we didn't demand new drawings after it became apparent that our original plan was unworkable. The contractor's representative assured us he understood exactly what we wanted, so it seemed pushy to demand new plans. That was downright foolish. Even a simple sketch would have put the bathroom sink and the bedroom doorway in the right place the first time around.
Choosing the right contractor is the single most important decision that homeowners make about a remodeling project.
When the contractor creates a written contract backed by firm quotes from subcontractors, Winans says "surprises" in renovation projects should change the final cost only about 3% to 5%. When things go wrong, the contract specifies that the contractor will absorb any additional cost.
"If the trade contractor missed something, that does not change what you bought," Winans says. "You should not pay for the trade contractor's mistake. That is why you hired the general contractor--he is taking on all the risk regarding this issue."
Question five: What's happening?
Asking questions is part of the homeowner's job throughout the project. By chatting with the plumber, we learned we could turn a large linen closet into a laundry area at an additional cost of about $1,000. That was a piffling amount compared with the total price and the huge benefit of getting the laundry out of the basement. Asking questions also clarified other choices, especially when problems occurred.
"There will be problems," Winans says. "You are buying how your contractor responds to problems and surprises. Does he deliver solutions quickly and help you decide what the best way to proceed is?"
Paying the price
As the cost of our project grew, we demanded updates, completed some work ourselves, and acted quickly to make sure we could pay the bills. The contractor worked out a no-interest payment plan to minimize our borrowing needs. A low-cost financing offer from our credit union covered other cost overruns. Options for homeowners include home equity loans and lines of credit.
After six to eight months of saving, scrimping, and working extra hours, we expect to finish paying for our renovation overruns. That's when we'll finally enjoy some truly suite sleep in our new master bedroom.
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