NOW is a great time to build
What makes the current economy such a good time to build or remodel? Indeed, is there any time that is better than another? I say yes, and I also say that now IS a great time to be looking at those building and remodelling projects that you haven't gotten round to. Those ones you've said, "One day I'' get around to it." So here's your very own "round tuit". Yeah, yeah, I know it's an old joke, and a pretty bad one. But the truth is, we all have things which we're going to get round to, but put off for various reasons. And the bigger the job, the more we tend to procrastinate - especially because of funds. But now you have your round tuit, let's look at 3 reasons why right now is a great time to build or remodel.
Interest rates are down
Money is cheaper now than for a long time, and there's lots of it. True, it's harder to get, and the house price crash has eroded equity many people had built up, but, if you can get finance (or have some tucked away), now is a good time from a finance point of view. And the great thing about putting money into an asset like a home is that it will bring a good return. Again, it's true that every homeowner has experienced a loss unless they have just recently purchased, but everything goes in cycles. From 1963 to 2004, the median house price rose over 1200%. Although this doesn't take into account inflation (a negative on this figure), it also doesn't take into account the benefit of not needing to pay rent (a positive factor).
Contractors are hungry for work
The construction industry is tough, there's no getting round that! General contractors, plumbers, electricians, and, yes, designers too, are all out there looking for work, so pricing has gotten sharp. Right now you can get good deals on your project. I recommend getting 3 quotes. Any more and you're wasting people's time, any less and you can't be sure you are getting a fair price. However, a word of warning. You may have to work hard to get quotes which you can really compare. In my experience, building contractors produce some of the worst quotes of any industry.
Suppliers are hungry for sales
Just like contractors, suppliers too are hungry to sell you their products. Shop around, especially on the Internet, and you can save yourself thousands. If you feel confident, become your own contractor and buy your own product ad save even more money. But do your homework, and know what you need, what you want, and what you're getting. Your neck is on the line if you buy the wrong product.
If you are looking at remodelling, rebuilding or building, then now is a great time to build. You can not only save money, but you can probably get a contractor to start pretty quickly. And it gives you good ability to shop around.
One final comment. When hiring contractors, ask for references, check the Contractors State Licencing Board, BBB, and other review sites. It's time well spent.
Home improvement, remodeling and repair v moving house
Many clients ask me whether they shouldn't just move to a new house rather than go through all the hassle of remodeling, home improvement of home repair. After all, a construction site can be pretty chaotic, noisy and messy. Why put up with that when you could just buy something that does the job you want which is already complete? The problem with that is that it's often very difficult to find something that is just perfect and you end up either making compromises with your wants list, or you are faced with home improvement or remodeling at your new home! Kind of defeats the purpose of moving right? Here are some questions I ask my clients to get them thinking about the total picture. Of course, this is after I get a general feeling for what they want to achieve and I have assessed the physical possibility of actually completing the project.
Do you like your current neighborhood?
Sometimes the answer is "No!" in which case, I politely suggest they SHOULD be thinking about moving rather than having me look at a house remodel. Overwhelmingly though, the answer is "Yes!" Here's positive reason number 1 for staying put. I talk with them why they like it and get varied answers. Nice neighbors, amenities close by, good access to transport, great schools for the kids. All these things are good reasons to try and turn that sow's ear into a silk purse!
Have you looked at houses for sale that have what you need?
The reason for this question is to get them thinking what sort of extra money they will need to be putting into a new home to try and buy what they want (often which is, as mentioned above, not totally all they want anyway). Many clients haven't done this so I always suggest they look on the Internet at some local realtors' sites to get a feel for what's out there and what vendors are hoping to get.
Have you factored in moving costs into the equation?
For those who have looked at homes and have some idea what it would cost them to upgrade and move, most have forgotten the hidden costs of moving. It just isn't the bottom line on your mortgage statement every month. Most have forgotten to factor in an average of 6% for realtor fees, a number of thousand dollars for closing costs, moving costs, and the disruption and time to actually move. If you sell your home for $200,000 and buy one for $350,00, your realtor fees alone can be around $16,500. That buys an awful lot of remodeling work! Add on moving and closing costs, and you can easily be at $20k!
These are my main 3 questions, or some variation of them, and they serve as a good basis for getting meaningful thinking and conversation happening. In my 15 years plus of designing, I've rarely seen a situation where a client could upgrade to get everything they really wanted. Less so everything they really wanted without spending $40-50,000 more. PLUS add on realtor fees, closing costs and moving costs. It rounds out to $60-70,000. That is going to buy you a good sized remodel or home improvement, without the drama of trying to sell, and the inconvenience of having to move. Yes, I agree, there WILL be some inconvenience while walls, floors and/or roofs are ripped apart, but these are generally less than the whole selling and moving scenario.
In summary, think hard before committing to moving to try and upscale. The first question is one that will probably need to be answered by someone skilled in design and planning. Can it be done? If yes, the next is, are we happy here and would we like to stay if we could? Some clients ask me about over-capitalization. This can be an issue if you are seriously over-capitalized (which is easy to do today with the slump in house prices). However, prices are very likely to rise, so being over-capitalized somewhat isn't such an issue as the reason for it is making the house more useful, so you will be staying in it. However, figure on sticking around to try and recoup your deficit, rather than trying to turn it over quickly.
To discuss how to remodel your home the right way, and navigate the pitfalls, please give us a call today, or drop us an email.
How to get affordable house plan design
I hear from many clients that affordable house plan design doesn't exist. And many of them have had an experience with not getting a good design or one that became expensive - either at design stage or during the building process. Let's look at those two areas to start with.
Design stage
Often the layperson goes into the process of getting a design completed by an architect or building designer with little to no background experience. Or worse, they talked to their <insert relative here - friend, uncle, cousin, sister> who got a "huge addition" done 8 years ago and it "only" cost them <insert silly low figure here>. That's all well and good. But what's it done? Filled the prospective remodeller's head full of outdated quotes (possibly from an inexperienced designer charging too little) based on the very technical "huge" addition! So Mr and Mrs Wannabe Renovator are shocked to get a realistic up-to-date quote for their project and immediately think they're being ripped off.
Or they get an estimate that the plans "shouldn't be much more than....." from a designer. However, a few redrafts later (did he/she mention there's extra charges for redraws?) and Mr & Mrs are very happy... until they get the account!
Ever since starting in design, I have run the design process as transparently as possible. This means giving a price and sticking to it. Apart from a few items - permit fees, engineering, etc - I clearly state what we're doing, what brief it's based on, and how much that will be. So what if I make a mistake in pricing the job? Tough luck - I should have been better prepared! I wear the mistake, unless I have inadvertently overcharged. Then I will give that reduction to the customer.
Construction
This is the time where it is most likely that cost over-runs will happen. No, it's not unscrupulous contractors (though every profession has it share - building designers included!). It's the nature of construction. New buildings are easier to estimate more accurately as most factors are visible and known at the project commencement. However, renovations are a different kettle of fish. Sometimes, even the professionals are surprised to see what's behind that piece of sheetrock they've just removed, or under that floorboard or covering they lifted. Whole walls may need replacing due to rot which isn't apparent during preliminary inspection. These will be tagged out of a contractor's bid, so the cost falls on the homeowner.
What to do
Shop around, talk to people, ask for references. Make sure you're comfortable with your designer, and also that you fully understand what is in the contract you are signing (if they don't offer a decent contract then walk away - life's too short to get tied up in litigation over "he said, she said"). Be clear on responsibilities and expectations (should all be clearly spelt out in the contract). Look at extra costs, especially any associated with you changing your mind part way through. Check who pays for permit fees, engineering design, Title 24 calcs.
You also need to feel comfortable with the person. Yes, they need competence and skill, but don't discount the human factor. Employing the world's best designer could be a road filled with potholes if you just don't get along! I'm proud to say that, whilst 3-4 jobs during my 15 years drawing in New Zealand ended up going awry and the relationship ending somewhat less than stellar, I had hunders of extremely happy customers. I'd love to make you one too. Give me a call or email today!