Slow Home Remodeling Market could mean lower remodeling costs

A slow home remodeling market may result in lower construction costs. This doesn't mean that you can get things done for nothing. Nor does it make it easier to find a good contractor. In fact, it may be more challenging.

In the Washington DC area, contractors are calling architects and requesting that they be allowed to bid on future jobs. We suspect that the same may be true in other areas. During the height of the home remodeling market, it was customary to have three contractors bid on a job. Now five contractors bidding on work is the norm.

More competition generally reduces prices. Based on conversations with architects, we think that jobs that would cost $375,000 a year ago, may be now completed in the low $300,000s. That's the good news.

Carpenter taking measurements

The bad news is that finding a good contractor will still take work. In this type of market, some firms may let go more experienced trades people to cut costs. This translates into lower overall quality on the job.

Finding the Right Contractor
When you are looking for a contractor, keep in mind your overall budget, desired level of quality, and the specific experience that a contractor has with your type of job.

If asked, most contractors will tell you that they can perform a variety of remodeling projects. In reality, most like working on certain kinds of remodeling projects more than others. Contractors feel comfortable with specific kinds of jobs because they quickly learn skills needed to efficiently do the job and make a reasonable profit. These jobs include well defined kitchen remodeling projects, raising the roof of a ranch house, whole house renovations, or just basement renovations. We found one contractor in Virginia that specialized in helping homeowners whose contractor walked off the job.

Where to find Good Contractors
Working with an architect may simplify finding the right contractor for your home remodeling project. Good Architects and Contractors work as a team.

Architects do much more than just draw sketches and construction drawings. Their success is tied to helping you realize your dreams and bringing those drawings to life. It's no wonder that over time, your architect has established good working relationships with a number of dependable general contractors. The same goes with general contractors who may feel more comfortable working with an architect that they have known for years. Design and Build firms are founded on such working relationships.

Contractor looks over framing and plans

You'll limit the downside considerably if your architect assists you with the selection of the contractor. First, architects will get to know you through the design process. This includes how fast you can make decisions, the quality of work you demand and the attention to detail that you exhibit. Architects will be in an excellent position to suggest general contractors that will have a greater likelihood of meeting your expectations. For example, if you are very demanding and meticulous, an architect would likely recommend a contractor that has people who can deliver that level of quality. However, if your budget is tight and you can afford to get the job done over an extended period of time, your architect might recommend a different firm that works at a much slower pace and with average quality of work.

Are you just one job?
Most people who are looking for a contractor fail to consider where they stand with the contractor. Sure, you are a source of revenue and a future reference, but in the end, you are just "one" job. If a contractor perceives you this way, they may be very uncooperative once the demolition begins. They may even threaten to walk off the job. The latter is something that you want to avoid if possible.

On the other hand, if you are working with a contractor that your architect recommends and the architect is going to look over the construction and approve payment, it's a different story entirely. Your contractor now sees your job not as a single job, but as a stepping stone to the "next ten jobs." Quality and timeliness is also related to being paid, so in all likelihood you are in for an easier time.

We learned about this when selecting a masonry subscontractorr. We found our mason based on an excellent job that he was doing for a builder. Unfortunately, the masonry contractor did use the same people on our job. How come? Because we were only one job while the builder could provide the future work. The more skilled masons were reserved for builders.

If you go it alone
Be very careful if you are reviewing bids from contractors and negotiating by yourself. Price is not everything and in some cases, it's not equal to performance. Try to consider all the costs entailed. For example, a contractor that is $25,000 more expensive may be worth every penny since he/she has a reputation for completing the project on time. Unreliable contractors who can't schedule well or deliver on time may be cheaper. However, they may end up costing you more money and inconvenience.

A delay of several months can mean greater stress and inconvenience. You simply are not enjoying the new amenities of your project. Also, if you are not living in your home during the renovation, you are going to have to pay additional rent for temporary quarters and also maintain your existing mortgage payment without any benefit.

Also keep in mind that many contractors who were doing well at the height of the market may be in trouble right now. The most important thing is to focus on how long they have been in business and whether they have the experience to weather slow markets. Also talk to other people that the contractor is currently working with to see how work is progressing.

Sometimes a contractor will take your money, begin the demolition in a flurry and then just stop work. This is an old trick. It locks you in. They could be at another job or looking for another customer to pull the same trick on.

Bottom line-- check references, and work with a good architect or reliable design build firm. We'll write about construction contracts in a future article.