How To Plan A Renovation Part 3 of 3
How to plan a renovation by Rich Glass
Planning a renovation from start to finish is essential to a project’s success. There are many steps in a remodel project; setting expectations, budget, planning the project, bidding, hiring a contractor, work being done in phases, and finally paying the contractor. All of these items should be planned for in the planning phase of your project to help it run smoothly. This is part 2 of a 3-part blog to help you plan your renovation project. In How to plan a renovation part 1 we discussed Step 1: Setting expectations and Step 2: Establishing a realistic budget. Part 2 of the series focused on planning your renovation.It’s now time to finalize your project and make it happen. If you have been following along you should have a firm grip on what you want to upgrade or change in your home. You have evaluated your financial situation or discussed a loan with your lender. The pad of paper is full of your lists of exactly what you think needs to be addressed after you extensively considered what work needs to be done. Now let’s discuss putting your bid together, finding a contractor, and paying the bill.
Step 4: Put Together a Bid
Whether your project is small like adding some new lighting or extensive such as putting in a new kitchen a simple list to give to potential contractor or tradesmen is the next step. Again, get your pad of paper out or your spread sheet on your computer and start to organize your thoughts for a contractor to bid your project. Break out your list simply by trades (electrician, plumbing, HVAC) and what you need the contractor to do. Let the contractor or tradesmen know what finishes you are supplying such as tile, tubs, plumbing hardware, cabinetry, etc. If you are putting in a new kitchen do you need the contractor to install or is the person you are buying the cabinets from doing installation. Maybe you do not want the hassle of buying things and want the contractor to handle it all. This should be discussed up front, and since you are following my blogs you have already decided these things. The one item we have not discussed is are you planning on living in the place you are getting the work done? Depending on the size of the project it may not be possible for you to stay in the home. This is something that will need to be discussed with potential bidders. In some cases, some contractors will not even be willing to bid a mid-size or larger project if the client is staying on the property. It is not a trust issue; it is a hassle issue, not to mention that if you are doing a full-scale renovation the state will not give you an occupancy permit to stay while the work is getting done. Renovating is stressful and homeowners staring at every move is unbearable for many contractors. I strongly recommend that if you are doing a substantial project you need to be off site for your sanity and the contractors.
Step 5: Finding a contractor or tradesmen
Finding a contractor to bid your job is not something you should take lightly. My first recommendation is to always get at least 3 bids if its at all possible. This will be easy or hard based on your location. In Charleston, SC the real-estate market is so crazy it is hard sometimes to get more than 2. The first place you should look for a contractor is through your social network. Do you have a friend or family member that has recently had some work done? If they have a good referral it makes your process that much simpler. The next place to look would be your neighbors if someone in the neighborhood is getting some work done. Stop and meet your neighbor and see what kind of work their contractor is doing for them. Believe me people want to share their experiences don’t be shy. Last look on Google and read reviews. Find a contractor you like, trust, and comes with great recommendations. Yes, part of your process should be do you like this person. You better, you are about to spend a substantial amount of time with them and trust them with your money. There is a contractor for every situation. There are small one man shows that can come by and fix a leaking window, to full scale companies that do it all. Whatever your project, hire accordingly. You will meet folks who recommend not pulling permits on your project or hiring structural engineers to plan removing load bearing walls. I am always going to recommend erroring on the side of caution. Yes, permits cost money, but they also protect you. Permits require inspections which is another professional set of eyes looking at you project. Someone on the outside you can trust making sure your project is being done to the specifics of the International Builders Code. Structural engineers are responsible for making sure your house does not fall in on you after you remove the walls. I don’t know about you, but I like that security!! For just a few extra bucks you have your back covered, and it ensures you have more professional eyes on the project. A quick tip for you is; if you are doing a larger project your bidders will need to run sub-contractors through the project to get estimates from them. Pay attention to this process it can tell you a lot. Does the contractor have a set group of subs he works with or is he using new unknown people? In most cases established companies have a following of subs they know they can count on. This is important. If a contractor is unstable or not trust-able, they have to get vendors in that do not know them due to issues from past jobs such as lack of payment. Lack of payment means they cannot handle money, which means they cannot be trusted with your money. It may also mean they have no relationships with existing people which is a red flag. No relationships may mean the contractor is new or a small all in one show which is not necessarily bad (being new may be to your monetary benefit if they have great references but need experience). This may also mean that their current subs are too busy to do this particular job, however, I would still put a red flag up if everyone of their subs is new. Not every sub is over booked. Sub-contractors usually stick by a good contractor because they have consistent work. Beware of the “I can do it all guy”. I have yet to meet a contractor that is excellent at everything. Some people are good at tiling, some folks are good at rough carpentry, and believe me when I tell you finish carpentry is an art. All in one contractor’s are good for small projects but when you get to bigger renovations, they will struggle which will add to your agitation and most likely you will have a slower timeline. Electrical, plumbing, and HVAC should always be done by a tradesman who has the license to do it NO EXCEPTIONS.
Step 6: Due Diligence & The Contract
Once you have found a couple of companies to get you numbers it’s time to award one your work and they will need to get a contract together. While the contractor is getting his contract together for you, have he or she give you references. Call on them don’t be lazy!! If you are doing a larger renovation you must research your contractor before giving the company a single dollar by asking to go to one of their current jobsites so you can see what their work looks like. Is the jobsite clean, are their tradesmen or workers of any sort on the site? Does the contractor have equipment, tools, trailers, etc. on the site and is it taken care of? What does the craftsmanship look like? This step is critical because the next step is signing a contract and putting in your hard-earned money and you need to do all you can to assure you are picking a dependable person or company. A contractor should be proud of the work they do and want to show their work to you. Remember it is not always about how much a project cost to get done. You could find a person to do your work cheap, but remember you always get what you pay for. There is nothing free in this life!!Your due diligence is not quite done yet. You have chosen your company based on money, skill, subcontractors, trust worthiness, and most of all you really like the folks. Two more steps, first go online and check the contractor’s license with the state license agency. There you will be able to make sure that the person you have chosen has a license and that there are no pending review board issues. This is where consumers can file grievance’s if say a contractor did not finish a job or stole money. Now that is done, the final step is to read over your contract carefully. This is your roadmap to working with your contractor. This is his legal document that should list out the work he is going to do for you and for what amount of money. This should be specific not vague. Vague leads to comments like “that was not in the price” or “I never said I would do it for that price”. Not things you want to hear half way through your house or commercial property being remodelled. If the contract is vague write up a description of the work and call it Addendum A and you both sign it. Do something to know they are going to do all the work you want them to do for the agreed upon price. Have the contractor list out warranties on their work. An example of this is; does the contractor come back in a year if drywall work, they have done cracks? Again, don’t be dismissive, lazy or shy about these last two steps; it’s your money and time. Make sure everyone is on the same page so it’s not your aggravation!
Step 7: Preparing To Pay The Bill
How to pay draw payments to your contractor will be based on your contractor’s terms laid out in the contract. A “draw” is a best described as a schedule of payment; each time you write a check to a vendor it is considered a ‘draw”. I am going to suggest the terms for a draw schedule should follow a simple timeline, down payment, rough in payment, and last payment for punch list / final inspection. Do not pay any more than 15-20% down payment. This down payment should list what it is for, materials, labor, contractor fees, sub-contractor payments, etc. For that matter every draw payment listed going forward should list out what the payments are going to be for and at what time they are expected. Contractors charge anywhere from 10-25% of the total cost of the project. Never pay the contractor fee upfront. I also recommend to all my clients that they should pay vendor directly for larger purchases such as windows and doors or kitchens. This ensures the contractor does not run off with say a $35,000 window and door purchase. Some contractors will not allow you to do that. If that is the case, they should put those large purchases on their vendor account and only bill you when it is delivered or supply you with some sort of proof of purchase. We literally are working with a family right now that wrote a check for $46000.00 for windows that were never purchased and guess what the contractor is lawyered up saying he never said that is what the money was for. Don’t be shy this is your money!! Second draws should be paid after a rough in inspection is done and passed. Rough in inspections happen after the following steps are complete: Demo, framing, rough electrical, rough plumbing, rough HVAC. “Rough” is the term used to describe the work done in the walls before they are closed up. A contractor cannot put on the wall finishes such as drywall or shiplap until the inspector passes the work inside the walls. Once the trades are done the inspector comes in and says whether or not the work is done up to code standards. You can see this is complete for yourself, the inspectors leave a passed inspection sticker on the project which they sign and date. Look for the sticker by the electric panel, hot water heater, or on the window where the permit is displayed. Once inspections are passed the trades want to get paid for work up to date from the contractor which should require you to pay draw 2. When you give the second draw payment have the contractor give you a partial waiver of lien. This ensures that the sub-contractors and contractor cannot come back to you for payment on work you have already paid. If your contracts are with multiple people individually have them all give you this waiver. Draw 3 is critical, do not pay this for any reason until every last piece of work is done and you have an occupancy sticker from your local inspector. Make sure your punch list of items are done, mirrors hung, door hardware changed, paint, etc. You also have to get an occupancy permit from the inspector. IF you do not have an occupancy approval to move back into your home your contractor is not done. A contractor has to get a final inspection on all work done to get the occupancy permit. Last but not least have the contractor give you a full release of lean with your final payment. This ensures that the sub-contractors have all been paid and they cannot come back to you and lien your property for payment. Same as above, if you have multiple contracts make them all give you a final waiver. Waivers are easy to get from your state, go online and google waiver of lien partial and full for your state. These must be signed and stamped to mean anything so make sure it is done before you give any money.
Final thoughts....
These are just some of the recommendations I have for you. This should give you a road map to follow from beginning to end. Nothing is fool proof, so do your due diligence up front. Remember the end goal is to make your space beautiful. Pay attention to your project, don’t be shy, ask questions, and most of all keep track of your money. Good luck and remember The Flippin Designer Team is always here to help you!!If you are planning a renovation in Charleston, SC and you need help contact The Flippin Designer on our project inquiry tab located on our website and we will get back to your right away. The Flippin Designer is located in Charleston, SC. Our design team works locally and nationally on interior design projects and construction planning. We currently have projects in all phases in Mt. Pleasant, Charleston, Folly Beach, Kiawah Island, Sullivan's Island, & Myrtle Beach SC, as well as New Buffalo, MI and Chicago, IL.