203Ks, Home Additions, Finished Basements and Whole-House Renovation Jobs

Undertaking a remodeling project -- especially a large one -- can be overwhelming. For most people, it's a new experience, it's one of the biggest purchases they'll ever make, and they find themselves dependent on people who know far more about the process than they do. This can be very uncomfortable.

The idea of this blog series is to give you the "inside track" on home-remodeling projects, so you have the information you need to make yours a success. It doesn't matter whether you are interested in a room addition, a whole-house renovation, a finished basement or a new kitchen and bath. It also doesn't matter whether you are paying for the project with cash, or financing it with a 203k, conventional or other renovation loan. This series will help you understand what to expect, what to avoid, how the process works, and what kind of contractor will best fit your needs.

With a nod to David Letterman, let's start things off with the Top 10 Problems Homeowners Face in Remodeling Projects.

10. Living in Chaos - If you are planning on living at your home while work is being completed, plan for chaos. Construction is messy and noisy and will completely disrupt your life while it is going on. Most construction trades like to start early in the morning, so you will have workmen in your home joining you for your morning coffee. At times during construction, you will probably have to live without certain utilities for a short while, and there may even be periods during which it makes sense to relocate to a local hotel.

9. Becoming Overwhelmed by the Process - Whether or not you hire someone else to manage your work, you'll probably find that your home improvement project takes more of your time than you expect. And, the demands on your time are often urgent, because delays on your part will ripple into project delays. Sometimes, all these decisions can paralyze homeowners -- especially those that don't enjoy decision-making -- and can bring a project to a complete halt.

8. Inability to Visualize the Finished Work - Many homeowners have a hard time visualizing what their project will look like when it is completed. While you may get to see a floor plan of the finished work and samples of the materials to be used as finishes, this is not always enough. Homeowners sometimes find themselves disappointed at the end of a project when the reality doesn't match up to the vision they had in their minds.

7. Unrealistic Expectations of Work - Some homeowners don't understand that the work specifically identified in their construction contract (the scope) is the limit of the work that their contractor is planning to deliver. They look at the document as a starting point and think that they can make changes as they go along just because the construction company has workers and materials on site. In fact, changes during the construction process are more expensive than work contracted in advance, since these changes often require delays, expedited fees for materials, more coordination time from the contractor and inconvenience.

6. Third Party Control - You and your contractor do not control the entire remodeling process. During the project, you will have to deal with a number of players that don't necessarily share your sense of urgency. Unless your project is very small, it will require building permits -- which will be issued by local authorities on their own schedule. Compliance with local building codes is overseen by building inspectors, who have liberal control of the process - including when they visit your site and what they approve. Often, local utility companies must participate in your project as well, and as powerful monopolies, they set the rules for how you have to work with them.

5. Contractor Cashflow - In order to keep work moving on your project, materials must be ordered and subcontractors paid regularly. If your contractor does not have enough working capital (through your payments, its own lines of credit and its own funds), then work can move slowly or stop. Because timing of draw payments is impacted by many factors beyond the contractor's control -- inspections, bank processing and lead-times on materials -- even well-run companies can run into cash flow issues from time to time.

4. Discoveries - Issues often come up during the construction process that neither the homeowner nor the contractor expected. These can include structural defects in the building, inadequacy of existing utilities or environmental problems, such as mold, lead, asbestos or termites. These all add unplanned costs and time. Discoveries can really derail a project if the contingency in the budget or the schedule is too small to address the problems identified (see Insufficient Budget and Project Delays).

3. Project Delays - Project delays seem inevitable in home remodeling jobs, and it's not ALWAYS the contractor's fault. Part of the problem is that unlike the construction of a new home -- which is fairly predictable -- renovations require work to existing buildings that have problems which cannot be seen until walls and floors are opened (see Discoveries). Then, solutions have to be developed on site to handle these challenges. You should expect changes to whatever schedule is established up front.

2. Insufficient Budget - Sometimes, homeowners don't have enough money available to do all the work that really NEEDS to be done for a project. So, critical items must be cut from the scope in order to get the project to fit the budget. Since most projects grow in scope as they go along, starting out with little or no cushion creates problems down the line. What happens when a cracked sewer line is discovered? What happens when a beam is needed to stabilize the building?

1. Unqualified Contractors - You are trusting your contractors to be your construction experts. What if they're not? Especially in these tough economic times, many contractors are accepting any kind of work they can find -- even if they are not very good at it. Using an unqualified contractor for your project can result in project delays, cost overruns and shoddy workmanship. Worse still, an unqualified contract may ultimately walk off your job completely, leaving you with work half-done and bills unpaid. Choosing an unqualified contractor is the #1 problem homeowners face when taking on a home remodeling project.

NEXT: In the posts that follow, we'll explain exactly what you can do to avoid as many of these problems as possible, and what to do to handle the ones that do occur

 

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Joey Yaffe
joey@newcitycompanies.com

14440 Cherry Lane Court, Suite 218, Laurel, MD 20707
Office: 443-899-9300   Web: www.NewCityCompanies.com

New City Construction is a different kind of residential remodeling company, licensed in Maryland and Washington, DC. 

Our Specialty: Complex projects, such as full-gut rehabs, large additions, whole-house remodeling jobs and multifamily buildings.

Our Competitive Edge: A unique background in strategy, project planning and management, so we can handle all your complications, such as permitting, short construction timetables, structural problems, historic requirements, lead, asbestos and mold. We often complete projects after other contractors fail.

Our Obsession: A great client experience from beginning to end. Your renovation project should be a rewarding experience, not a painful one.