Every year, millions of Americans improve their homes. Whether it is building a new home, adding an addition, or remodeling a kitchen or bath, improving your house is an expensive proposition. In fact in 2017 in the U.S., homeowners spent over $550 billion dollars building, remodeling and improving their homes, with projects ranging from a few thousand to hundreds of thousands of dollars, and even millions of dollars. For home improvement, roughly 85% of these costs on average over the past five years are paid to contractors. Yet, when hiring this work, many people will do less research than they will if buying a new car, TV or smartphone.
So we offer you the following eight points born from over 33 years in the business of building and remodeling homes. These words of advice seem so obvious, but are often forgotten and quickly neglected in the excitement and rush to get the project going.
- Set An Unrealistic Budget
If I could identify the one mistake that has caused most of the problems we have seen in the building and remodeling industry, it is this one. Trying to do too much on too little, causes you to believe the contractor who says “sure you can do all this work for an unrealistically low price”!! I guess it goes back to the old saying “If the price is too good to be true it probably is.” Any good builder or remodeler can at least give you a ballpark price for the cost of your project. You run the risk of being taken by a con artist when they quote you a low price or they will run out of money before your project is complete. Thru the years we have seen many people get burned by the low price contractor; they either go out of business and/or disappear during the project and leave a mess of poor quality workmanship and mechanical liens filed against your home.
David & Goliath
- Don’t Ask For References and/or See Previous Work
Would you hire a babysitter, a cleaning person, a cardiologist or a portfolio manager without a reference? NO. NO. NO. and NO. Then why do homeowners consistently spend enormous amounts of money on home repair or building projects without getting a reference and/or seeing a contractor’s previous work before hiring them? You are not being rude by asking for these things. You’re not insulting the contractor. You’re being smart.
- Try to Get More Than One Bid
The popular wisdom regarding bids is to get at least two and throw out highest bid and then go with the lowest one. That’s excellent advice and fine in theory. But shopping your project on price alone is a big mistake. It is also impossible to get apples to apples comparison unless you have each contractor bidding the same design and same set of building specifications. When people are getting multiple bids, what we see come thru the door is incomplete information so there is no way they are going to get each contractor bidding the same thing. What materials are being bid can vary the price significantly and if the plans are incomplete and not detailed enough you are letting the contractor make assumptions. It is unwise to pay too much, but it is worse to pay too little. Your house is your largest investment—make sure you protect its value. After all, when you pay too much you lose a little money, that’s all. When you pay to little, you could decrease the value of your home. The common law of business prohibits paying a little and getting a lot – it can’t be done! Remember you always get what you pay for. Find a contractor you can trust and work with, one that is reliable, dependable and stable. Instead of trying to compare bids, do your homework. There is no magic to this business we all use the same suppliers and subcontractors. Good and reputable contractors will be priced very similar to each other!
- Don’t Get a Written Contract or Estimate
This piece of advice sounds like a no-brainer, doesn’t it? But both David and I have volunteered for dispute resolution committees at the builders association as well as the remodeling association. The number one reason people end up in a dispute with a building contractor is that they either didn’t get a written contract or estimate or the one they got and signed had no details. So essentially they were signing for the price, but they had no idea what they were receiving for that price! Even when changes are made to your project, a reputable contractor will put the change in writing with specific details. A written contract will not only spell out the price, but it will also have a building plan or blueprint attached, it will define payment terms and how long the project will take and it will have a very detailed scope of work or building specification attached that includes model numbers and the brand of materials being used.
- Don’t Get Written Time Frames or Deadlines
This advice goes hand and hand with #4 above. Always sign a detailed construction contract that spells out all the terms and conditions of your project including how long it will take.
- Don’t Get Lien Waivers
The State of Wisconsin has a very specific Mechanical Lien Law that every reputable contractor must follow. This law must be spelled out in the building construction contract you sign. A reputable contractor will obtain all lien waivers for your project and give them to you at the end or give them to the title company that is dispersing the money for your project.
- Don’t Have a Clear Plan or Understanding of What You Are Getting
There are many people involved in a building project, so the MAIN tools of communication are very important. The materials suppliers as we well as the subcontractor need a clear and detailed building plan along with a detailed specification document. A home building or remodeling project will only be as good as these documents. Communication is key when building a new home or remodeling an existing home and these documents are the first part of the communication process!
- Don’t Communicate with Your Contractor
Besides the written documents being an important and key part of the communication process when building or remodeling your home, verbal communication is second. In fact, the lack of communication is one of the main reason disputes occur during the building process. Wisconsin felt that this topic was so important; they passed a law called the “Right to Cure Law”. When you read this law it seems like common sense. The “Right to Cure Law” simply defines a communication process with your building contractor. What you need to do during the process and what rights the contractor has. The first right a contractor has is to rectify whatever you are unhappy about, you cannot just go out and hire another contractor to fix what you deem to be a mistake or defect in your project. You must first communicate in writing with your building contractor about the issue and give them the opportunity to rectify the situation. Communication is key in any relationship and especially during a building project!
Do your homework! Find a home builder or remodeling contractor you can trust and work with, one that is reliable, dependable and stable. Instead of trying to compare bids, do your homework up front! Look for a company that is properly licensed, make sure they are members of a professional trade association, ask to look at their work, ask for references, and make sure the plan and specification documents are detailed. Look for a contractor that provides additional services like design, help with material selections, have good product knowledge and they are certified, professionals. Ask if they use only subcontractors or do they have employees that perform the work. Most importantly make sure you are comfortable with the people you are working with! Remember, the best relationships are built on trust and mutual respect – NOT PRICE!
David & Goliath Builders are the #1 Home Building & Remodeling Team in Southeastern Wisconsin. They are featured every Saturday morning on the Home Building & Remodeling television show Builders Showcase which airs on FOX 6.
