Avoid Common Home Renovation Pitfalls

1) Zoning, Bylaws & Restrictive Covenants
Before you undertake any renovation or remodeling project, contact planning and zoning department in your city to ensure that your property is zoned for the changes you are planning to undertake.   Just because the house next door has added a second floor or build a new extension, it doesn’t mean that your home is also zoned for such change.

It is important to note that zoning and building regulations vary for each property.  As an example, zoning may allow one property to have two floors, while properties on each adjacent side may have height restrictions that restricts those properties to only a single floor.

Make certain that you pay attention to all details listed in the bylaws and building permissions so that you are aware of all its requirements.  For instance, zoning may allow you to build an extension to your home; however, it may require that the structure to grow to no more than 60% of the size of your property.

Another common and costly mistake to ignore is restrictive covenants.  Restrictive covenants are rules and restrictions that are set in place either by the original builder of an area (such as gated communities, town homes, town condos, condos, etc) or by the city (in case of homes in areas considered historical or heritage) to preserve certain look of an area.  Examples of restrictive covenants may be: restrictions on changing the outside look of a house within a gated community, restrictions on building extension to a historical or heritage property, restrictions on enlarging or changing windows on a town home.  Therefore, it is critical to find out if any and what restrictive covenant exist for your property.

homeIgnoring these regulations can be extremely costly as you may find yourself in a situation where you are forced to tear down your new extension or roll back your new renovation.  Selling your property may become extremely difficult if not impossible as you will be required to satisfy all zoning regulations, bylaws as well as restrictive covenants in order to obtain a clear title search to sell off your property.

2) Planing for Your Home Renovation Project is of most importance

Planning properly for your renovation project is absolutely crucial.  Although this sounds like a no-brainer, it is one of the most common and costly mistakes made by most home owners when it comes to home remodeling.  Therefore, plan ahead of time, plan well and stick to your plan.  Making changes along the way is expensive and time consuming as you have to spend time & money to do work and then spend more time & money to undo and redo the work already done.

For instance in case of kitchen remodeling be sure to check the counter top, the cabinets, back wall, ceramic tiles, lighting and all appliances to ensure that you or your spouse are happy with the colors and the design.  Once the counter top is installed, it is too late to decide that you want something with a different shade or color as the counter top has been cut and customized for your kitchen and it can not be returned to the store; so you are not just paying extra for labor but also for materials.

3) Financing and Budgeting
Financing is an important part of any project and home renovation is no exception.  Some folks perform complete cost analysis of their renovation project and then decide to piece meal their renovation project over a long period of time for various reasons such as lack of financial resources at the time.   It is fine to piece meal the project, just be aware that your initial calculation may have to be adjusted to include rising price of materials and labor.   Also it is smart to budget for an additional 10-15% to ensure that you are prepared in case any unexpected situation should occur.  It is not rare especially in case of older homes to encounter mold, rotten pipes or structural problems.

4) Obtain Permissions for Your Renovation Project
engineeringApart from cosmetic changes, all renovation and remodeling projects that alter the structure of your home such as adding and moving walls, creating a new space or building extensions and additions, requires obtaining proper permission from the zoning or planning department in your area.  Failure to obtain a proper permission for your renovation or remodeling project is against the law and you could face penalties.

Some home owners falsely believe doing things quietly is smart and saves everyone money.   Not only failure to obtain permission is against the law, it could also expose you to a wide range of unpleasant circumstances such as lack of insurance coverage when you need it most, severe penalties and even lawsuits.  Consider a situation where a home is burned to the ground by fire. The insurance company would inspect the property and would find that you built an extension or changed the structure of your home without obtaining proper permission.  The insurance company may then refuse to pay for any damages even if your renovation had nothing to do with the cause of arson.  The situation could become really ugly if you had tenants leaving in your basement.  Tenants could file for bodily or personal damages against you since you did not have permission to convert your basement to a self contained unit, and thus it was not considered fire retrofit.

You may also face severe penalties when the time comes for selling your property.  Today, most realtors as well as lawyers scrutinize land surveys to ensure all additional work done by you was approved.  If any work was not reported, it will most likely have a negative impact on the sell price of your home as the original sell price included the property and all its improvements.  Also, you would not be able to sell off your property until you resolve the situation with the city.

5) Decide Who is Responsible for Obtaining Permission
documentFind out who is responsible for documenting the work and getting the required permission, you or the contractor.  Applying for permission requires full understanding of building codes and regulations, and if your renovation is quite extensive it might be quite complicated to draft and document all the work. Thus, it is always best to have the contracting company apply for the permission.  After all it is the contractor or the contracting company that is doing the remodeling, so they are fully aware of the complete scope of the work that needs be done and should be able to provide proper documentation to the city.  See the section above to find out why it is important to obtain permission.

Therefore, ensure that the contracting company you plan to hire has ample knowledge about building codes and regulations.  Ensure they are also skilled and competent to draw and document what needs be done.

6) Hire Professionals with Solid Track Records
Just as you won’t buy your brand new car unless you have test derived it, you should not give your home remodeling project to the contractor that rings your door bell and promises big discount.  Make sure that you go and see their projects and check their reference to ensure that previous clients were completely satisfied with the quality of work they received.  Trust and customer satisfaction is the landmark of any reputable construction company.

7) Hire Qualified Trade Contractors for Each Trade
horizontal-mapAlthough this sounds straight forward, many home owners make the mistake of giving contracts to contractors they used for a different trade in the past.  Another word your roofer, even though he has done a superb job of installing your roof, should not do bathroom remodeling nor should your landscaper installs your hardwood floors.  Each trade should be handled by a qualified trade specialist in that trade.   It is possible that some contractors have skills in multiple trades.  For instance, a contractor may be skilled in flooring as well as framing or another contractor may be skilled in kitchen remodeling as well as bathroom remodeling.  However, make sure that your contractor is in fact skilled in those trades and has extensive experience.  See the section above for finding qualified contractors.

8 ) Have Price Estimate and Details of Work in Writing
It is always in your best interest to have everything put down in writing.   Especially with larger projects, task may be overlooked or miscommunication can take place if price and work details are not committed in writing.  In case of any changes requested by you or additional work added to the original project, ensure that the contractor or the contracting company provides you with new modified price estimate and work details.  This ensures that both you and the contracting company agree to the modified price as well as new work details so that there are no surprises when the job is completed.

9) Never Pay the Entire Renovation Cost Upfront
pay-moneyIt is not unusual for contractors and contracting companies to ask for a deposit to pay for materials and start the renovation project.   With large projects, contractors may also require that they receive payment after completing each major task.   However, before making any such payment check to ensure that the renovation is progressing as discussed and you are satisfied with the quality of service.  Be on your guard about the contractors that require you to pay all or most of the cost upfront.  Doing so removes any incentive for workmanship or producing high quality of service.

10) Understand Value and Avoid Over-Renovation
If you are renovating your home to increase its value, understanding value engineering is an absolute must.  To begin this process you have to find out what renovated properties near your home are selling for.  This would give you an idea for what the ceiling is and how much room you have to benefit by renovating your home.  It is not just enough to know that you have room to benefit from renovation, but to maximize your profit you have to understand what to renovate, and where to spend your money.  This is referred to as Value Engineering.  For instance to maximize your gain, is it best to enlarge your bathroom or build a patio?  Is there any value in adding a fireplace or building a second garage?  Since Value engineering varies for each area and neighborhood, you need to do research on value engineering in your area.  To learn more about maximizing profit through value engineering see the document titled Renovate for Maximum Profit Using Value Engineering

One major mistakes home owners and investors make is to start the renovation project without regard to these facts just to find out that after spending so much time and money on home renovation, they are unable to sell the property at the desired price.

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Comments

One Response to “Avoid Common Home Renovation Pitfalls”

  1. Hamilton Builders on August 5th, 2010 2:33 pm

    Knowing first the quality of the ground where is your house was put up is essential because of there some kind of places where the ground is softer. Some home buyers consult first to some expert if the the place they are planning to put up a house is not a earth quake zone.