Expert Advice

The Contract | Getting Competitive Bids | Remodeling vs. New Construction

The Contract

Since a written contract protects both you and the contractor, put all agreements in writing. Get all oral promises in writing and spell out exactly what the contractor will and will not do. If you intend to do some of the work yourself or hire another contractor to do it, write this into the contract as well.

Never sign a blank or partially blank contract. Both you and the contractor are bound by everything set down in the contract, so read it carefully before you sign. If you have any questions or do not understand something, ask before you sign. Get a copy of the contract as soon as you sign it and keep it for your records.

Be sure the financial terms of the contract are clear. The contract should include the total price, when payments will be made, and whether there is a cancellation penalty. On any home improvement job, you should expect to make a downpayment representing approximately one-third of the total contract price. The amount may be limited by state or local laws. Except for the downpayment, you should avoid making payments for work that has not yet been completed. Instead, schedule additional payments at weekly or monthly intervals or after completion of each phase of the project.

When you sign a home improvement contract in your home and in the presence of the contractor or contractor's representative, you usually have three working days to change your mind and cancel the contract. The contractor or contractor's representative must inform you about your cancellation rights orally and in writing and provide the forms to use for canceling. If you need emergency repairs, you can waive your three-day cancellation rights. This waiver is important because contractors generally wait until the end of the "cooling-off" period before starting work.

The contract should specify all materials to be used, such as the quality, quantity, weight, color, size, or brand name as it may apply. For example. The contract should say "install oak kitchen cabinets, manufactured by Company XYZ model 0381A, as per the plan," not just "install kitchen cabinets."

Getting Competitive Bids

A wise consumer shops for a reputable builder who works with him and understands his needs. Getting competitive bids is customary as it will help you the consumer make the best transaction. You must be sure to seek bids only from reputable builders. Irresponsible builders sometimes present a bid that is usually low, then claim it does not cover part of the work. If you use competitive bidding, you must have a complete set of plans and specifications prepared by a professional designer/builder or architect. Having these as the basis for the bid will assure the work is aimed toward the results you are seeking and also act as a basis against which work progress and materials used may be checked.

"THE LOWEST BIDDER"
It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money-that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the job it was bought to do. The common law of business balance prohibits paying a little and getting a lot-it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and, if you do that, you will have enough to pay for something better.
-- John Ruskin Author - Economist 1819-1900

Remodeling vs. Construction

Why does remodeling cost more than new construction?

The costs for repair and remodeling work must be modified due to the following factors that may be present in any given repair and remodeling project:

Equipment usage curtailment due to the physical limitations of the project, with only hand operated equipment being used.
Increased requirement for shoring and bracing to hold up the building while structural changes are being made and to allow for temporary storage of construction materials on above-grade floors.
Material handling becomes more costly due to having to move within the confines of an enclosed building. For multi-story construction, low capacity elevators and stairwells may be the only access to upper floors.
Large amount of cutting and patching and attempting to match the existing construction is required. It is often more economical to remove entire walls rather than create many new door and window openings. This sort of trade-off has to be carefully analyzed.
Cost of protection of completed work is increased since the usual sequence of construction usually cannot be accomplished.
Economies of scale usually associated with new construction may not be present. If small quantities of components must be custom fabricated due to job requirements, unit costs will naturally increase. Also, if only small work areas are available at a given time, job schedul- ing between trades becomes difficult and subcontractor quotations may reflect the excessive start-up and shut-down phases of the job.
Work may have to be done on other than normal shifts and may have to be done around and existing production facility which has to stay in production during the course of the repair and remodeling.
Dust and noise protection of adjoining non-construction areas can involve substantial special protection and alter usual construction methods.
Job may be delayed due to unexpected conditions discovered during demolition or removal. These delays ultimately increase construction costs.
Piping and ductwork runs may not be as simple as for new construc- tion. Wiring may have to be snaked through walls and floors.
Matching "existing construction" may be impossible because materials may no longer be manufactured. Substitutions may be expensive.
Weather protection of existing structure requires additional temporary structures to protect building at opening.
On small projects, because of local conditions, it may be necessary to pay a tradesman for a minimum of four hours for a task that is completed in one hour.

All of the above areas can contribute to increased costs for a repair and remodeling project. Each of the above factors should be considered in the planning, bidding and construction stage in order to minimize the increased costs associated with repair and remodeling jobs.