Avoid These Remodeling Mistakes
We all make mistakes in life. Usually, they are minor, and we can move on with little damage to ourselves, our property and our loved ones. But renovation mistakes can harm all three. Let’s take a look at a recent call to our office that raises red flags for renovation mistakes to come.
An e-mail came in to our office from a young couple with a small 3-bedroom, 1-bathroom city house. The homeowners had lived in the house for 3 years and said they were ready to begin gutting and renovating the house. Sounded like it could be an exciting project. I asked some questions to learn some more about what was being planned. Here’s what I found:
1. They intended on living in the home while renovations were underway. (This is a recipe for discomfort, at minimum. In fact, many a marriage has crumbled under this kind of stress. Paying for a short-term rental is much easier and more comfortable for homeowners undertaking a major home renovation.)
2. The renovations would include every room of the house, including the single bathroom and their bedroom. (Where would they sleep or go to use the toilet or shower?)
3. They would not disclose their budget, although they admitted they knew exactly what they could afford to spend, given that they were going to use a 203K mortgage. The mortgage was an amount fixed by predicted value of the home after renovations and their income. Unless you have unlimited dollars (and who does these days?) a fixed budget means a fixed range of what can be done with those dollars.
4. The time frame was tight. They needed contractual pricing documents ready to take to the bank in 3 business days, and they needed the project to begin in less than 6 weeks. That was because they wanted to lock in their mortgage rate, and they would begin paying interest as soon as they closed on it. (FYI: permits take a few weeks on a project like this.)
5. Despite requiring a legal document from our company to present to their bank in only 3 days to secure their loan and gain approval from the bank for us to work with them, these homeowners preferred not to pay for our time. (Generally, it takes 30-40 hours to carefully price a larger renovation like this.)
6. These clients refused to admit that, perhaps, their design might exceed their planned budget, and that redrafting/repricing might be required to get the project in line with their budget. We typically conduct these pricing and redesigning services under our Project Development Agreement, and we bill at a very reasonable $90/hour for our time.
In the end, this couple decided to work with another contractor who agreed to prepare pricing and legal docs for them for free in the given time period and at the mysterious target budget they would not share. In situations like these, we are OK with losing a potential new client, as this is not a match for the way we conduct business. We could see that this is a remodeling mistake just waiting to happen.