BEST ADVICE: In home improvement - use a professional at all times - May 18th 2010
Why move when you can improve? Indeed, the demand for home improvements is endless, with billions of dollars spent annually in North America. I've seen many ups and downs in the home improvement business in the last 45 years, but two things remain constant: the appetite for skilled tradespeople and proven products.
When the real estate market is strong, so is the renovation market. In a strong economy, people tend to invest in such major upgrades as new bathrooms, kitchens and finished basements. But demand for home improvement doesn't stall when the economy falters. In an economic downturn, homeowners tend to stay home, spending more on improving the quality of their home life and less on luxury items like travel and vehicles. Renovations can range anywhere from a $10,000 bathroom upgrade to a $300,000 addition.
Appraisers are finding that homeowners are staying in their current residence as the cost and affordability of homeownership skyrockets. Mortgage brokers and lenders are ordering appraisal assignments that reflect two values: the "as is" value and the "as if renovations are completed" value.
A chain reaction of events is set off when a homeowner wants to upgrade their new or existing home. For starters, there are renovation products to buy, and carpenters, plumbers, electricians, landscape designers and project managers to hire.
Communication among all parties involved is fundamental to a renovation's success. Homeowners are faced with questions like: How much should I spend on renovations? What will be the return on my investment? Into what project should I direct my dollars?
Over the years, professional networks sprouted up across Canada that became trusted to accomplish renovations properly. In the 1960s, there was Blue Army. Later, there was Mr. Build and Mr. Renovator. For a time, even BCAA, an automobile advisory network, had a renovation services network for its members. The reason for such networks is simple. Homeowners demand quality products and professionals. However, to refer a company, tradesman, or product, one has to understand how the job has to be done. Companies and individuals have to be checked out before they can be recommended. A steady hand is needed at the helm that knows every detail of home improvement, from the building envelope to the minutest repair. In 1998, recognizing the demand for renovation expertise, I created a home services referral network known as HouseSmart. It has since grown into one of the most recognized referral programs in the home improvement industry, counting 170 certified professional contractors and building industry suppliers across Canada as its members.
Homeowners often think that they can go it alone - that they can be their own renovation contractor. Some can succeed in this, but more often than not, it has been my experience that homeowners-turned-contractors fail. I am constantly invited into homes and guided through this or that horror story in which renovations went terribly awry. In one instance, an owner hired the wrong engineer. Wanting to save money, the homeowner had become his own contractor and, in the process, saw their costs more than double. A pricey eight-foot cantilevered sundeck was built, but the deck's tiled surface wouldn't adhere to the underlining and was too great a load for the deck. If the owner had even a small gathering, the deck could have collapsed. Aggravating the situation, no building permit had been obtained. The problem was that the full scope of the job had not been considered at the outset. Had it all been mapped out correctly up front, it would have been much less than the $60,000 white elephant that resulted.
People often think that referral services can create an unnecessary expense when dealing with home improvement projects. But how much more does it cost if the job isnt done right? Getting caught by an inspector attempting to band-aid a repair can be plenty more costly than having professional do it right.
Don't be referred to home inspectors by realtors. I have seen inspectors miss drainage problems (the property was sold in dry weather, but when it rained, major problems flooded to the surface). Get your home inspector referred from a professional organization independent of the real estate transaction.
People working with friends: in my experience it seldom works. Some detail gets overlooked, or found not to be necessary (like a building permit). In one case, a client had a deck extension built by a friend in offence of a bylaw and, as a result, the deck had to be reduced to its original size.
When considering investing in an older property, be on the defensive when you see new carpet or a newly painted wall: what was the reason for that particular carpet or wall repair?
Have a clear, set budget for any project that is more than $50,000. Ensure that the contractor's rates are understood and that all materials and other costs are documented and approved. Feel comfortable with your budget.
Check out the contractor. Get his or her references. Contractors that are part of the HouseSmart network require 10 testimonials from home owners. Stay on your contractor's case. What are his or her work habits; where is he or she buying materials from; and are the bills being paid to the materials, supplier? (Remember, a contractor's supply store can lien your house). Does your contractor have third-party liability insurance? Are they properly licensed? Did they get a building permit? Get everything in writing. Are the builders covered under the Workers' Compensation Board? They should be.
- Get your home inspector referred from a professional organization.
- Check a contractor's reference before hiring him or her.
- When considering an investment in an older property, be on the defensive for cover-up jobs like new carpet or a newly painted wall.
- Make sure you are certain of the full scope - costs, time, supplies - of a job at its outset.
- Have a clear, set contract and budget for any project that is more than $50,000.
- Don't be referred to home inspectors by realtors. Go to a home inspector totally independent of the transaction.
- Don't be your own contractor. More often than not, homeowners-turned-contractors fail.
- Don't hire friends as contractors. Some detail usually gets overlooked, or found not to be necessary (such as a building permit).
- Don't hesitate to stay on your contractor's case throughout a job. After all, you are the one who has to live with the results afterward.