“What Your Contractor Can’t Tell You”

August
14
2013

Book Review

 

I was surprised to learn that you can expect to make 1500 decisions when you are building a new home.  Scary!  Especially when you don’t really like making decisions anyway! The author tells us, “Your choices are infinite when you start, so design is more a process of de-selecting than selecting.” The author, Amy Johnston, guides us through this process.  She says owners will be entering a culture that is much less straight forward than it appears, and everyone in that culture knows more than we do. And added to that are all the new relationships, deadlines, quality standards and more money than we’ve spent on probably anything else, and it becomes a huge undertaking that most people don’t know how to prepare for, and few have wanted to tell us. Until now.

If you are planning on building a house, (and by building I mean hiring contractors and builders to do the actual work) or even if you are just thinking about building your dream home, this book is a must to have on hand.  Ms Johnston says, “This book is not about how to swing a hammer, or even how to be your own general contractor.  It is about how to be a savvy consumer of design and construction services and a competent participant in your own project.” And she does not disappoint.

Her advice covers how to start a project, including picking the people on your team, from bankers to surveyors. It also talks about the project plan, how to keep good notes and information, and how to distinguish between needs and wants.  She also suggests (and this really is great advice) be true to yourself and the way you really live, accept your own lifestyle.  For instance, if you spend the evenings watching TV (like we do), don’t make the fireplace the focal point in the room the TV is in.  And I don’t know about you, but I can’t really understand the TV over the fireplace design element.  I would think your neck would hurt by the end of the evening, plus it seems to “take away” from both items!

My well used book

My well used book

Ms. Johnston suggests not to ignore the tried and true.  Yes, newer and sometimes even more efficient designs, materials, supplies and equipment come on the market every day, some are great, but some will be off the market in a few years.  You don’t want to try to replace a broken part or find someone to fix it then, which is especially true in heating and air conditioning.

She discusses and helps with how to work together as a couple and make more balanced choices, how to provide more details so the project runs smoother and how to work well with a contractor and/or architect.  Also, what gets you the most bang for your buck, and cost estimating and budgets.  She talks about contract structures (I spoke about that in a previous post), putting the contract out to bid, insurance, rules for change orders (there are 4 kinds), permits and the way to monitor your project.  Her advice is invaluable and will save you both time and money.  And hopefully, you (and I) will be a more educated homeowner, and wind up with a project that runs much more smoothly than it would have.

Enjoy the sunset.

 

Sunset on the Little Choptank River

Sunset on the Little Choptank River

Ten Things to Discuss with your Contractor

July
24
2013

I saw an article on Houzz today, written by Anne Higuera CGR, CAPS, that I thought was very germane to my blog. She lists things to discuss with your contractor before you start any job, big or small.  People wrote in to add their own suggestions, like discuss his or her clean up policy, and ask who will be responsible for minor fixes if any damage occurs during the job. Some people suggested discussing on-site ”behavior”, one crew brought their dog to the site, and others arrived at 6 a.m., and of course we’ve all had the workers who blast the radio the minute they arrive.  All touchy subjects, but if they are of concern to you, discuss them up front.  The main suggestion was the most important, I think: KNOW your contractor.  Get his license number and insurance number.  Get referrals and call them up! Check if your state posts licenses and complaints, see if you can learn anything there. You will have these people around for a while, and if you’re building a house, like we will be, they will be around for a long, long time.  Discussing issues up front, or as soon as they come up will go a long way to having a smooth, successful reno or build.  Here is Anne’s article:

Remodeling or building a new home is a big financial and emotional investment. It can also be a big investment of your time if you want to be closely involved in the decision-making. Knowing what to expect before the project gets started will help you better prepare for the process. Here are 10 questions you should always ask your contractor before starting a home remodeling project.

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1. What is our schedule? A schedule is more than   just a start and end date. Having a schedule that outlines tasks and timing   will give you a big-picture view of sequencing and deadlines for things such   as tile and countertops. It will also give you a benchmark so that you know   if things are slipping by a day or two.With small projects such as kitchens and baths, schedule is everything. The   cabinet lead time determines the start date and sub-trades need to be scheduled in quick succession, for instance. Don’t start without a schedule that tells you what days and times workers will be on site.

2. Who will be here every day? Depending on the size and structure of the company you hire, the answer could vary widely. Many remodelers use a  lead carpenter system, where a staff member (sometimes called a superintendent) is responsible for day-to-day work on site, and often swings a hammer as well. Ask your contractor direct questions about who will be responsible for opening and locking up, who will supervise subcontractors on site and who to call on a daily basis with any questions.

3. How will you protect my property?This is a conversation best had before demolition, not after you come home and find dust all over the house.There are a number of dust-containment measures that can be taken, and talking about it ahead of time will provide you will a clear idea of how the construction area will be cordoned off from the rest of your home and how you’ll be able to move through your house.

There’s also the issue of stuff — all the books, furniture, drapes, delicate vases and paintings on the wall.It’s helpful to remove them all from the construction zone. This includes anything hung on walls or sitting on shelves in adjacent rooms, since they can shake loose from persistent hammering.If you leave them as-is, it will cost to have them moved and moved again to keep them out of the way, and you risk damage in the process.It’s better to move it all at once and know it’s safe and sound.

4. How will you communicate with me? With every   mode of electronic communication at your fingertips, you may have some ideas   about how you would like to receive information about your project. Your   contractor likely has specific ways he or she likes to communicate, too — daily emails, cloud-based schedules or maybe just phone calls.Make sure you   understand how you will be contacted and receive information. If the contractor’s format doesn’t give you what you think you’ll need, agree on a   method and format so that you’re not in remodeling limbo on a daily basis.   Weekly meetings at a specific time are an effective way to make sure you see   your contractor in person to get your questions answered.

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5. What part of my project concerns you? There’s always something unknown about a project, or an area that is most likely to trigger an immediate change order. Odds are, your contractor already knows what that is. Talking about it upfront and running some worst-case-scenario numbers or doing some early, selective demolition to get more information could be the best way to get a handle on what may be ahead.

6. What will happen if there is a change order? Change orders can be easily handled in your construction contract. A common way to document change orders is in writing, where the change in scope of work and the price are noted and signed by the client and contractor. Some contracts also note the change in schedule, if applicable. Make sure you have a plan in place to document the unexpected and expected changes that happen along the way.

7. How will you let me know I need to make a decision? There are many ways to organize a list of decisions — from spreadsheets, to lists, to notes on a calendar. But all of these methods focus on the same outcome: giving you clear direction about what and when you need to make a decision on something. Asking for a list and deadlines will help you keep organized and ensure you are able to shop for materials and make decisions in time to meet your contractor’s schedule.

8. How do I reach you after hours? Knowing how to reach your contractor on an emergency basis is just as important as your contractor being able to reach you. Exchange all your numbers — work, cell and landline — so that contacting each other won’t be a crisis in itself.

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9. When do I need to be available to meet? Even if you set up a regular weekly meeting, there may still be necessary additional meetings.We usually schedule an electrical walk-through on the day the electrician sets boxes and can lights so that everyone can review their placement and function before wires are run. Another key day is when the tile-setter works on layout .There are a number of ways to set tile, and having an on-site meeting is the best way to make these decisions. It’s also possible to have your architect or designer attend those meetings in your place.

10. What kind of documentation will I receive when the project is done? Contracts frequently call out end-of-project paperwork — lien releases, marked-up plans with as-builts on plumbing and other utilities, copies of inspection reports, etc. But there may be additional items you will find valuable: a full set of mechanical photos before insulation is installed, the operating manuals for installed equipment (and a personal lesson in their operation if you don’t know the basics), a list of subcontractors and contact info, care for things such as countertops and tile and a well-marked electrical panel. Confirming that you will receive these things before you get started will help ensure   that you finish the project with all the information you need.

 

We were very happy with our builder for the garage and crab shack, but since then he and his family decided to move to Vermont!  So, when we start the house, we will be back to interviewing and vetting new contractors, and this information will be extremely handy.

Do you have any other advice, or any good (or bad) stories about your contractor to share?  We’d love to hear them.

 

Builder’s Contracts

July
15
2013

When we first decided to build our retirement house, we were sort of naive.  Sure, like most people, we’ve had some construction done on the different houses we’ve lived in, some renovating here and there.  But a whole house?

In our case, we started with the garage, then went onto the “crab shack”- which of course is a house, although a small one.  It was a good thing actually  that we did do our plan that way, because when we start on the house – probably next year -  we will be so much wiser!

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We didn’t realize, for instance, that there are different kinds of contracts you can negotiate with a builder.  According to Amy Johnston in her book, “What Your Contractor Can’t Tell You,” (a book I will be reviewing soon), there are about 5 or 6 different types, but to me, many are the same as each other, and some aren’t really “contracts”- but ways of building your house, such as Design/Build – which is you go to one company and they do it all, from designing the house to building it.  Or Modular Construction, where you buy from a manufacturer that builds the house in a factory, again, an option for building, but to me, not a contract with a builder to stick-build your house.  Another option Ms. Johnston mentions is Build-to-Suit.  This is where you buy a developer’s lot, usually in a community, and have a choice from houses that the developer builds.  You can customize it a bit, but basically the plan is already set.  Two that come to mind that are this type are Toll Brothers, and K Hovnanian Homes.  But again, this doesn’t seem like a “builder’s contract” to us.

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For the way we want to build, there are two kinds of contracts; Time and Materials, and Fixed Bid. (Meaning we come up with the plans for the house, either from online or have a draftsperson or architect do them, then interview a few different builders, then have each one come up with a price for building the house.)

The Time and Materials type of bid, in our opinion, mostly favors the builder.  It basically is based on the number of hours it will take the builder to finish the project, plus the cost of the materials you specify. The small advantage for the owner is that he will pay for only the actual time worked.  Some of these contracts come with a guaranteed maximum price (GMP) which is a little help for the homeowner.  It specifies the contractor agrees not to go beyond a certain price. The builder may then have allowances for any unknown issues.  Also, a time limit may be written in to the contract, and the builder actually has to pay you if the job takes much, much longer than written into the contract.  Not one builder of the many we spoke with agreed with that portion of the contract.  There are too many variables to predict a building timeline, but I guess if you had to be out of your present place and into your new place, this might be an option you would want to think about adding in.

We actually used the Time and Materials contract when we had the garage built.  And believe it or not, the project came in under budget.  However, it is only a garage… and there aren’t appliances in there that I would want to upgrade, a situation that is all too common when building a house.

We also used it with the Crab Shack, since it had gone so well with the garage.  Well, this was a completely different story, and also the reason why we would not use a Time and Materials contract again.  Yes, we upgraded things as we went along, something we realized always happens.  Really, always.  Then, parts of the metal roofing were missing, and the first go-round they sent the wrong thing.  But our builder had his guys working on it, installing it before realizing it wasn’t the right pieces, and of course, we paid for that time.  Other situations like that happened.  Time adds up very quickly and adds a lot to the total cost.

The Fixed Price Bid includes the cost of performing the work, purchase of materials, plus the mark-up for overhead and profit. With this contract, we feel the advantage is more with the homeowner, since you know the cost up front, and no matter how long it takes the builder to fix issues, the price stays the same.  The disadvantage for the builder is if the job runs long, or if he has underestimated the cost.  If you have a good relationship with your builder and trust him or her, this won’t be an issue, but some contractor’s have been known to use lesser grade materials than stipulated to save costs and increase profits.  No matter what, it helps to be on site regularly to check on the work.

Stipulations can also be built-in to this type of contract, for instance, the specific schedule, or a reporting schedule, where the builder sends regular updates on work completed and even pictures.  We did this with the Crab Shack, but we plan to be living IN the Crab Shack while the house is being built, so we’ll have the advantage of seeing what’s going on every day!

With this Fixed Price Bid, the builder gives you “allowances” for your appliances and other items that must be decided upon.  I have to admit, I didn’t get what this meant at all.  I figured, it’s our money, why does the builder give me an allowance?  But I found out that you let him know up front the range you are willing to spend for your appliances, etc. and after he quotes a total price,  then he lets you know later how much you have allotted for those appliances.  I know, still kind of sketchy.  Say for instance, you specify, “medium grade granite” for the countertops, then later, when the kitchen is ready to be built, he tells you how much money you can spend on the countertops.  I guess it’s helpful, but when you go to actually chose the granite (or whatever), that’s when you (meaning I) usually decide to upgrade.

Here is the first draft of our house plans.  We’ve changed it twice already, and we already have some more changes to make.  We’ll probably do that another time or two before we’re ready to build.  You always think of things later that you should have added, or taken away, and we have the luxury of having the time to come up with the best plans we can.  And get the best contract we can.  The more decisions you have made, the better.  For you, and for the builder.

floor_plans_1st_lookI’d love to hear some of your stories, good and bad, about builders, and contracts, or your house plans and designs. Send me a comment and we’ll chat.

 

Burning Down the Barns

April
24
2013

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You may remember that we had two old barns, in addition to the house, that needed to come down.  Because of zoning and building laws, which we’ll get into in another post, the main house has to stay until we are actually ready to build the “new” main house.  But these two barns we wanted to get rid of right away so we could put up a new garage, and a guest cottage, which we thought of at the time as the boat house.  Not really a boat house to house a boat, but we liked to call it that anyway.  As it turns out, the plans and cost of that boat house became so astronomical, we had to change it all completely, and we would up with what we now term, “The Crab Shack.”  But I digress…

The two barns were, to say the least, disgusting.  I don’t know why I don’t have pictures of the inside because I usually take pictures of everything! (Like the shed snake-skin I found in a bush– in its entirety!  I thought it was amazing, although nobody else but John thought it was impressive.)

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Anyway, we had a dock builder over to give us a quote, (hey, we all have our priorities) and the guy gave us a wonderful tip…. the fire department in town would burn down both buildings for a nominal fee, and use it as a learning experience for the new recruits.  We thought that was a great idea!  As it turned out, our builder/contractor did have to tear down one building because the fire would have been too large!

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So, the first building comes down.  Then it got pushed over to the other one.  The fire department showed up very early one morning.

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And started the blaze.

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They were all ready with hoses in case it got out of control.  They had to monitor the weather of course, we didn’t want a windy day!  And here it is full-out…..

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It’s all over…..

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Next, we’ll start building the garage!