 We have home plans approved
And a loan in
the works
Good contractors we seek
Without all their quirks
We're told to beware
Of subcontractors that dare
To walk off the job
We can't find anywhere
We hope to survive
This most taxing ordeal
That we'll face in our lives
Only time will reveal
Now that you have a set of plans ready for bids, you're about to embark a
roller coaster unlike any you've experienced before. Few adventures will tax
your sanity (or your bank account) more than stripping your walls naked and
redressing them with the latest fashions. Not until the bills are paid and
the contractors have come and gone will you fully appreciate the great
exhilaration and satisfaction you feel. Cupping an Amaretto by the warmth of
a crackling oak fire, you gaze into dancing flames, close your eyes, and
recount the trials and tribulations you endured...
You relive each crisis. Like the time your hand-cut
limestone ended up
on the bathroom floor - the wrong bathroom. Or when your painter's roller
salted the Steinway
with speckles of
Benjamin Moore Antique White. Or when you took your first shower
upstairs…only to find water drizzling through the recessed Halogens in the
dining room below.
In disbelief, you focus on the victories. Like the day you watched the
foundation pour; witnessed the walls go up; or when you first plunged by
candlelight into your roaring whirlpool bath for two. You shake your head
and grin all right - wondering how you survived such an ordeal. Impressed by
your tenacity, you sink back into your new
Henredon, savor a
second heart-warming sip of Amaretto, and enjoy la dolce vita in the
grandeur of your stunning new master suite.
Sound familiar? Every year, Americans spend billions remodeling their
homes. New home construction amounts to billions more. These numbers are
dizzying. Despite the insatiable tendency to leverage oneself into 30 years
of debt, few prospective homebuyers and remodelers educate themselves before
they venture. You’ve heard the horror stories of unscrupulous contractors,
schedule delays, cost overruns, and plain incompetence. Or the contractor
who skipped town after cashing the deposit. Flush with warning, you entrust
your contractors to look after your best interests. You assume they'll make
decisions in your favor. After all, you’re the one paying the bill, right?
Choosing a Contractor
As in all professions, there are true professionals who anticipate
customer needs and deliver consistently high satisfaction. I applaud these
contractors. Over time, their business ethics, high integrity, and passion
for customer satisfaction rub off onto aspiring apprentices. But, there are
others who look for shortcuts to prosperity or unwittingly underbid a
project only to find out they'll come up short unless they skimp a little
here and there. Consumers are the ultimate losers since it’s not easy to ask
the right questions. Without a solid understanding of the trades and best
practices, how are you to know when a job is done right? Must you wait for
the roof to leak only to learn that a critical piece of flashing was never
installed? Should the shower scorch you when the toilet flushes because the
plumber undersized the water supply? Of course not! You feel cheated after
discovering such unadvertised features of your home. Yet, examples like
these are pervasive.
Before you build, go in with your eyes wide open. Too often consumers
blindly contribute to mediocrity. Don’t accept sub-standard products or poor
workmanship because you don't know any better or are afraid to speak up.
Never sign contracts for hundreds of thousands of dollars without first
doing a background check on the company that won your business. Case and
point, few homeowners ever verify the license numbers of prospective
contractors. Yet, with a list of referrals and a quick call to the
Contractor's State License Board, a risky choice could be averted
altogether.
In California, for example, any contractor who performs more than $300
worth of work on your home must carry a valid contractor's license covering
the type of work performed. Most states have similar laws. Flagrant
violation of this law leads to periodic sting operations where investigators
pose as homeowners fixing up a run-down residence. In one case, 21
contractors and businesses were caught red-faced. Those found guilty were
subject to a year in jail and fines up to several thousand dollars. While a
valid license doesn't guarantee a contractor's personal integrity or quality
of workmanship, it provides you additional protection and leverage should
you encounter a dispute or file a lawsuit.
Unlawful use of another contractor's license number is another common
scam. One independent framing contractor gave us a bid with his license
number written clearly on the proposal. After checking with the
California Contractors
State License Board, we found that the license number belonged to a
contractor in a different county. Probing further, the
"carpenter-turned-contractor" acknowledged he was using the license number
of his former employer! Repeat occurrences of this experience simply
reinforce the notion that scams abound.
Even more amazing is how legitimate contractors fail to follow up on the
satisfaction of previous clients. From a list of referrals a prospective
general contractor gave to us, two past clients had few good words to say
about the work he had done. What's more, both said that certain details of
the job remained unfinished long after the contractor had come and gone. An
unimpressive track record, at best. Digging into the list even further, the
mixed reviews left enough doubt in our minds about the contractor's ability
to finish the job that the hunt for new prospects continued.
Like choosing a family doctor, there is no magic answer to selecting the
right contractor or sub contractor. A recommendation from someone you trust
is always a good starting point. We discovered some of the better
contractors as we wandered through other homes in various phases of
construction. Of course, be sensitive to trespassing and ask
permission to look around. Due to liability concerns, some contractors
won't let you walk a jobsite unescorted -- since an accidental slip is a lawsuit waiting to happen. In my case, I once had a close call when I
tripped over a scrap of wood and felt a number-four rebar graze my inner thigh.
Dashing my hopes for a future family, I luckily emerged with a superficial
scrape. The tear through my jeans was a fateful reminder of just how
careful you should be.
Still, we met other contractors and subs at local home shows. Some cities
even offer pre-screened contractor referral services. Others still we found
the old fashioned way -- through the Yellow Pages. Now, with on-line access,
you can even use the Internet to search for contractors near you. Sources
such as ImproveNet.com
or build.com are good
places to start. ImproveNet, for example, will match consumers with
contractors, designers, and architects.
Increasingly, even companies such as The Home Depot (homedepot.com)
and their upscale Expo stores are offering contracting services,
particularly for kitchen and bath remodeling. In the end, the most
powerful ingredient is your own judgment of character -- together with your
growing knowledge of building practices. All told, we scored about a 75%
satisfaction rate with our subs -- not bad for a major project. As for the
other 25% or so, let's just say their business cards have been recycled into
post-consumer pulp.
Of course, our 75% satisfaction rate didn't mean there were no disputes
or issues along the way. You can be sure we had some lively discussions with
many of the better subs we hired. But after the dust settled, weighing the
good with the bad, we would rehire about three out of four of the subs. We
generally had the best luck with subs who did the work themselves, often in
conjunction with a one or two-man crew. We tended to have more difficulty
with some of the small companies whose workers were not personally on the
hook to fulfill the scope of the contract.
For example, the companies that provided our rain gutters, closet doors,
and original rough plumbing were universally losers. Perhaps there's a pride
of workmanship that's missing when you're not directly rewarding the
employees with checkpoint payments or referrals. Successful contractors and
subs live or die by referrals. So maybe those who do the work themselves
take a little more care when they know the homeowner is also one who takes
pride in the art behind the walls.
Put It In Writing
Except for basic building codes, few rules govern standards of
construction quality and workmanship. Practices vary so much from contractor
to contractor and region to region that Building a Dream outlines
"best practices" that you should spell out on your plans and write into your
contracts. About the only consistency in the construction trade is
that if something's not explicitly spelled out in writing during the bidding
process, it's likely you won't get what you think you're supposed to
get when the project's complete.
Anything that requires specific materials, careful workmanship, or
attention to detail will never materialize unless you’re persistent, well
informed, and have it in writing. Even details that are clearly spelled out
on the plans may get lost in the shuffle of a major project. At least when
disputes arise, your written contract and plans can help to get things
corrected at the contractor's expense.
For example, structural inspections of certain homes destroyed by
hurricane Andrew revealed many homes had sheathing made of 3/8" chipboard.
Instead of using more rigid plywood as the code required and the plans
indicated, the chipboard crumbled when exposed to rainwater, resulting in
premature structural failure. In other cases, poor workmanship and
carelessness resulted in unsecured roof trusses. Until the roof framing blew
off like toothpicks, homebuyers were none the wiser.
With rare exception, there is no substitute for tight coordination with
your contractor, including frequent reviews and personal inspection of
details. It’s the rare contractor, indeed, who will handle your project
worry-free. After reading this book you’ll be able to anticipate potential
problems before they become problems. Building a Dream
provides you with a solid background -- a sort of consumer's tool set --
that you'll need to build your dream.
Reinforce the "Build it Right" Expectation
When it comes to home construction, the "do it once and do it right"
philosophy couldn't be more to the point. Saving a few thousand dollars now
could cost you tens of thousands of dollars later; not to mention the emotional
aggravation and inconvenience that accompanies problems in your home. Some
builders cut corners expecting that you'll never know the difference until
long after they're gone. Over the years I've toured scores of new homes
across the country only to be appalled at trends of sloppy workmanship and
"minimum" standards.
One half-million-dollar home in a new luxury development in greater
Atlanta had its shower tile glued directly onto moisture-resistant wallboard
(greenboard). The tile job itself was masterful, but what lurked behind
would surely cause the unsuspecting new owners problems five or ten years
down the road. Any professional tile installer will reiterate what the
Tile Council of America
professes to the trade - that a proper tile installation should be floated
with a monolithic base of reinforced mortar and a suitable moisture barrier
placed between the greenboard tile base. At the very least, the addition of
one layer of cement board such as Wonderboard, Durock, or Hardibacker will
provide superior longevity and protection against dry rot and moisture
damage compared to tiling on greenboard alone.
Of course, a proper job often costs a little more up front. Better
materials and careful workmanship carry their apparent premiums. In a
competitive market where demand for new homes fluctuates with the local
economy, builders are reluctant to price themselves out of the market. By
saving 5% here and 10% there, they can knock off thousands of dollars from
the selling price of a new home. To the first-time homebuyer, this appears
as a big price advantage, particularly if the "extras" are not readily
observable (such as a good foundation or proper framing details). Yet the
owner is ultimately the loser. Poor quality or "minimum" installations
invariably show up as expensive repairs down the road.
Clearly it's a "pay now or pay much more later" phenomenon. Given a
choice, it’s better to stretch a little now, but build it right the first
time. You’ll get the enjoyment and satisfaction of quality construction
along with the peace of mind that unexpected and costly repairs will be kept
to a bare minimum. In this regard, some contractors underestimate the
competitive value of quality for the discriminating buyer. But so long as
there is an abundant supply of uninformed buyers, many contractors will
continue to do the minimum job possible, even though they wouldn't stand for
it in their personal residences.
When the Bids Roll In
Once you've double-checked your plans for thoroughness and have clearly
documented the scope of work, you're ready to submit your plans to bid.
For almost any project, seek out at least three competitive bids. In some cases, you may want five or more, particularly if the dollar value of the project
is high. Since each contractor may require multiple sets of blueprints, don't be surprised if you
have to spend a small fortune to make enough copies to spread around. It seems
you can never have too many copies of your plans, since just about anyone
who touches your project will need a set to study. I found myself becoming
pretty friendly with the local reprographics house downtown.
As your bids begin rolling in, don't be surprised if you see quite a spread
-- especially if you're living in a booming part of the country where
contractors are in tight supply and stock options flow from faucets like
liquid gold. Over the past few years, I've witnessed an unsurpassed boom in
new construction and remodeling in California -- particularly in land-locked
Silicon Valley. With new millionaires emerging daily, I've even seen
hard-working professional couples scrap entire projects after choking on
prices. One recent project in Palo Alto came in at over $500,000 for a 1,000
square-foot second story addition and kitchen remodel. Excuse me, but is
that half a million dollars? Another contractor wanted $250,000 for a new
master bedroom suite. What market dynamics! One would surmise that it can't possibly last like
this. But so long as there is an undersupply of qualified talent and an
oversupply of hungry buyers flush with cash and vested stock, prices will continue to
remain inflated until the economy takes a breather.
If you're lucky enough to live in part of the country where prices are more
in line with typical household incomes, you may still find a wide
fluctuation range in your bids. When comparing between different proposals,
be sure you're comparing apples to apples. Do all bids include the same
materials? Do they all assume the same budget for unspecified items, such as
plumbing fixtures, appliances or other accessories? Are the windows the same
in all cases? Is painting included? Do the costs include permits or
temporary facilities that may be required? Is the time frame for completion
comparable between bids? What is the warranty? Are any contingency funds
built in to cover unexpected costs, such as termite or dry rot repair,
foundation reinforcement, repair of damaged flatwork, sidewalks, or
landscaping?
After you've digested each bid, you may require further clarification
from the contractor. Many contractors like to present the bids in
person, while others simply mail them to you. Contractors expect a certain
amount of haggling and, given that they have already sunk considerable time
into bidding your project, there's nothing worse than losing the deal over a
few concessions. Unless the project was way overbid, don't expect huge
concessions, though. In fact, it's important that the contractor makes a
reasonable profit off your job. If you squeeze too tightly, you can be sure
the contractor will cut some corners here and there to make up the difference. But you
might be able to bring the price down a few percent...or tighten up on the
language in the contract to your benefit.
Similarly, if you have a bid that seems too low or is significantly under
prevailing market prices, be equally cautious. Did the contractor
overlook something or make an error in the takeoffs? Does the
contractor have a clean legal record, good references, and experience?
Are the project payments heavily "front-end loaded" relative to the actual
completion of work and procurement of materials? Does the down payment percentage violate state
guidelines? Is the contractor insured, bonded, and can he or she provide
certified documentation of workman's compensation for all employees? Is the contractor willing
to provide lien releases for all suppliers and subcontractors? If your
contractor hedges or can't answer any of these questions to your
satisfaction, these are serious red flags that you must address before hiring
anyone.
Common ways that contractors save costs are to pay their workers cash under
the table. This avoids paying workman's compensation benefits as well
as employment taxes. Some may even show proof of workman's comp insurance, but only for their lead employees. Often they don't bother with many lower-level
laborers, even though it's the law. And while this may benefit you with seemingly lower
costs, isn't it ironic that you would trust someone with hundreds of
thousands of your hard-earned dollars who blatantly cheats his workers and the system to
avoid paying taxes and insurance? Furthermore, your own insurance may not
cover you from a liability standpoint if an accident occurs at the jobsite.
While life-threatening injuries are relatively rare on residential projects,
broken bones, crushed feet, and nailed fingers are all too common. On our
project alone, injuries included a nail-gun blast that drove a 10-d green
vinyl sinker right through the carpenter's thumb, shattering the bone in
three places. In another case, a 4x12 ridge beam weighing over 250 lbs. fell
four feet onto a framer's foot, crushing his toe. In a more serious
case in the upscale hillside community of Tiburon just north of San
Francisco, a careless laborer fell off the scaffolding while plastering an
exterior wall. Three stories below, the shattered man was eating a v-trowel
for lunch. Though he miraculously survived the 35-foot fall, he will never
talk or walk again.
Finally, ask your contractor to consider a 5-10% holdback. This means that
you hold aside 5-10% of every payment or the final bill until the job has passed muster. That
means that all punch list items have been fixed...and the contractor has completed the job to your reasonable satisfaction, including job-site cleanup. While many
contractors will resist any holdback, it's in your own interest to insist
firmly on it. All too often, there is little incentive left to complete the
job 100%. Lack of completion is the single largest complaint I hear from
consumers. It's human nature that once you've been paid, the incentive to do
any more work is no longer there, other than personal pride and business
ethics.
In the end, if there's only one concept you glean from this book, insist
on quality design, materials, and workmanship. Do things in the right order
to minimize rework. Never tolerate anything less because you deserve only
the best. Educated consumers are the best assurance that the construction
industry will continue to rise to higher standards at a price that's both
competitive for the consumer yet profitable for the motivated men and women
who make contracting their livelihood. |
