Home Remodel on a Budget

Financial Goals

“I’m writing an article on how to come in under budget on a home remodel,” I said into the phone. Then I had the hold the receiver away from my ear so as not to be injured by the hysterical laughter.

This happened with nearly everyone I spoke to. But if you’re licking your lips at the prospect of a new kitchen or bathroom, you can avoid some of the most common budget-busting mistakes.

Before we get into the dos and don’ts, a word of caution. There’s a big difference between “under budget” and “inexpensive.” Nothing you can do will make remodeling cheap. Remodeling Magazine publishes an annual survey of the average cost, in markets nationwide, for over twenty popular types of remodels. If you think you can get away with doing yours for much less than these figures, you’re either Bob Vila or deluded.

“People who haven’t remodeled before or people who’ve been do-it-yourselfers really don’t have a good concept of what a realistic budget is,” says Sarah Henry, owner and general manager of Gaspar’s Construction in Seattle. “So they start with a really low budget, and in their mind they feel like, well, it came in twice what I had budgeted.”

Most of the advice below will do nothing to make your remodel cheaper. It might even make it more expensive. But it will help to minimize nasty surprises.

What not to do

1. Don’t watch too much TV. “Folks are watching HGTV and they’re getting all these numbers flashed up on the screen that are absolutely worthless,” says Jack Johnston, architect and certified remodeler with Golden Rule Remodeling in Salem, Ore. “They just bought the materials for that price. They don’t show the contractor’s overhead or profit or the supervision time, because the homeowner did their own general contracting.”

2. Don’t allow allowances. Allowances are details budgeted for but left unspecified at design time: for example, what type of flooring or tile to use. Bad idea, says Johnston. “Somewhere down the road, the homeowner finally picks out the tile they want, and it has to be special-ordered, it’s three weeks out, and it costs an arm and a leg.”

Furthermore, you shouldn’t let a contractor talk you into taking allowances.

“Some contractors will play games with that, unfortunately,” adds Johnston. “They’ll put a super-low number in there just to make it look like they’re the low bidder.”

3. Don’t resurrect the dead. “Homeowners, to make their budget, will cut out things that they really want, and then they add them back in construction,” says Henry. This doubles the cost of that double sink. If you liked it, then you should have put a dollar figure on it.

4. Don’t hire a friend as your general contractor. This is a good way to go over budget and kill a friendship simultaneously.

What to do

1. Be specific. An estimate based on your ten-minute verbal description of the project isn’t worth the email it’s printed on. Too many people use exactly this type of description as the basis for “competitive bids” which are basically made-up, because there’s isn’t enough information to base the bids on. Even an architectural design drawing may not be specific enough if the architect doesn’t know enough about construction. “Most architects actually do not have a good knowledge of the construction industry and how much things really cost,” says Johnston. “Usually they’re opening up some kind of book they bought somewhere.

2. Do your homework. And I mean a lot of homework. Don’t just check references. “Get people’s names that aren’t necessarily on their reference list,” advises Johnston. “Just ask them, hey, can you please give me the name of your six most current jobs? And if they can’t come up with those six names, you’ve got to wonder, why?” Look for previous jobs that are similar, especially in the age of the property being remodeled. This is tedious work that you’re supposed to do right when you’re most eager to jump in and take that old bathtub to the dump.

Skip it at your peril.

3. Expect the unexpected. My friend Becky Selengut, a chef, recently remodeled her condo kitchen. “Do all your research, get all your quotes, and then multiply it by two,” she says. “I would tell anybody that you’re going to have probably ten major mishaps, and to not be stressed about them. Just expect that they’re going to come, and then check them off and go, okay, there’s number three, there’s number four.” This is especially true in older properties (Selengut lives in a 1916 building), where old plumbing and wiring are just waiting to jump out and say boo. “I’m not going to say that contractors lowball you,” says Selengut, “but they’re not going to be forthcoming that when they open up an old house, they’re going to find all sorts of stuff.” (Except she didn’t say “stuff.”)

4. Choose a licensed and possibly certified contractor. The National Association of the Remodeling Industry (NARI) lets you search for members nationwide. NARI also has a remodeler certification program; it can’t replace good references, of course, but many jurisdictions have unnervingly low standards for issuing a contractor’s license. “Anyone can be a contractor,” says Johnston, who is certified. “There’s no big educational requirements.” A certified contractor will, of course, give you a higher bid than the guy down the block who painted “CONSTRUCTION” on his pickup. But the certified contractor is also more likely to hit the bid.

This is all common sense stuff, right? Exactly. So I’ll give Johnston the last word: “Unfortunately, a lot of homeowners dupe themselves because they do not use common sense.”

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