Determining the cost of a house renovation is frequently sought after information by owners seeking the benefits of a home renovation project.
It is also one of the most misunderstood things to obtain from a reliable source. The pursuit for quality renovating at a fair price is first and for most on a homeowner’s mind when considering home renovating.
In addition to the poor sources of reliable information the owner must traverse the landscape of misinformation that spreads through the internet.
Misinformation about the return on investments and the process of obtain such information runs frantic.
There is also plenty of misinformation about what you as the owner should expect in researching the cost of a house renovation and home renovation planning.
This article will shed light on the proper way to get accurate and qualified pricing information on your home renovation project.
First by understanding what is unqualified misinformation and how to recognize it.
Secondly, we will share with you how to have confidence in collecting the qualified information what it takes to make decisions.
Discrediting Common Misunderstandings
The typical method for most homeowners to find construction cost estimating is they search the internet.
There are many sources that provide unqualified black and white answers to complex construction cost questions.
The first thing to understand is that there are no black and white matter of fact answers. This is principally due to the fact that no home remodeling project is exactly the same.
Each home has different products, different quantities and different general conditions that effect the cost.
Home Adviser Cost Estimates – Home Adviser is one of the largest lead source companies in the US. They also operate under the name of ANGI’s after they purchased Angi’s List.
They are a national company that charges construction companies a fee to refer clients for various types of home improvements and repairs. Home Advisors provides contractor referrals to homeowners free of charge.
They also survey contractors on generalized questionnaires concerning home improvement cost.
Home Advisers post this information on their website as a resource tool for homeowners. The only problem for unexpecting homeowners is that the home improvement cost information they provide is consistently inaccurate.
This due to the unscientific method they use to qualify and collect their information.
The home renovation cost information they collect is not qualified for items such as quality factors, logistical issues or quantities.
They will often express these over simplified unit cost of a house renovation and many other topics in much lower amounts than they realistically are.
This not only establishes unrealistic expectations for homeowners, but it presents issues for their paying customers, the contractors to explain the differences.
This type of information sharing creates more problems than it solves.
Your Neighbors Project Cost – Another popular source for the cost of a house renovation for homeowners is to ask their neighbors or friends that have had work done.
This is often a high confidence source that homeowners feel they can count on. The deficiency in this source is that your friends or neighbors most likely will know how much they paid and the products that were selected, but this is just one project with a few bidders.
It does not necessarily represent the cost of a house renovation that the homeowners with different specifications will pay.
What neighbors and friends are a good source for is a renovation contractor referral. They can provide you a testimonial about their experience with a specific renovation contractor.
This type of reference can be an extremely powerful tool when you are looking for a quality minded home renovation contractor.
Soliciting More Then 3 Bids – The most effective method of developing high confidence cost of a house renovation is soliciting 3 qualified bids from vetted contractors.
Although this is by far your best option for getting a creditable cost estimate, this method requires the homeowners to have construction plans and material specifications.
Without plans and specification the owners will have no method to evaluate the bids on a level playing field.
This method also has some deviancies in that if there are plan errors or omissions the owner is responsible for the cost.
The Best Process for Obtaining Cost
The most effective method of obtaining your cost of a house renovation is to hire a home renovation contractor to design a plan with the intention to build it.
This process is referred to as the design to build method and is one of two technical construction delivery methods.
The other being the design to bid delivery method, which is the traditional process of the owner hiring an architect to prepare design plans for soliciting bids from home renovation contractors.
The design to build delivery method is when you hire the services of a reputable home renovation contractor to design, price and build your home renovation project.
This has many advantages over the design to bid. The main advantage to the owner is that the home renovation contractor is fully responsible for both design and construction.
If there are design errors or omissions from design, the general contractor takes responsibility. That is not the circumstances when the owner bids the plans to general contractors.
The reason for why this process is so accurate is because of the comprehensive approach of this process.
During each step of the plan design process the details of the vision become much clearer and more defined.
In addition, with the renovation contractor involved in the design process, he is providing insights of value engineering during the process.
He is hearing the discussions during the design even if the ideas may not make it into the final design plans.
The following is the steps of the developing accurate well defined cost of a house renovation;
Financial Feasibility – The financial feasibility study is often requested early in the assessment process by the owner.
The kind of questions that this feasibility study answers are questions like should the owner build new construction or renovate their existing home.
There are a number of factors to evaluate in working toward the best decision. Some these critical elements are neighborhood values, if the neighborhood is in transition, the owner’s capital resources and the requirements to renovate a home.
Design Plans – Of course the design process begins with the plan design. The builder, architect and the owners are called the design team.
This collaborative approach discusses and implements the needs and wishes of the owners to incorporate into the design plans.
The plan design process is a developmental process from concept through construction documents.
The owner’s vision is materialized through computerized automation before their very eyes.
Scope of Work – As the construction plans are being completed the renovation contractor takes the notes from the design process and with the plans develops a scope of work.
The scope of work are the details associated with executing the construction of the architectural plans.
It is the details of the scope of work that states to the owner that the builder understands the many conversations that take place during design.
Product & Material – The products selected and the materials proposed are referred to as the specifications.
The specifications characterize the level of quality of the finishes. In the absence of products selected, the builder will use allowances that are representative of the level of finishes desired.
Contracts & Insurance – The contracts and insurance certainly are not the sexy part of the business, but never the less an important part non the less.
The first essential contract is the contract between owner and home renovation contractor. This can take many forms and structures, but what is important is that the owner have a clear understanding on what to expect from the renovation contractor.
It is the general contractor’s responsibility to contract and administrate the insurance of each subcontractor that does work on the project.
The renovation contractor solicits bids, develops the scope of work, draft and facilitate the contract and insurances.
Best Sources & Practices for Obtaining Accurate Cost of a House Renovation
The best source and practice in obtaining accurate home renovating cost is a process as prior discussed.
This process as stated begins with hiring a qualified renovation contractor and creating a design team.
The design team then embarks in the process of creating the construction plans with a targeted investment budget in mind.
The goal is to carefully create a detailed scope of work that reflects the wishes of the owner with the investment goal in mind.
Once the construction plans and scope of work created, the home renovation contractor will prepare a schedule of values.
Selecting the Right Type Contractor – Hiring the best general contractor for any owner is for a goal of combining both skilled master builder and trusted advisor.
This means that hiring a general contractor is much like hiring an attorney. You are looking for a competent professional that fits your personal needs.
An owner should hire a reputable remodeling contractor on the basis of their experience, skill set and their professional demeanor.
The goal for an owner is to hire a remodeling contractor and create an effective working relationship with open communication and sharing collaboration.
It also helps make the stressful periods better to manage when both parties enjoy working together. The most significant factor of a working relationship is trust.
Both owner and general contractor need to feel a certain level of trust in each other.
That is not to say that you should hire a renovation contractor on a hand shake.
Rather during the extended time, it takes to conduct design and construction of a major home renovation project, there are periods where both parties can become suspicious of each other.
It is during these periods that patience gets tested and things can escalate quickly to tax the working relationships fabric.
Target an Investment Budget – Understanding your feasible investment capabilities is essential before you begin the design process.
This will save you money and time in design cost, not to mention the aggravation of redesigning a plan that you love.
With a carefully defined target investment budget for the home renovating cost, the design team can interact meaningfully in value engineering during the actual design process.
Having an investment budget also allows the owner to pre-arrange their financial matter such as pre-arranging an interim construction loan and then rolling this into a jumbo mortgage early in the design phase.
Developing Renovation Plans – Developing design plans is certainly the significant part of the renovation project, but not the only planning required.
In every major house renovation project, there are countless matters that need to be addressed. These include such things as does owner reside in the home during construction or do they move out.
Other such things like the interruption of utilities, workman etiquette around the family, material & equipment lay down storage areas and the all-important construction schedule.
Developing an effective execution plan requires collaboration between owner and general contractor. It’s necessary for the owners to openly discuss their concerns and for the home renovation contractor to communicate his daily and weekly plans.
Aligning expectations with the actual execution plan goes a long way in nurturing a good working relationship.
Create a Scope of Work – There are 2 required parts of developing an accurate schedule of values.
First a detailed construction architectural plan and secondly a detailed scope of work.
Although the construction drawings have dimensional instructions to build the plan, they often do not include the installation details, sequential steps required and the level of quality grade/ workmanship necessary.
The scope of work also describes who provides what materials and what the materials are.
Creation of a Construction Schedule – The construction schedule is another tool that is created to help forecast the big picture of accurate construction cost.
You may ask how does a schedule effect the construction cost. The answer lay in two areas of the actual construction operations.
The first cost element has to do with time, the longer a construction project extends the greater the cost. This is due to things called general conditions.
These items include rental equipment that is used for the duration of a project like temporary toilets, dumpsters and security devices.
The second cost element that is affected by a schedule is the overall time required to complete a project.
In all cases the overall time to complete a project is an important part of an owner accepting the terms of a contract.
If there happens to be pressing issues that require the construction schedule to be compressed, it normally will require additional labor and possible overtime wages.
These situations have a serious effect on the total cost of the project.
Develop a Schedule of Values – The schedule of values is a categorical list of construction cost.
They can be presented in many forms, but most general contractors use the 16 divisions of construction to present cost.
These are a master format for organizing construction cost in divisional categories. This method is widely accepted in the industry.
A general contractor will develop these divisional material and labor cost in a variety of ways. For material the home renovation contractor will literally count materials pieces, linear feet and yardages to arrive at the cost.
For labor he might use historical unit prices or man hours required to execute the different task. It is due to these exact techniques that makes the remodeling construction cost so accurate.
Counting the actual sticks and bricks leads to accurate cost measuring techniques.
So, if you want confidence in your cost of a house renovation it requires adapting a disciplined effort of creating measurable tools to quantify the actual cost.
If you take short cuts or uninformed square footage guessing, you are likely to experience unpleasant construction cost results.
