Congratulations. You’ve bought the house or apartment of your dreams. Well, almost. With a little work here and there, it should be close to perfection whether you collaborate with a general contractor or supervise the work yourself.
But how you bid out the work and decide which subcontractors to hire will make all the difference between a satisfied or disappointed homeowner.
If your project is of a considerable size, such as a two-story addition, you probably hired an architect or designer to develop construction documents with specifications and materials and product lists.
You’ve also probably hired a general contractor. He or she will use that information when bidding out work to subcontractors. If the project is smaller and doesn’t involve demolition, possibly just painting, you may be able to write your own detailed description and submit it to three painters for quotes or bids. You may be able to supervise this work yourself.
Ideally, in either case, you should have a budget in mind, but most pros advise keeping it to yourself so it doesn’t influence any workpeople’s estimates.
If pressed, Chicago interior designer Leslie Stern often will say something like, “We have a tight budget.”
“If I’m asked, `How tight?’,” Stern continued, “my next response is usually to lowball the price. Often, they don’t ask unless they suspect competition and wonder what they have to come in at to get the job.”
To be able to compare prices and the quality of materials and products, you or your general contractor should have each tradesperson supply a written bid of all the components in his or her part of your job, called a line-item breakdown, rather than a lump sum, says H. Gary Frank, a Chicago-area architect.
“If you’re redoing your kitchen, you don’t want the bid from the kitchen designer to say $100,000 to install a kitchen, but to tell how much is for the carpentry, appliances, painting, the floor, appliances, etc.,” he says.
Evanston architect Gregory Maire advises that the breakdown also should detail some alternate choices. And, where possible, it should specify brand names and describe preparation work.
A painting estimate should include how any existing wallpaper will be removed, how walls will be patched, if any skim coating will be done, whether canvas will be applied and what paints will be used, including the types and the brands.
Adding carpeting on stairs also requires detailed information: the costs to remove old carpeting, move furniture, take up old tackless strips, add and lay padding, repair the existing floor and lay new carpeting. How you want it laid also will affect the price. You may want it to go around the balusters or you may want to cut it back so you expose flooring, Stern says.
The bids that come in typically will reflect a low, middle and high price, and Maire usually throws out the low bid.
“I’ve found that it usually means the workperson hasn’t understood the scope of the project and what’s needed,” says Maire. “The results will usually reflect shoddy work or the person will come back later and say he doesn’t have enough money to finish the job.”
Others aren’t so quick to discard the low bid. They prefer to talk to all three potential hirees and find out how they arrived at their numbers and whether they can come down.
At this point, some owners may need to rethink their choices.
Clients of Chicago designer-contractor Eva Quateman found that in remodeling their kitchen they had to use stock doors rather than custom cabinets, laminate rather than granite counters, a wood floor rather than a complicated tile pattern and make do with a smaller deck. After completing the remodeling, they realized they would have to hold off furnishing rooms for a while, says Quateman.
Stern tries to avoid making a decision totally on price. “I recommend that I and my clients go look at the person’s work at other homes, which is at least 6 months old, so we can see imperfections and how it’s held up. Ceramic floors may look great, but may crack because the underlayment wasn’t done right.”
Besides exposing past projects’ defects, visits to past clients’ homes can reveal the tradesperson’s skill.
The bids should also address how the worker will deal with unexpected problems, which sometimes are billed on a time and materials basis. That method can prove open-ended and costly. One homeowner was surprised when her painter finished painting her dining room and charged her several hundred additional dollars because of crumbling plaster underneath. The painter had warned of this but never supplied an estimate.
Though she wasn’t going to stop the project in midstream, it might have been wiser to bring in a third party or explore the cost of that possibility in advance. “The painter could have opened the wall,” Maire says.
Sometimes the unexpected surprises represent a case of better now than later, however. On a renovation that Stern was involved in, a wall that came down revealed termites.
“We stopped the work, called the exterminator, replaced the destroyed structural members, and the owner was glad they were found before the work was done. They weren’t happy that it cost them $10,000,” says Stern.
Frank also recommends setting aside a percentage of the total cost of the job for such unknown contingencies so you don’t come up short when they occur. How much? Quateman suggests at least 10 percent, but more if the home is older. You also may be faced with the need to substitute materials or equipment of equal or better value if some items aren’t available once you begin work. Be sure that’s in the contract and that you decide whether the choices offered are equal, Frank says.
Many of the extra expenses are due to change orders that owners initiate.
“They always want to add more. `Hey, wouldn’t it be nice to do this,’ they say,” Quateman explains.
The earlier you change your mind, the lower the cost of materials and labor will be, but put such changes in writing, Frank says.
If you delete items, get a credit, but again how much you recoup depends on whether the items can be returned.
To encourage timely progress on the project, some homeowners like to provide in the contract for a 10 percent bonus for early completion and for a penalty if work is delayed for a month or more. But determining who’s to blame for the delay can be tough, Stern says.
“Often a customer holds up a job because of change-orders or an unknown occurs, such as a piece of equipment doesn’t arrive on time,” she says.
Furthermore, many workers won’t agree to adding such provisions, Frank says.
While a large part of your hiring decision will be based on the quality of the work and the price, you should also consider a number of factors that help determine the chemistry between homeowner and the tradesperson, such as: how long he or she says the project will take to complete; when the person can start; what their attitude is about correcting problems down the road, and whether they bring their own clean-up equipment and cellular phone or plan to use yours.
No matter what they say, call three of their references and ask whether they came on time, cleaned up well, got the job done punctually, and worked well with other tradespeople, Stern says.
Any bid should be good for about 30 days, sometimes 60. Once you make your decision, sign a contract–after your attorney looks it over if the work is complex or expensive. Upon signing, you’ll probably be asked to put down 10 to 25 percent of the total cost.
You’ll also probably be asked to make weekly or monthly payments during the course of the work. Withhold part of the total payment, maybe 10 percent, until your punch list–everything that still needs to be done–is completed.
Two alternatives to traditional bids can also help avoid higher costs.
Maire suggests a negotiated contract in which costs at each stage are estimated verbally and revised as work progresses through the design stages so that there are fewer surprises before work actually begins.
Frank suggests getting two guesstimates upfront from a contractor with slightly different alternatives for doing the work.
“If the owner wants a new kitchen that’s next to a family room, the possibly more expensive option could be extending the boundaries of the existing structure, while the less expensive one might be renovating the existing space and taking over a bit of the adjoining family room,” he says.