Money Smarts Blog

Thinking about renovating your home? Make sure you’re prepared by choosing a well-liked and trusted contractor. Choosing the right contractor is an important decision when starting a remodeling project. Paul Winens, president of the National Association of the Remodeling Industry (NARI) and president and co-owner of Winans Construction recommends asking the following questions to yourself,  your contractor, and references, if you decide to renovate your home:

Are we talking about the same thing?

Make sure that you and your contractor are clear about cost estimates. Oftentimes, a contractor’s concept of a “worst-case-scenario” cost can be different than yours. “Always articulate all your assumptions,” Winans says. “Speak them out loud to the contractor.”

Have you experienced cost overruns?

Talking to references is the best way to learn whether a contractor routinely underestimates projects, either out of optimism or as a ploy to get the job. Winans suggests posing the question to references this way: “I’m concerned that the price of my remodel will change a lot over the cost of the job. Tell me why this is, or isn’t, a concern I should have about this contractor.”

Did subcontractors view the job and provide estimates?

A good contractor will get firm proposals from all the trade contractors. To do this, the trade contractors should visit the site with the general contractor before they provide their proposals and before the job starts.

Can you put that in writing?

When the contractor creates a written contract that’s backed by firm quotes from subcontractors, “surprises” in renovation projects should change the final cost only about 3% to 5%. When things go wrong, the contract specifies the contractor will absorb any additional cost.

What’s happening?

Asking questions is part of the homeowner’s job throughout the project. By chatting with the plumber, one homeowner learned she could turn a large linen closet into a laundry area at an additional cost of about $1,000. Not a bad price compared with the huge benefit of getting the laundry out of the basement. Asking questions also clarified other choices, especially when problems occurred.

“There will be problems,” Winans says. “You’re buying how your contractor responds to problems and surprises. Does he deliver solutions quickly and help you decide what the best way to proceed is?”

Once you make the decision to move forward with your project, contact IHMVCU for your financing options. From a home improvement loan to a home equity loan or HELOC, we’re here for you. Talk to a financial service representative by calling (309) 793-6200 and press 3.