Home-improvement spending to rise, but small projects still reign
PERSONAL FINANCE EDITOR MarketWatch
CHICAGO (MarketWatch)—Home-improvement spending is expected to rise this year, but consumers remain cautious with their finances. They may be more willing to remodel, but still want a heck of a deal.
First, some numbers: Annual spending on remodeling projects is expected to rise 5.9% by the end of 2016, according to a recent forecast from the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University. Smaller-scale projects are still the norm, said Kermit Baker, director of the Remodeling Futures Program.
Some families are forgoing pricey student loans in favor of alternative strategies. Photo: AP.
Other data suggest a rise in homeowners reaching out to remodelers for project estimates: A recent survey found that 65% of National Association of the Remodeling Industry members are experiencing an increase in inquiries for projects this year, compared with the same time last year. And 61% reported an increase in the number of bid requests.
That shows more homeowners are at least thinking about remodeling lately, even though it’s uncertain whether those bids will turn into actual jobs, said Tom O’Grady, chairman of the Strategic Planning and Research Committee at NARI.
Financing for projects is still hard to come by, so those who are taking on projects often have the needed cash sitting in their accounts, he said. And projects are definitely smaller in scale: Instead of a $70,000 to $80,000 kitchen remodel, for example, owners are more likely to opt for one that costs $40,000 to $60,000, O’Grady said.View slide show: The top new projects for your kitchen and bath.
Still, some find remodeling much more palatable than moving in a housing market that isn’t at full strength, said Cheryl Reed, spokeswoman for Angie’s List, a network for consumers searching for service companies.
“Remodeling is coming back in a large part because homeowners are finding it’s much more economical to upgrade or repair or expand their existing home than sell and buy new,” Reed said.
What’s more, a homeowner interested in a remodel still can get a good deal today: “There’s demand out there, but consumers are still in the driver’s seat when getting this work done,” Reed said.
Below are five money-saving tips for remodeling homeowners.
Get a few quotes in writing
Price isn’t everything, but homeowners still do have the upper hand on negotiating price in many markets. Get at least three quotes in writing, Reed said. And make sure the bids are detailed and comparable, since it’s important to do apples-to-apples comparisons.
“If something is really cheap compared to other prices, you might want to look at that with a close eye. Maybe there’s something wrong,” she said. “It’s not a good idea to expect that you can get a huge, beautiful remodel for next to nothing, but there is room to negotiate.”
Ask for contact information for previous customers in the area, too. Checking references will tell you if clients were happy with their work.
Research material costs
Materials can be an area where contractors pad costs, so research material prices to know whether you’re getting a fair deal, said Anthony Rodio, chief executive of Redbeacon, an online home-services marketplace that connects consumers with professionals.
In fact, he suggests keeping materials and labor costs separate. Suggest going with the remodeler to buy the materials, and pay for them on your credit card, he said. You could also get the list of materials and buy them yourself at a home-improvement store such as Home Depot, he said.
Just do the math and make sure you’re truly getting a deal by buying materials yourself: Some veteran contractors with good relationships in the community may be able to get better deals than you can, Reed said.
Think about the best timing
Many homeowners start thinking about remodeling projects in the spring, when the weather gets warmer and they have their tax refund check in hand. But it’s not always the best time to get a deal.
Spring is the busiest time for contractors, summer eases up a little bit and in the winter there’s the least demand, Rodio said.
“The best deals are in the off season, just like getting a resort,” Rodio said. “The tradeoff: There would be less demand, so you’d get a better deal, but the impact on your life could be greater in the winter,” especially if the remodel will involve some exposure to the outside.
Negotiate contract terms
Ten percent of 1,000 Angie’s List members surveyed in a recent poll said that they didn’t sign a contract for their project, while 4% said they did but only glanced at it and 32% said they reviewed their contract only “somewhat closely.” That’s a big mistake, Reed said.
Not only should you have a contract, but it should as specific as possible. It should outline exactly what the job entails, as well as what materials will be used—such as the type of cabinetry you want or the makes and models of appliances, Reed said. If it’s not in writing, you may not get exactly what you imagined.
A contract is also a place to specify when payment will be made. Reed recommends paying at different milestones in the project. “In your contract, you want an approximate start date and a completion date … and tie payment to progress,” she said. For example, you may decide to pay the first third of the money after the first third of the project is completed.
Get contractor’s insurance information
In addition to acquiring proof that the contractor is licensed and bonded, it’s a good idea to get contact information for his insurance company, Rodio said. Do that in advance of the project’s start, so if something happens—say, a screwdriver is dropped and damages your counter—you can make the claim immediately.
“It’s harder to get [insurance information] after the accident happens,” Rodio said.
A good professional won’t be offended by this request, even if it is an uncommon one, he said.
Serving more than 50 of the 100 largest metro areas in the United States, independent sales associates affiliated with NRT distinguish themselves every day by creating exceptional real estate experiences for their customers and their communities. But don’t just take our word for it. In 2015, REAL Trends ranked NRT as the #1 Residential Real Estate Brokerage Company for an unprecedented 18th consecutive year. It’s an honor we’ve achieved by focusing on exceptional customer service and consistently putting our clients’ evolving real estate needs first.
Whether you measure our performance in terms of size, sales volume or number of transactions, the leadership of the companies and sales associates represented by ColdwellBankerHomes.com is driving innovation and delivering value to homebuyers and sellers. As a result, NRT’s growing presence includes more than 44,000 affiliated sales associates and 4,900 employees in 727 offices, all ready to serve you.
Looking to buy a home in Whitehall? Check out this amazing deal!The Ci
"Client Feedback on Eric Hanas --
How fast did your agent respond to your questions: 5 out of 5
How well did your agent use technology: 5 out of 5
How helpful was the support staff: 5 out of 5
How good was the auxiliary services we recommended: 5 out of 5
How did the closing go: 5 out of 5
How close did we meet your expectations: 5 out of 5
How likely are you to recommend us: 5 out of 5
Services used: Sell
How did you find us: Referred by a Friend
Your most memorable moment: "when we found our dream home"
The moment you'd rather forget? "When we found out the first house we thought we wanted had major issues with water in the basement"
Eric was amazing! There were a lot of highs & lows throughout the process but he was patient, responsive and helpful through everything.
Will you Refer Eric:absolutely at a later time.