When homeowners Don and Mary decided to turn an unfinished attic into a second floor with three bedrooms and a bath in the summer of 1997, they did everything they could to find a reliable contractor. Or so they thought. But despite their best efforts, what was supposed to be a 90-day project turned into a more-than-year-long nightmare fraught with scheduling dilemmas, billing problems, a holiday season theft and threats of legal action.
“We asked six contractors to bid on the job, got four bids, and went with the second lowest one,” says Don, a homeowner in the western suburbs who requested anonymity. “We got references, called them and everything seemed legitimate. Everybody had good things to say. We had a lawyer look at the original contract and had our insurance person look it over to make sure the contractor had enough insurance. We hired a contract administrator who is basically supposed to work as your representative and help you communicate with the contractor. We did a lot of due diligence.”
It wasn’t enough. The project was behind from the beginning, and the relationship between the contractor and subcontractors was not going well. “We started to hear rumblings that fall from the subcontractors that they weren’t getting paid. Then one of the subs quit and started calling saying we should pay him directly because the contractor owed him money. That’s when things really started to unravel.”
Then there was the December 1997 theft that left the family without their home electronics and presents at the height of the holiday season. Though no one ever proved it, investigators “strongly suspect” it was an inside job, Don says. “When the investigating officers did a background check, they found out I’d had guys in my house with [criminal] records.”
Things only got worse. The contractor began “moving out of the picture more and more,” and workers were showing up “in drips and drabs” into February 1998. “At that point, the whole center area of our house was unheated, rain was coming in, and we were very concerned about all the debris and dust. Our children were 2 1/2 and under 1 at the time,” Don says.
After an unsuccessful attempt to work things out through the contract administrator, the homeowners contacted a law office that specialized in contract and construction law. “They felt we were getting screwed and that the administrator wasn’t working on our behalf,” Don recalls. “We knew we couldn’t go on like that, so we looked around for another contractor and had a couple people come bid.”
The weekend before Labor Day 1998, almost a full year after the original project started, the attorneys fired the general contractor and administrator. “The other contractor was great and got the job done in a short period of time,” Don says.
Not every renovation goes so wrong. But when embarking on a home improvement project, you should take precautions to avoid mistakes that could cost you your savings and your sanity, industry experts say.
One of the biggest mistakes is putting price above all else when choosing a contractor. “The one resounding theme we’ve heard over the last 22 years is, ‘We took the lowest price and now have to live with regrets or have it redone,”‘ says Dave Brady, owner of Oak Design & Construction, a design and build contractor based in Oak Park. “Price is an element of it, but when you make price the priority you tend to miss other things.”
“Never take the lowest bid?there’s usually a reason why,” echoes Barbara Ling, author of “Avoiding the Contractor From Hell,” a book Ling wrote after losing $26,000 as a result of remodeling ripoffs (order from www.contractorhell.com). “What if your low-ball contractor comes back in the middle of the job and says, ‘Oops, I goofed on the estimation?’ He’s already started your job. Do you want to deal with the stress of firing him and starting your contractor search again? Sometimes a low price is truly honest. But never, never, never choose someone just because of a low price.
You’ll end up paying thousands to fix mistakes later.” Electricity and plumbing, for example, are two important and costly elements frequently left off of low bids. “That’s especially true in old houses,” Brady says. “If you’re doing a kitchen, all the wiring should be replaced because of new codes and the electrical demands of new appliances.
And if you’re doing a bathroom, ask if the estimate is just for new fixtures or for replacing all the old plumbing.”
Price also comes into play when selecting materials and products. Picking inferior products to save money, in fact, is one of the classic mistakes homeowners make, according to the National Association of the Remodeling Industry. “You don’t want to cut corners in the hopes of saving a few dollars and put quality at risk,” says spokesman Brett Martin.
The following tips will help you dodge project pitfalls and get the most for your remodeling dollars, the experts say.
Make sure the contractor carries enough insurance. If your contractor doesn’t have workers compensation, liability and auto insurance, you could be liable for any accidents that occur. “Say a subcontractor hires a guy who gets in a wreck or drives through a wall at your house. If the contractor doesn’t have [appropriate] insurance, you’ll have to cover it,” Brady says.
To verify coverage, ask for copies of the contractor’s insurance certificates, NARI advises. Some states, including Illinois, also require licensing and registration. So ask for your contractor’s registration and license, then confirm the license number and expiration date with your local jurisdiction, information from NARI says.
Check references very carefully. “If you’re invited to look at a contractor’s projects, try to make sure they really are his projects. He could be sending you to his friends’ homes,” Ling says. Though she acknowledges that it is very hard to do, she suggests checking with neighbors to see if they remember the contractor who worked on the project. You also could contact your municipality to see if the contractor had permits out on the project, she adds.
When talking to references, ask if the project started and ended on time; how the contractors and subcontractors treated your property and your family; if they stuck to the budget or added extras that should have been included in the original price; if the products selected met expectations; and how conflicts were handled if they arose, Brady advises.
You also should ask for professional references from suppliers or subcontractors to verify sound business practices and to make sure there are no liens for nonpayment, according to Martin, of NARI. “One good way to check on the contractor is to visit local lumber yards or supply houses to see if the contractor has good credit with them,” Ling says.
Make sure you understand the contract. “A contract should include a comprehensive description of the project, a payment schedule, a timetable, and the types of products that will be used. The responsibilities of the contractor and any subcontractors should also be detailed,” Martin says. “A contract also needs to list provisions for warranties, changes in procedures, and in case problems arise, alternative dispute resolution clauses.”
“Make sure everything is stipulated in the contract,” Ling concurs. That includes even small things like who will move furniture. “Workers might come in and say, ‘Why haven’t you moved the stuff in your living room out? That will be an extra $100.00 for us to do it,”‘ she says.
Ask how long the company has been in business and what percentage of the business is repeat or referral. “This will give you a good indication about the company’s customer satisfaction,” says Martin, whose research shows most remodeling businesses attribute more than 50 percent of their annual volume to customer referrals.
Document everything. “Make sure every decision is documented in writing,” says Don, who thinks he might have avoided some of his remodeling headaches by documenting more. “Note progress on a regular basis, maybe even videotape it and tell what day it is and what was done.”
Follow your instincts. NARI says the most important question to ask before signing on the dotted line is, “Do I feel comfortable with and trust the person I am about to hire.”
“If your intuition tells you there’s anything to be suspicious of, don’t disregard it!” Don concludes.
For more information about selecting a contractor, visit NARI’s website at www.nari.org.
