Milwaukee/NARI Offers Tips for Determining Remodeling Budgets

June 4, 2014

Determining the remodeling budget, understanding the project bids, and trying to get the desired result for the desired price can be the hardest parts of the remodeling process according to members of the Milwaukee/NARI Home Improvement Council Inc., the area’s leading home improvement and remodeling industry resource for 52 years. Milwaukee/NARI’s experts recommend how to determine the budget and prepare for a successful home improvement project.

The remodeling process begins with needs and wants, ideas for achieving them, and a dollar amount or range that homeowners are willing and able to spend, though not necessarily in that order. How much planning should be done before meeting with contractors to get bids? “We have clients that come in with a full set of plans ready to go, and customers who don’t have any idea where to start,” said Randy Lewis, CR, CRPM, construction manager with Oak Creek Plumbing Kitchens and Baths. “We have had people who thought they had everything planned only to discover there were many more options they didn’t think of. There truly is no right answer to how much pre-planning should or could be done.”

As would be expected, the remodeling industry fluctuates somewhat with the economy and the housing market. Gary Sannes, CR, CGR, president of S.J. Janis Company, Inc. in Wauwatosa, noted an increased demand for residential remodeling in 2014 as a result of an improved real estate market, increased home equity, decreased foreclosures, and a stronger stock market. “A greater demand produces a greater return on your investment,” he said. Factors that influence the return on investment include “your neighborhood, comparable values, the age of the home, the type of project, if it corrects deficiencies, and the level of the finishes,” Sannes said.

But how can homeowners know if the budget amount they have in mind is enough for their dream remodel? The experts agreed that actual project costs vary widely for several reasons.

Ann Rodrigues, vice president of DG Remodeling in Pewaukee, said, “Costs are driven primarily by the selections and the level of finishes, but also greatly by design.” She said the project cost when the design is not changing—where products like countertops, cabinets, toilets, tubs, and flooring are replaced and everything is staying in the same location—will be different than when the design is completely changed, plumbing and electrical are moved, walls are removed, and more cabinets or countertop space are added. “Other major driving forces are the condition and shape of the existing home and the mechanical and structural system,” Rodrigues said.

Even installation costs can vary. “Depending on the product selection, labor to install the particular item is sometimes the reason,” said Lewis.

“Generally, we all would like the ten pounds of wants and needs to fit into the five-pound budget container,” Sannes said. “That, many times, is the most difficult phase of the project, and can be challenging.”

A successful remodel begins where the ideas and budget meet—where happy consensus is found when the homeowners collaborate with a contractor who understands what they want, and as a team they plan a suitable project that fits the budget.

If working together is key, what do homeowners need to bring to the table? With resources like Houzz and Pinterest readily available, more homeowners are creating idea books and pin boards before meeting with a contractor, and continuing to do so during the budgeting and planning processes. “We find that a ‘wish book’ of sorts can be most helpful in establishing a budget, so we suggest homeowners clip and save or ‘pin’ photos of projects that appeal to them,” Rodrigues said. “A careful study of the likes and dislikes will allow us to narrow the scope of the project and balance the real desire, wants, and needs.”

Sannes said, “Identifying what your priorities, needs, and wants are and discussing their impact in a collaborative way with the contractor is important in successful planning.”

Open communication is key—on both sides. Rodrigues said, “A qualified remodeling contractor will bring to the table the skillset needed to develop a program that respects the customer’s budget and accomplishes the client’s major goals.” Sannes added, “An experienced design/build contractor will be able to provide a design, product options, and solutions with a realistic scope of work to provide the best value.”

How many meetings will it take for the homeowners and the contractor to find and finalize the remodeling plans that fit the budget? Lewis said, “The process to determine a budget at our company is to meet with our customer first to determine the scope of work. Most customers have some idea what they would like their budget to be. After meeting with them and looking at their project, we then start designing and picking products that fit the project and budget. We usually will meet at least twice with them before finalizing a budget—once at their home and another time at our showroom.”

Milwaukee/NARI recommends getting multiple bids before choosing a remodeling company. What if the bids are vastly different? “Some reasons for this could be products, suppliers, subcontractors, or in-house employees,” Lewis said. “Some bids include allowances while others are hard numbers. That’s why we sit down and go line-for-line in what is included and not included in our proposals.”

Sannes said, “A trust is developed during your contractor conversations, and you generally have an intuitive reaction to who you can trust and who is looking out for your best interests.”

Rodrigues added, “It is very important to consider the qualification and expertise—as well as the licensure and reputation—of the remodeling contractor,” she said. “A contractor who uses less than qualified tradespeople to complete the work for any aspect of a project is doing a great disservice to the consumer. As the saying goes, ‘The bitterness of poor quality remains long after the sweetness of a cheap price.’”

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