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November 10, 2011

Ground Rules: Improve the "Remodeling Estimate" Experience - part 4

Establishing the ground rules is a vital part of any remodeling project, but is often overlooked or assumptions are made that lead to confrontation or disappointment. In the estimating process, before the agreement is finalized, the details of the working relationship need to be discussed and understood. Then these agreed details must be placed in writing in the agreement.

The first point is communication. Who is the contact person for both the family and the remodeler and for what aspects each person is accountable. In many homes there is one person that primarily handles the financial decisions and questions while another may have the final say in design or color choices. The remodeler should be able to provide a mini organizational chart or a specified contact list for access and communication. Homeowners that contact the wrong or multiple persons with a questions may get inaccurate or conflicting answers that cause problems for both the client and remodeler. How will the project progress communication be handled? Will this be done via phone calls, emails, posted job board, or face to face meetings? Will there be a regular schedule for these progress updates?

The second point is paperwork. How will any change orders be handled? Both parties should make sure any changes to the original work scope and/or plans be in writing, approved, and signed by both the homeowner and remodeler before performing the change. Is there a provision in the agreement that allows for the approving signature of just one of the homeowners? If the change order decision needs to be made immediately is there a provision for email approval to move forward with obtaining paperwork signatures subsequently? Homeowners and remodelers equally should never accept and act upon verbal discussions no matter how long and solid the relationship is.

Construction permits, when read aloud, sometimes sounds like "root canal" to everyone involved. Make certain that the process and responsibility of obtaining, paying for, scheduling inspections, and waiting around to meet the inspectors are understood by all. A note to homeowners: while it may sound advantageous to you when a remodeler tells you that permits are not required for your project, they are important for your safety and assurance and is often mandatory with a shared legal responsibility for both parties. When in question, call your township.

Then there is the money of course. Is the payment schedule clearly defined in writing? In our opinion, the progress payments should be tied to several work progress milestones and not dates on the calendar. Is the schedule fair and equitable to both parties? A remodeler having half the total amount at the start of the work is unfair, but so is the client holding onto a large sum until 100% complete. There should be a written process that addresses how the work and payments will close out. We suggest that when approximately 90% of the work is complete, there is a walk-through meeting with all owners and a field and office staff representative from the remodeler. At this meeting, a mutual list of items yet to be done and things that need to be fixed or changed should be agreed, put in writing, and signed. The plan should be for final payment to occur with the satisfactory completion of this list combined with applicable final inspections and approvals that the municipality requires. Also, what methods of payment are accepted and what is not? Who collects these payments and are there separate invoices, receipts, and reconciliation spreadsheets provided?

There is often a list of items for the project that require viewing, comparing, and final selections by the homeowner that might not be finalized at the time the agreement is put in place. Typically these allowance items are products that may entail a visit to a showroom; such as: plumbing fixtures, tile, lighting fixtures...etc. Allowances have estimated dollar amounts associated with their anticipated cost. Are future decisions or changes to these items, and associated payment adjustments, clear? How will allowance credits and debits be applied to the payment schedule? What are the time frames, deadlines, and consequences for delay in making final selections?

The next point is time. Are there defined start and completion dates? Is there a remodeler's penalty clause for late completion? Are homeowners held responsible for delays in access, decisions, and payments? Are there acceptable exceptions listed that are beyond the remodeler's control? We recommend that normal work hours and possible weekend work be discussed and agreed upon. The homeowner should expect a written anticipated progress schedule for the entire project before the work starts. There should be a method of communicating and updating this schedule, as it will almost certainly change due to outside factors and change orders. Homeowners should have an expectation of knowing daily what crews will be working and made aware if there will be a "no-work" day and the reason why.

Finally, don't forget the home and family! Does the house have an alarm system and how will it be handled? Who is responsible for access when the homeowner is not home, and how will they access the home (key, garage code, etc.).  It is our suggestion that an alternate door code, or a new lock be used during construction, and switched back after the work is complete. Determine parking arrangements, garage and driveway access plus location for debris, portable lavatory, and material deliveries. Do the children or pets need special attention or isolation? Will there be daily, periodic, and final cleaning for safety, comfort and appearance? Determine the reasonable level of expectation for site cleanliness and don't forget it is construction that usually starts with destruction.

Having been integral parts of thousands of residential renovation projects, the staff at Design Build Pros has many opinions and suggestions that they gladly share with homeowners and remodelers that want to improve the overall remodeling experience. Let us know if you have any questions and we will answer where and when reasonably possible. INFO@DesignBuildPros.com 

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