1. How to Avoid a Remodeling Nightmare
Presented by:
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2. Key Process for Success
Interview a Remodeling Professional
Proper Planning
Well Written Contract
Avoiding Misconceptions
Planning: Think your remodeling project through from start to finish. Careful planning of your home improvement projects will enable you to update your home, increase the value of your investment and customize your living space; all for a lot less than the cost of a new home. Look over your property carefully. What repairs are needed? What improvements would you like to make? Think ahead and determine your future needs. Professional remodeling contractors can help you in your planning by outlining options and discussing the improvements you can make within your budget. Be sure to review your homeowner’s insurance policy and make adjustments for the added value of the work being done.
The following questions will help you establish a company's qualifications and reputation, and help you find the right person for your job.
How long have you been in business? Look for a company with an established business history in your community. Surviving in any business in today's competitive marketplace is a difficult task. Most successful contractors are proud of their history in the industry.
Who will be assigned as project supervisor for the job? Also ask whom you should contact if the supervisor is not available. Get exact names and contact phone numbers for all persons who will be involved in the project.
What is the time frame for starting the project? Now is the time to ask questions about work schedules. You should ask: What is your estimate for completion? How early will your crew normally begin work? When will they normally quit for the day? Will I be contacted about delays or changes in the schedule? By whom?
What is your approach to a project of this scope? This will give you an idea of how the contractor works and what to expect during the project. Listen carefully to the answer. This is one of the big indicators of the company's work ethic.
How do you operate? In other words, how is your firm organized? Do you have employees or do you hire subcontractors? If you do have employees, what are their job descriptions? Do you use a project supervisor or lead carpenter to oversee the project? Other firms will have additional positions. You should know what parts of your project will be handled by staff, and which will be contracted out to independent contractors.
Is your company a full service or specialty firm? If you are planning a small project, say replacing the bathroom plumbing, you may be better off hiring a specialty plumbing firm or a bathroom remodeler. However, if your project involves multiple changes, entire rooms or additions, you should consult a full service or design-build firm.
Do you have design services available? If you are considering a large or involved project, you will need design services. If the contractor does not have design-build capabilities, you should consider hiring an architect. Depending on the size and scope of the project, you may need an architect or structural engineer.
Does your company carry workers compensation and liability insurance? Ask for copies of the insurance certificates to verify coverage. In addition, some states require licensing and registration. If your state does have construction licensing laws, ask for your contractor's registration and license, then confirm the license number and expiration date with your local jurisdiction.
Are any of your company's employees certified? Trade certifications are good indicators of dedication, professionalism and knowledge of the industry. Remodelers are required to meet certain industry criteria to maintain their certifications. NARI offers six designations: Certified Remodeler (CR), Certified Remodeler Specialist (CRS), Certified Remodeler Associate (CRA), Certified Kitchen & Bath Remodeler (CKBR), Green Certified Professional (GCP), Certified Lead Carpenter (CLC), and Certified Remodeling Carpenter (CRC).
May I have a list of references for projects you have completed which are similar to mine? The contractor should be able to supply you with a minimum of three references, including names, telephone numbers and addresses. As a follow up to this question, ask how long ago the project was completed and if the contractor can arrange a visit to see the finished job. You should also ask for professional references from suppliers, financial institutions, or subcontractors to verify sound business practices.
What percentage of your business is repeat or referral business? This will give you a good indication about the company's customer satisfaction. According to research conducted by NARI, most remodeling businesses attribute over 50 percent of their annual volume to customer referrals; some even claim up to 90 percent or more of their total annual sales.
How many projects like mine have you completed in the past 12 months? This will help you determine the contractor's familiarity with your type of project. You should confirm that a good portion of those completed projects were similar to the type of project you are proposing.
Will we need a permit for this project? Most cities and towns require permits for building projects. Failure to obtain the necessary permits or to arrange obligatory inspections can be illegal. In some cases, if a project violates a zoning law or some other regulations, it may even have to be demolished if there is no way to comply with the law. A qualified remodeling contractor will be conscious of the permit process, and ensure that all permits have been obtained before initiating any work.
May I have a list of your suppliers? You may want to add calling the contractor's suppliers to your list of follow up actions. This will help protect you from mechanics liens for nonpayment by the contractor. Suppliers also can be a source to establish credit history for the company.
Of the many questions you can ask during an interview, the most important question is one you must ask yourself: "Do I feel comfortable with and trust the person I am about to hire?" Your answer to that question should make the hiring decision a little easier.

3. Interviewing a Remodeling Professional:
Check out the candidates.
Ask who will be in charge of the project and communication.
Request references.

4. Proper Planning Remodeling project budget.
Have a clear idea of what you want.
Realistic time frame for the project.
Select the right type of professional.
Budget: How Much Can You Afford?
This question alone is enough to strike fear into anyone's heart. The truth is not many people enjoy establishing a remodeling budget-and many just don't. Many homeowners prefer to call a remodeling contractor and expect him or her to create the budget for them, which is not the best way to begin. How do you start off right? You can begin by taking these four easy steps in the right direction:
Step One: Decide how long you plan on staying in your home. The length of time you intend to stay in a home will affect how much money you should invest in it. If you are going to stay in the home for more than ten years, you should spend as much as you are able to create the home of your dreams. However, if you are planning on moving in the near future, you should take care not to over-build for your neighborhood. Look into the real estate comparisons for your area and keep your investment in line with the average home sales price. You don't want to invest thousands of dollars you won't be able to recoup at closing.
Step Two: Make a list of all your debts. You should include any debts you pay on a monthly basis, such as mortgages, car loans, credit cards, and any other items with a fixed monthly payment. This list should not include payments for groceries, utilities, telephone services, or other general expenses. Call this list your monthly expenses.
Step Three: Determine your total gross monthly income. Include all sources of income that you would list on a loan application.
Step Four: Complete the following worksheet to determine how much you can afford to pay for your remodeling project on a monthly basis. These formulas are used when the remodeling project is going to be financed.
Type of Pro: The General Contractor
Many home improvements may not require professional
design services and can be handled by an
experienced remodeling contractor. Again, be sure
to deal with a professional. Even small jobs need
careful planning, as their successful completion is
important to you.
The Design/Build Contractor
Design/build is a concept developed to benefit the
homeowner with his or her remodeling project
by providing both quality design and construction
services within the same company. A design/build
contractor will be able to see your project through
from start to finish, keeping design, engineering and
budget in mind.
The Architect
Major remodeling projects require construction
drawings to define contracts and permits procurement.
If your professional remodeler does not provide design
services, you can use a professionally trained architect.
It is best to work with an architect experienced in
remodeling, as he or she will be more sensitive to the
special challenges that remodeling
represents.

5. Well Written Contracts Include:
Contractor’s Name & Contact Information
Detail Outlining what will and will not be done.
List of Materials
Clear Financial Terms
Warranty Information
A Binding Arbitration Clause
Ensure ALL Requests are in the Contract
NEVER SIGN AND INCOMPLETE CONTRACT
Contract:
Be sure the contract includes the contractor’s name, address, phone and license number (if applicable). A contract should include detail about what the contractor will and will not do.
A detailed list of materials for the project should be included in your contract, with information such as size, color, model, brand name and product.
The contract should include approximate start and completion dates.
Study the design plans carefully. Insist that you approve them and that they are identified in your written contract before any work begins.
Known as the “Right of Recision,” Federal law requires a contractor to give you written notice of your right to, without penalty, cancel a contract within three business days of signing it, provided it was solicited at some place other than the contractor’s place of business or appropriate trade premises.
Make sure financial terms are understood and spelled out in the contract. The total price, payment schedule, and any cancellation penalty should be clear.
A warranty covering materials and workmanship for a minimum of one year should be written into the contract. The warranty must be identified as either "full" or "limited." The name and address of the party who will honor the warranty (contractor, distributor or manufacturer) must be identified. Make sure the time period for the warranty is specified.
A binding arbitration clause is also a good inclusion in the event a disagreement occurs. Arbitration may enable you to resolve disputes without costly litigation.
Thoroughly review the entire contract and be certain you understand it before signing it.
Consider the scope of the project and make sure all items you’ve requested are included. If you do not see a specific item in the contract, consider it not included. Never sign an incomplete contract. Always keep a copy of the final document for your records.

6. Avoiding Misconceptions
Don’t just believe what the contractor tells you.
Going with the lowest price saves your money.
Misconception Number One:
Don't just believe what the contractor tells you. This is a common and often costly mistake. Make him show you! Many contractors tell you they are members of organizations, but they have no proof of it. If they have no proof, you need to investigate the company further. Don't ever make a decision just based on the contractor's hearsay.
Reputable contractors are normally members of:
Local, State and/or Regional Builders' Associations
Area Chambers of Commerce
Michigan Association of General Contractors
Misconception Number Two:
Going with the lowest price saves you money. No, not necessarily! Everyone tends to look for the lowest price. On a low estimate, you must ask yourself, "what is being left out", or "what shortcut is being taken"? Everyone wants three things whenever they are making a purchase: (1) Low Prices, (2) Best Quality, and (3) Best Service. It's impossible to get all three, hence the old adage, "you get what you pay for". You must ask yourself, "Which of the three am I willing to give up?"

7. You’ve Chosen Your Contractor. Now What?
Make a phased list of procedures
Have the contractor explain the timeline
Plan adequate storage space
Post the contractor’s phone number by your telephone
Delegate only one family spokesperson
Try to stay out of the project area.
But your job doesn't end there. You can do other things to ensure smooth sailing:
Make a phase list of procedures. Have the contractor explain what work will be done so you'll know the time needed for what's involved.
Plan adequate storage space. Make room for materials, tools, and equipment by clearing work area of unnecessary gear.
Post the builder's phone number by your telephone in case a question arises during construction. To avoid confusion, delegate only one family spokesman.
Consider the logistics involved in delivering, shipping, and ordering materials and making the best use of the tradesperson's time and skill. Your contractor is as anxious as you are to finish the job. Allow a margin for human error or for simple forgetfulness.
Double-check materials as they arrive. Once installed, they're all yours. You can cut down last-minute decisions and delays by selecting the materials in advance.
Check locks and keys. You'll probably need to share keys with the contractor or his or her workers. Ask who will take responsibility.
Try to stay out of the construction area. This is important for safety and for maintaining construction schedules. Keep pets, toys, and children out of the workers' way.

8. You’ve Chosen Your Contractor. Now What?
Expect the unexpected.
Remember, remodeling proceeds in stages.
Separate crews install framing, siding, insulation masonry, finish carpentry, and roofing. Crews may all have to make several trips to complete their tasks
The schedule is complicated, disruptions occur
Cover furniture and carpeting
Stay calm
This is important for safety and for maintaining construction schedules. Keep pets, toys, and children out of the workers' way.
Expect the unexpected. No one can prepare you for all the unforeseen incidents that may transpire. It's hard to imagine all the things that could go wrong: late deliveries, strikes, shipment shortages, wrong parts, oversights, rain, on-the-spot changes, etc. Tearing down a wall may uncover a problem that demands plan revisions.
Brush up on building methods. A little construction savvy will help see you through those blue days when workers fail to show up. Could that happen? Yes, you'll find that remodeling proceeds in stages. Separate crews install framing, siding, insulation, masonry, finish carpentry, and roofing. Painters, electricians, and plumbers may all have to make several trips to complete their jobs. Slabs must cure, paint must dry, etc. The schedule is complicated, so don't be surprised if disruptions occur.
Workmanship. Expect the highest of industry standards of quality workmanship. However, don't expect to get too much more than you're paying for.
Batten down your belongings. Cover furniture and carpeting. Use this time to have your draperies and upholstery cleaned. You won't believe the dire and dust remodeling creates. Your professional NARI contractor will also help you to cover and protect the work area.
Be cool. Keep calm and flexible. Time-clocking workers only builds resentment and won't save a penny or speed up work.
Win cooperation from workers and contractor with good, basic human relations. Nothing makes them work harder than a word of appreciation or an unexpected pot of coffee.
Swallow those endless "why's" that slow down production. Most workers are simply following our orders and construction specs. Discuss construction changes only with an authorized professional NARI contractor.
Plan ahead to do without water or power when workers shut off lines. That way you'll avoid food spoilage in your refrigerator because of an unexpected power shut-off.

9. Know a Budget Buster When You See It
Two main reasons for busted budgets:
Changes
“Whileyas” (that handy little phrase that often spills out of a homeowner's mouth, "While you're here, could you just...")
Determine how changes will be handled before the project starts and include the procedure in the contract. This will help keep change orders to a minimum.
Realize that any work not specified in the original contract will have an additional cost attached to it. Contractors find that "whileyas," can represent up to 10 percent of their total annual volume. If you do find additional work you would like your contractor to do, by all means discuss it with him or her. However, you should approach the "whileya" job as a new project and ask for the contractor to draft another project plan and contract for that particular job. This will prevent you from making an uninformed decision, and also give you time to carefully consider the new project.
Remodeling often has a domino effect which causes "Whileyas" to happen: You see one room being transformed and decide that the room next to it doesn't match anymore. Next thing you know, the hallway looks dingy and needs some fixing of its own. And so it goes throughout the house. This phenomenon can turn into an enormous budget buster if not kept under control.
Finally, stick to your original plan. If you decide that your budget is "x" and your reserve fund is "y," tell your contractor to work within those figures. It is easy to say, "A little more on this faucet won't matter. It's a small amount of money." Unfortunately, this is a close cousin to "whileya" and another easy way to overextend your budget.

10. Thinking of Doing it Yourself (DYI)?
Only if you’re ready!
Do you enjoy physical work?
Are you persistent and patient?
Will you be able to find time to finish the project?
Do you have all the tools needed? The skills?
Do you know the safety procedures for this project?
Do you enjoy physical work?
Are you persistent and patient?
Do you have reliable work habits—meaning that once the project is started, will it get finished?
Do you have all the tools needed and, more importantly, the skills required to do the job?
What quality level do you need for this project? Are your skills at that level?
Do you have the time that will be required to complete the project? (Always double or triple the time estimated for a DIY project, unless you are highly skilled and familiar with that particular project.)
Will it matter if the project remains unfinished for a period of time?
Are you prepared to handle the kind of stress this project will create in your family relationships?
Do you know all of the steps involved in the project?
Have you gotten the installation instructions from the manufacturer to determine whether this is a project you still want to undertake? (Most manufacturers will send you installation instructions before purchase to determine whether the product will meet your needs.)
Is this a job you can do completely by yourself or will you need assistance? If you do need assistance, what skill level is involved for your assistant? If you need a professional subcontractor, do you have access to a skilled labor pool?
Are you familiar with your local building codes and permit requirements? (Some jurisdictions require that the work be completed by a licensed professional in order to meet code. It is best to check these requirements before beginning work on the project.)
What will you do if the project goes awry? (Most contractors are wary about taking on a botched DIY job, and many just won't take them.)
Is it safe for you to do this project? (If you are not familiar with roofing or do not have fall protection restraints, you may not want to venture into a roofing job. Similarly, if you know nothing about electricity—leave it to the professional. Some jobs can be fatal if not performed correctly. Your health and safety should be the primary concern. Never enter into a DIY project that would jeopardize those.)
Will you be able to obtain the materials you need? Who will be your source of supply? Will they deliver?
Are you attempting to do-it-yourself for financial reasons? If so, have you looked at all of your costs, including the cost of materials, your time, and the tools you need to purchase? If you are new to the DIY game, you may also want to look at the cost to correct any mistakes you may make—i.e., the damage factor. Will it still be a cost-saving venture?
If you are trying DIY for the satisfaction of a job well done—can you ensure that the job will be "well done"? If it doesn't come out right, how will you feel? Will you be able to afford to redo any unsatisfactory work?

11. What is NARI?
The only trade association dedicated exclusively to the professional remodeling industry. 8,000 member companies representing thousands of professionals throughout the U.S. with more than (##) member companies in the (your city) area.
Outside of buying your home, remodeling that home may be the single biggest investment you make. You need to know that the remodeling contractor you choose is a full-time, dedicated remodeling professional. NARI's screening process offers this assurance, and what's more, NARI Members voluntarily follow a strict Code of Ethics.

12. Who are NARI Members?
Members include general remodelers, specialty contractors, designers, service suppliers, financial institutions, architects, media and government agency representatives.
You can be assured that when you hire a NARI Member, you are hiring an individual who has made a strong commitment to the professionalism of the remodeling industry and to his or her business.  
Look for this Logo!

13. How to Find a NARI Remodeler Member?
Use the NARI Find a Remodeler Search Tool at NARI.org NARI Members meet the association's stringent criteria for experience, and pledge a commitment to high standards of practice and NARI's Code of Ethics.

14. NARI’s Code of Ethics
Each member of the National Association of the Remodeling Industry is pledged to observe high standards of honesty, integrity and responsibility in the conduct of business by:
Promoting only those products and services which are functionally and economically sound, and which are consistent with objective standards of health and safety;
Making all advertising and sales promotion factually accurate, avoiding those practices which tend to mislead or deceive the customer;
Writing all contracts and warranties such that they comply with federal, state and local laws;
Promptly acknowledging and taking appropriate action on all customer complaints;
Refraining from any act intended to restrain trade or suppress competition;
Obtaining and retaining insurance as required by federal, state and local authorities;
Obtaining and retaining licensing and/or registration as required by federal, state and local authorities;
Taking appropriate action to preserve the health and safety of employees, trade contractors, and clients.

15. For More Information Visit:
NARI.org

16. Questions?

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