Building vs. Remodeling
Building a new home or remodeling the one you’ve lived in for a while can be both exciting and intimidating. No matter how big your adventure, success is determined by the decisions you make before the first nail is hammered. The first step? Deciding whether to remodel or build from scratch.
Before you begin, it’s smart to learn something about what each option will entail, and how to find the right professional to take on your project — whatever its size.
Building: Starting from scratch
Building from scratch allows you to express your personal taste and style. Generally, new construction occurs when your current home’s architectural foundation does not support your end goal or when you simply can’t find your dream home on the resale market. Before you get caught up in the excitement of selecting land, construction elements, floor plans, fixtures, textures, and paint colors…
First put some thought into what you really want. Is it a maintenance-free lifestyle? An environmentally friendly project? Energy efficiency? Or space for a growing family?
Take some time to investigate what others have done. You’ll find a wealth of information online. We suggest you start with the National Association of Home Builders website for advice on finding a builder, types of home construction, project checklists and more.
Decide if you are going to use a custom vs. production builder. Courtesy of the National Association of Home Builders, Homebuilder 101 this chart illustrates the basic differences between builders.
Lastly, remember the wheel is in your hands. Builders will make suggestions and you should consider their ideas, but you are in control of the project’s budget, design, and material selection. That’s why learning about the possibilities is so important. Do your homework on siding, window, cabinets, door pulls, appliances, floor plans, and everything involved in your project to ensure you make the best choice.
Remodeling: Same home, different face
Just like new construction, there are a number of factors to consider before you decide to remodel. Perhaps you only need to expand or change one part of your home, or maybe you’re thinking about a complete overhaul. If you’re thinking about a complete remodel, remember that building from scratch or moving may even be cheaper. It all depends on why you want to remodel, how much you’re ready to spend and where you want to live.
Maybe you’re unhappy with your home’s layout but you love the surrounding neighborhood, or maybe you’re just looking to create a little more space for a growing family. Defining why you want to remodel is the best way to decide what needs to be done.
To get you started on some of the reasons to remodel, consider the following:
Stay put or start new?
The market in recent years has shown fewer new homes being sold and less new construction as more families choose to work on their current house rather than dealing with the expense and hassle of a move. This trend has created a buyers market—meaning lower interest rates and an abundance of building materials and contractors are at your disposal if you do choose to buy or build from scratch. If you’re thinking about starting fresh in a new home, now’s a great time.
Deciding whether to remodel your current home or move to a new home is all about weighing your options. Depending on the scope of your remodel, it may be the less expensive choice. But maybe you’re looking for a change in a new place, or the perfect opportunity to build the home of your dreams.
Analyze the cost and benefit of each choice first with this chart:
Hiring the right professional
Choosing the right contractor is the first step in getting your project on track. You want someone who shares your vision, is committed to bringing about the results you discuss has a record of doing so within the confines of their cost estimate. Look for a pro with a good reference from previous clients and a history of taking on projects of your size. The right contractor should listen to your questions, be knowledgeable about materials and eager to help you create your ideal home.
Talk to your neighbors and friends. They will be eager to share their experiences with you and may even help you locate a reputable professional. Word of mouth is one of the most reliable ways to find a service provider.
Do an interview over the phone
Identify your top candidates from your referrals, and schedule some time to make screening calls. Have some questions prepared and write down the answers you receive. A good contractor will be interested in your business and happy to give a prospective client information.
Here are a few of the questions we suggest:
Do they take on projects of your size?
Have they done a project like yours before?
Are they willing to provide financial references from suppliers or banks?
Can they give you a list of previous clients?
How many other projects would they have going at the same time?
How long have they worked with their subcontractors?
See how they measure up
Your local Better Business Bureau can provide information about a contractor’s professional history. Numerous complaints from past clients or subcontractors can be a red flag.
Set up a meeting
Before settling on a contractor, meet face-to-face with your top picks to discuss estimates and what your project will involve. This is a good way to establish a rapport with your prospective contractor—and to ensure you’ll have a good working relationship as the project progresses.
Ask for references
Your contractor should furnish you with examples of recently completed projects, as well as ongoing building sites for you to look in on. Stopping by one day unannounced is a good way to ensure you’re watching their operation run naturally, and that it hasn’t been prepared or cleaned up for you. Look for reviews online from former clients, and see if you can get in contact with any of them to ask questions. A handful of bad reviews in a long career are inevitable, but if you’re beginning to see a pattern of dissatisfied customers, walk away.
Put some numbers to your vision
Your potential contractors should disclose the cost of materials, labor, and profit margins for you to analyze and compare. Generally, materials are about 40 percent of total cost, profit is 15-20 percent, and everything else goes to overhead.
About 10 percent will typically be due upfront. Many contractors will break up the rest into three payments of 25 percent over the course of the project. The final 15 percent is due when you agree the project is complete.
Price isn’t the only factor
A cheap deal isn’t always the best deal. Make sure the contractor is using high quality materials and skilled labor. If their estimate is coming in significantly lower than others you’ve seen, ask yourself what corners they’re cutting—could they be lowballing you to get their foot in the door? Or are they desperate for your business because no one else will hire them? Be skeptical.
Put it in writing
Before you begin, set your agreement in writing. The contract should include your expected outcomes, a schedule for payment, the contractor’s insurance information, projected start and completion dates, a list of products and materials you want used, and protocol for managing disputes. It’s also a good idea to make sure your contractor gets lien releases, which protects your project if your contractor owes someone else money.