Depending on the type of home improvement project you are considering, you could be setting yourself up for a hefty price. Even when doing the project yourself, although you will save money, the price of the project could still be high. For hiring contractors, the cost can be substantial.
There is nothing greater than having a beautiful home but you need to plan carefully from a financial perspective to ensure you are prepared for the labor and materials needed for your project. The first thing is to shop around for the right contractor. You should interview a number of contractors to find the one that is most qualified for your job and who charges a fair price for the work.
If you are planning to build your own home or take on a major construction project, there are definite advantages in being your own contractor. Typically, this will save you from 25% to 30% of the total cost and you have more control over the decisions. However, there are disadvantages that include having the full responsibility of getting all the workers to show up on time, battling over costs, and prioritizing the various types of work to be done.
If you choose to do your own contracting, you will be responsible for the schedules of all the workers and all the materials used. While some workers will show up when they are supposed to, many do not. When this happens, the entire schedule snowballs and is off. Therefore, you need to make sure you work out the workers� schedules and the supply deliveries.
Your best option is to start shopping around for materials well before you start your planning to build. Talk to lumberyards, other contractors, and home improvement stores and compare prices and their schedules. Once you find a company that is willing to give you the best price and work with your schedule, you can then start thinking about the actual building.
You will also need to stay on top of changes, as it will change your time and can cost you money. Be sure that each day the debris is cleaned up from the site as well. While this may not sound like a big deal, it can be. The more you let debris pile up, the more money it will cost to have it cleaned up and hauled away.
You will also need to choose a lender to support your project. To avoid extra fess, you want to work with a banker or lending institution that can manage your home mortgage loan and your construction loan. In most cases, you will get a break on fees and interest rates.
Remember that you need a sworn construction statement, which will be an itemized list of exactly what it will cost to build your house of finish your project. Once you have this breakdown, you can start receiving bids from subcontractors and suppliers. Keep in mind that most banks will ask that you round the bids received up to ensure you build your home for money that you are asking to borrow. Once your loan applicant is approved, the construction loan is finalized and you are ready to start working.
Typically, you will never see the money since the bank will assign a title company to pay the bills. This is a great tool in that the bank can verify the bid to the work done to ensure you are only paying what you should be paying. Additionally, all lien wavers are collected by the bank. The bank does not pay more than they should and you get your house built or project completed to spec.