Model Remodelers

When a burst pipe flooded her beach condominium, Anne Van den Berg of College Park turned for help to her neighbor, a man who assured her he was experienced in repairing water damage.

"I trusted him," Van den Berg recalls. "I didn't check up on him." It turned out that the neighbor was essentially a handyman who lacked a state contractor's license.

With constant prodding on Van den Berg's part, the job was completed-but many frustrating months behind schedule.

"He never seemed to be prepared for what he was going to find," Van den Berg recalls. "At every single step, we ran into delays because he was constantly surprised."

Now a veteran of six subsequent-and more successful-renovations over 14 years, Van den Berg, who has spent more than $1 million remodeling several homes, offers some hard-won advice:

"Ask to see other projects that the remodeler has done," she says. "Tour those projects. Ask to speak to the owners so that you can find out whether there were any problems."

The advice couldn't be more timely. Across the country, residential remodeling is hotter than ever. In fact, professional remodelers reported a record-breaking 2003 and lofty expectations for 2004, according to results of the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI).

The RMI is based on a quarterly survey of more than 600 remodelers, whose answers to a series of questions are used to calculate two separate indexes-current market conditions and expectations for the future.

Stephen Gidus, president of the Home Builders Association of Metro Orlando and, more to the point, the first HBA president who is primarily a remodeler, says the boom began here about 10 years ago.

"Until then, the housing stock was still relatively young and land was still plentiful closer to the city," Gidus says. "Now, growth is spread out in all directions. That's why we're having a resurgence of renovation and new construction in downtown Orlando, Winter Park, Maitland and College Park."

What kind of remodeling jobs are most popular among homeowners? The RMI also revealed that kitchen and bathroom rehabs continue to top the list, followed by additions and whole-house makeovers.

Although experts say bathroom and kitchen renovations offer the best return on your investment, some remodeling decisions aren't made based strictly on numbers.

Victor Farina of Farina & Sons in Orlando says that homeowners who are planning to stay put are usually more interested in creating a comforting, welcoming environment than in recouping their investment in the short-term.

"Over time, if you're in a good location, you'll make your money back," says Farina. "But the most important thing is creating an environment that you're going to enjoy, especially if you aren't planning a quick move."

So how do you choose a remodeler?

"Don't just look in the Yellow Pages," says Marion McGrath, who with husband Jack owns Jonathan McGrath Construction of Orlando. McGrath is chairman of the HBA's Remodelers Council. "You need a reputable, experienced remodeler who can put together an effective team."

"Referrals are especially important," adds McGrath. "Of course, you want to make sure that the remodeler you choose is a state-licensed contractor. But more important, look for someone who has had a remodeling track record-someone who has been in the trenches."

Various remodeling certifications-described elsewhere in this article-are plusses, says McGrath. But few Central Florida remodelers hold them, mainly because the required courses have not been offered here until recently.

Besides, McGrath notes, Florida's requirements for obtaining a contractor's license are more stringent than those in many states. So even if a remodeler has not obtained industry-specific certifications, the rigorous licensing process-which includes a 19-hour exam-offers some assurance of competence.

"The various certification programs are just now becoming popular," says McGrath. "I'm sure they'll eventually become more common here. But with remodeling, it's experience that you need to look for."

What should you expect to spend? There are so many variables involved in even the simplest remodeling job that guesswork is always hazardous.

That's one reason that the generally accepted "get three bids" edict isn't always applicable in remodeling, say local experts. In fact, the only time competitive bidding makes sense is when there are detailed, uniform specifications that each bidder can follow-which is almost never the case, McGrath says.

"We very rarely see that kind of preparation," says McGrath. "Most people know what they'd like to accomplish, and look to us to assemble a team that can figure out to get it done and what the cost will be."

Besides, many top-tier remodelers simply won't consider a project in which it appears that price will be the only criteria. Others will charge a fee for preparing bids and estimates, with the cost to be deducted from the final fee if the company is hired.

"It takes a long time to put an estimate together," says McGrath, whose company collects what she considers to be a nominal fee for "pre-construction services." She says preparing some estimates-a process that encompasses pricing of labor, materials, fixtures and finishes-can take 40 hours or longer.

Experts say that less qualified remodelers will always win a bidding war-although the cost to the homeowner may ultimately be much higher when inferior work has to be repaired.

So how do remodelers charge for their work? There is no industry standard, but for large jobs, many use a "cost-plus" formula, in which actual hard costs-including labor and materials-are calculated and a fixed percentage for profit and overhead is added. For a quality remodeler, cost plus 25 percent to 35 percent is typical. Others simply calculate a flat fee.

When a lending institution is financing remodeling work, the remodeler is typically paid in biweekly or monthly "draws" as work progresses. Other times, the remodeler is paid as specific milestones in the project are reached.

Whatever the case, the contract between the remodeler and the homeowner should specify how the job is priced and what the payment schedule is.

Once you've chosen a remodeler and agreed upon a price and a schedule, the fun-and the inconvenience-really begins. Van den Berg warns that regardless of the size of the job, the remodeling process can be intrusive, to say the least.

"Something to ask the contractor, if you remodel a home and plan to live in it during the process, is how can the family is going to be accommodated," says Van den Berg. "See that the contractor is sensitive to family issues-privacy, cleanliness, protecting the kids from the tools. Those kinds of issues have to be worked out in advance."

Finally, make certain to adjust insurance coverage on your home to reflect increased value as a result of improvements. If you've gotten a construction loan rolled into a mortgage, then your lending institution will require this-but even so, it only makes sense to protect your investment.

After all, it'll cost a lot more the second time around.