Remodeling
Buying an Existing Home and Making It Yours

While house hunting in Houston, you and your spouse have found the perfect home—it’s well situated close to a high-rated school district, it’s within a decent commute to your work, and its nice pool and landscaped backyard really made a lasting impression. The home will require some remodeling but not enough to stop you from moving in, and it’s available for immediate occupancy. Find out more in this section about the best ways to find a remodeling contractor, the questions to ask when interviewing a contractor and what to include in the remodeling contract. Also find out what remodeling projects in Houston provide the best return on investment.

According to the National Association of the Remodeling Industry (NARI) (www.nari.org), the remodeling market is a $275 billion industry and is expected to continue to experience significant growth. An estimated more than 1 million homes per year undergo major renovations or remodeling.

SELECT A PROFESSIONAL, RELIABLE REMODELING CONTRACTOR
Finding a qualified, professional remodeling contractor for your home-improvement project doesn’t have to be a difficult task. By following these guidelines recommended and prepared by NARI, you will be better prepared to make an informed decision that best suits your needs.
  • Employ a home-improvement contractor with an established business in your area. Local firms can be checked through references from past customers in your community or through your local Better Business Bureau. Local remodelers are compelled to perform quality work that satisfies their customers so their business can survive. In Texas, a builder or a remodeler may not construct new homes or engage in remodeling projects that change the living area of the home or that cost more than $10,000 for interior renovations in Texas without first registering with the Texas Comptroller of Public Accounts (www.window.state.tx.us). In addition to obtaining information about the builder or remodeler, the comptroller determines the physical location (address) of each builder or remodeler. The review of the registration application includes a background check for a designated individual who serves as the registered agent for the builder or the remodeler. The comptroller aggressively pursues administrative actions against builders and remodelers who fail to follow statutory and regulatory requirements. The majority of actions are the result of complaints received from consumers.
  • Ask the remodeling contractor for a current copy of his license.
  • Check with the government Consumer Protection Offices, part of the Texas Attorney General, and the Better Business Bureau to ensure that there are no complaints on record about the contractor. In Houston, the Better Business Bureau can be reached at (713) 868-9500 or www.bbb.org.
  • Ask to see a copy of the remodeling contractor’s certification of insurance for the name of his or her insurance agency to verify coverage. Most states require a contractor to carry workers compensation, property damage and personal liability insurance. Make sure the contractor’s insurance coverage meets all the minimum requirements.
  • If you solicit bids from several different home-improvement contractors, be sure they are bidding on the same scope and quality of work. Discuss variations in bids and beware of any bid that is substantially lower than the others.

WHAT ARE THE QUESTIONS TO ASK POTENTIAL CONTRACTORS?
Timing and money are the most common questions a home-improvement contractor hears, but during an interview, homeowners should be asking about credentials and verifying business practices. Instead, what is often heard is, “When can you start? When will it be finished? How much will it cost?”

These questions simply aren’t enough. Yes, timing may be “everything” in comedy, but that certainly isn’t the case when it comes to remodeling. If you are going to have a successful remodeling project, you need to learn the right questions to ask and how to ask them.

Start by asking questions about a company’s business practices and experience in similar types of project. Once you decide you want to hire a particular remodeling contractor, you can discuss when he or she can start, what time he or she can knock on your door each morning and when you will have your home to yourself again.

Following are more questions to ask:
  • How long have you been in business?
  • Who will be assigned as project supervisor for the job?
  • Who will be working on the project? Are they employees or subcontractors?
  • Does your company carry adequate workers compensation and liability insurance? (Always verify this information by calling the agency. A copy of an insurance certificate does not let you know if the policy is still current. Even if the certificate has an expiration date, you cannot tell if the insurance has been canceled by either party. If licensing is required in your state, also ask if the contractor is licensed and call to verify compliance with the law. Not all states offer or require licensing. Check with your local or state government agencies.)
  • What is your approach to a project such as this?
  • How many projects like mine have you completed in the past year?
  • Can you provide a list of references from those projects?
  • Can you provide a list of business referrals or suppliers?
  • What percentage of your business is repeat or referral business?
  • Are you a member of a national trade association?
  • Have you or your employees been certified in remodeling or had any special training or education, such as earning a Certified Remodeler (CR), Certified Remodeler Specialist (CRS), Certified Lead Carpenter (CLC) or Certified Kitchen & Bath Remodeler (CKBR) designation?

Realize that sometimes it’s not the answers you get that are significant, but what you don’t get. Asking the right questions is not enough. You need to pay attention to your instincts and to what information is missing.

Unlike an accountant or stockbroker, your remodeler will be a part of your daily life and available for some on-the-job education. He or she will be privy to your personal life, more so than your doctor or lawyer. Your contractor will know how you look early in the morning and how well behaved your dog is. It makes sense that you should take some time to carefully select this person and make sure that it is someone to whom you can ask questions.

PROPER PLANNING IS IMPORTANT
For considerably less than a new home, 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. As part of the planning process, 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 homeowners insurance policy and make adjustments for the added value of the work being done.

TIPS ON FINANCING YOUR REMODELING PROJECT
There are various financing options available to homeowners. Among the most popular is the equity line of credit that bases the loan amount on the equity in your home.

The Federal Housing Administration (FHA) has loans specifically for home improvements. They are available through many banks and lending institutions. The FHA, however, requires the lender to approve the contractor. The FHA does not guarantee the remodeling contractor’s work.

Some institutions will allow you to borrow against the anticipated equity in your home once your home-improvement project is complete. A professional remodeling contractor is familiar with financing options available and can help. Research various sources of funding to compare individual qualification guidelines, interest rates, terms and tax considerations.

THINK ABOUT DESIGN AND FUNCTION
Design and function should be foremost in your mind if you’re thinking of adding a room or converting an existing room. When planning a larger, more complicated project, give thought to details, such as intended use of the space, flow of the space, where you want electrical outlets, telephone jacks and cable hook-ups located, the type of lighting required, your current and future storage needs and whether you want to include luxury items. These details will enable your home-improvement project to better suit your needs and your lifestyle.
A professional remodeling contractor or design service should be consulted about design and function of any remodeling project. He or she also can help you with time- and money-saving hints.

COMPLY WITH LOCAL CODES AND PERMITS
Building codes have been established by most cities, towns and counties. They vary considerably from one jurisdiction to another. A building permit generally is required whenever structural work is involved or when the basic living area or footprint of the home is to be changed. Ask your real estate agent or your local home insurer about the requirements in your area.

A WELL-WRITTEN CONTRACT IS ESSENTIAL
Before any remodeling work can begin, there must be a complete contract. This holds the job together and ensures that all parties involved agree to the same vision and scope for the project.

According to NARI, here are some key areas you should look for in a contract:
  • Be sure the contract includes the contractor’s name, address, phone and license number (if applicable).
  • It details what the contractor will and will not do.
  • Your contractor should detail a list of materials for the project in your contract. This includes size, color, model, brand name and product.
  • The contract should include the approximate start date and substantial completion dates.
  • Study all required plans carefully. Insist that you approve them and that they are identified in your written contract before any work begins.
  • 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. This is provided it was solicited at some place other than the contractor’s place of business or an appropriate trade premises, such as your home, or has financing provision.
  • Make sure financial terms are understood and spelled out in the contract. The total price, payment schedule and any cancellation penalties 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.
  • Consider having a legal professional review the contract before it is signed.

KEEP IN MIND
In addition to the information provided here, Texas residents are reminded of the following on contractor selection, from the Office of the Attorney General of Texas (www.oag.state.tx.us):
  • A remodeler in Texas may not engage in projects that change the living area of the home or that cost more than $10,000 without first registering with the Comptroller of Public Accounts. Contact the comptroller to check on any contractor you are considering.
  • The Texas Department of Licensing and Regulation (TDLR) (www.tdlr.state.tx.us) is a state regulatory agency that currently oversees more than 20 types of businesses, industries, trades and occupations. The agency is responsible for issuing licenses, conducting inspections, investigating complaints, assessing penalties, setting rules and standards and holding hearings.
  • Verify any claims the contractor makes about energy savings or increased security, home value or other added advantages to the improvements you are buying.

BE SMART ABOUT CONTRACTS
Most home repair and remodeling work is performed under contract. Legitimate businesses usually will insist on having a contract for their own protection, and a well-written contract should protect the homeowner, too.

Never sign a contract until you have carefully read and understood every word of it. Sometimes it can be difficult to get out of a signed contract.

These precautions are important to remember whenever you sign a contract of any kind. Frequently, consumers contact the Texas Attorney General’s office complaining of unreasonable, even outrageous, terms of business. Too often, consumers have signed a contract they have not read, placing them at a disadvantage.

Do not allow anyone to rush you into signing a contract. The sales person should be willing to leave the contract with you so you can read it carefully on your own time. If anyone rushes you or tries to make you sign on the spot, or will not leave a copy for you to study, you should be suspicious of that person and the contract.

Make sure everything promised to you is in the written contract. Insist on a written contract that specifically states what the contractor will do, when the work will start and when it will be completed. Make sure the contract includes everything the salesperson or contractor promised and spells out the cost of special orders and materials.

Be aware that most contractors will not allow you to change your mind for free about what you want done or how you want it done. Often a contractor will require a service charge for changing the work order, and this process should be covered in the contract.
Get and keep copies of everything you sign at the time you sign it.

WHAT THE LAW SAYS
Any contract you sign for work on your homestead must contain the following warning next to the signature space: Important Notice: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. Know your rights and duties under the law.

When you sign a contract for home improvements, the contractor legally can place a lien on the homestead. If you sign a contract containing the language quoted above and you fail to make the payments, the company can take away your home. Therefore, it is extremely important that you understand exactly what your obligations will be under the contract and that you are confident you can meet those obligations. If you have any questions or doubts, consult an attorney before you sign the contract.

If there will be a lien on your home, make sure a notary is present to witness your signature. A notary other than the salesperson must be present to witness you sign the document creating the lien. It should be a warning to you if the salesperson does not have a notary present or if he says he will take care of the notarization later.

If your contractor fails to pay the subcontractors and suppliers, you are responsible even though you have not contracted directly with the subcontractor or supplier. Under Texas law, if a subcontractor or supplier who furnishes labor or materials for the construction of improvements on a property is not paid, the property may be subject to a lien for the unpaid amount.

If your homestead improvement exceeds $5,000 in cost, the contractor is required by law to deposit your payments in a construction account at a financial institution. Ask the contractor for written verification of the existence of the construction account. Monitor deposits and disbursements to subcontractors, laborers and vendors. Access to the account record should be included as a requirement in your written construction contract.

PAYING FOR THE WORK
It is normal for a contractor to ask for partial payment in advance and, provided that you have taken the precautions recommended above, you should expect to provide a part of the cost before the work begins. However, it is notorious that scammers involved in door-to-door ripoffs will ask for payment in full in advance then abscond without completing (sometimes without even starting) the job.

Even with a reputable business and a sound written contract in place, you should not pay in full until the work is completed and you have inspected it yourself and found it satisfactory. A partial payment schedule usually will specify what part of the job has been done when a partial payment is due. Inspect the work and make sure the contractor has met the schedule before you make your payments.

If you are asked to sign a certificate of completion, do not do so until all the work is completely finished, the site is cleaned up and you are satisfied. 

If the job is expensive enough that you will need to finance it, be sure to shop around for the best terms on the financing. This is separate from taking bids on the cost of the work. In choosing your source of financing, you will be concerned with the rate of interest, finance charges and the terms of the payout. As with any financing agreement, you should calculate the entire cost of interest and charges over the term of the loan.

A home-improvement company may offer financing, but this is not necessarily the best option even though it may seem easy to arrange the financing and work contract at the same time. Be aware that some contractors will have you sign a credit contract to pay a certain price for the work plus a finance charge, then immediately sell the right to collect on the contract for 20 to 50 percent less than the contract price. That usually means you could have gotten the work done for 20 to 50 percent less by paying cash or arranging financing yourself.

If you are asked to sign a credit-check application, read the form carefully and make sure it does not bind you to anything. Make sure it really is a credit check and not a contract. If you do not understand everything in the document, do not sign it until you have had someone else explain it to you.

MOLD REMEDIATION
Not all water and mold damage is covered by your residential property insurance policy. Most of the homeowners insurance policies sold in Texas are known as HO-A policies. In general, HO-A policies only cover sudden and accidental water leaks and do not cover damage resulting from continuous or repeated leakage. Many do not cover remediation of mold; those that do generally have a cap on coverage.

The other principal type of policy, commonly offered in Texas in the past, is referred to as HO-B. HO-B policies pay for the full replacement cost of the structure of your home, except for items specifically excluded. Few insurers in Texas are now offering HO-B policies.

Some homeowners who have filed claims for mold or water damage later experience difficulty in renewing or obtaining insurance coverage for their homes. Contact the Texas Department of Insurance (TDI) (www.tdi.texas.gov) for possible assistance if you have difficulty finding an insurer. In general, your insurer must begin an investigation within 15 days after you file a written claim. The company may ask you for more information and has another 15 days after you send the information before it must accept or reject the claim. If the company agrees to pay the claim, it must do so within five days. If the company rejects the claim, it must give you the reasons in writing.

It is common for an insurance-settlement check to be made out to both the homeowner and the mortgage company. Some mortgage companies will endorse the check to the homeowner, leaving the homeowner to arrange for remediation. Otherwise the lender usually uses the insurance checks to pay the contractor, with an inspector monitoring the work and releasing payments. Consult with your mortgage company about how involved it will become with the remediation work. If the company oversees the work, you still should understand who is responsible for ensuring that the job is done properly and the extent of your liability. Remain active in this process.

Remediation is more than just repairing damage caused by mold. It involves the process of evaluating the situation before repair work begins. It also involves removing and cleaning items contaminated with mold, treating potentially affected areas and ensuring that mold does not recur.

All nonexempt mold assessors and remediators must be licensed by the Texas Department of State Health Services (DSHS) (www.dshs.state.tx.us). A person may hold licenses, but may not do both jobs on the same project. In addition, a person may not own an interest in both firms that do the assessment and the remediation on the same project.

Remediators must keep a record of all jobs they did in the last three years. This record must include before-and-after photos of the contamination scene, the written contract for remediation and all job-related invoices. The remediator is required to give the homeowner a copy of all photos included in the project record.

Property owners should keep copies of the mold assessment, remediation contract, remediation certificate, photos and other related materials on file. If the owner sells the property, he or she must give the buyer a copy of each remediation certificate issued on the property.

The rules do not apply to the following actions when not done specifically as part of a mold assessment or remediation:
  • Routine cleaning
  • Real estate inspections
  • Repair or replacement of plumbing, ventilation, heating and air conditioning, electrical systems, air ducts or appliances
  • Use of construction materials during the building phase of raising a structure

If you have questions or complaints about the license status of a mold assessor or remediator, contact DSHS. Call (800) 293-0753 for more information.

The Texas Attorney General’s office also accepts complaints against mold assessors and mold remediation contractors, including matters related to warranties. You also may want to discuss the matter with a private attorney.

WORKING WITH REMODELING PROFESSIONALS
Before work begins, ask your remodeling contractor what inconveniences may occur while the project is under way and plan for them accordingly. Be sure your contractor is aware of your family’s vacations or special events so he or she may schedule their jobsite time appropriately.

Following are other points to consider:
  • Consider moving personal property from construction areas and declare work zones off-limits to kids and pets.
  • Be sure to put all changes in writing if your remodeling project is modified while work is being done. Both parties should sign the amendment.
  • Keep a job file that includes contract, plans, specifications, invoices, change orders and all correspondence with the contractor.
  • Request that a contractor’s Affidavit of Final Release be provided to you at the time you make final payment as well as a final Waiver of Mechanic’s Lien. This is your assurance that you will not be liable for any third-party claims for nonpayment of materials or subcontractors.

— Determining the Scope of the Project
Depending on your needs and the size or complexity of your intended remodeling project, there are several different options to explore before finalizing your plans.

Building a home involves many different skilled professionals. As you learn about the process, it’s important to know the roles that key professionals play. Here is a brief summary of job titles and descriptions in the homebuilding process.

Architects represent the most highly educated and trained category of designers. The title requires a college degree and state certification. Architects are able to translate your ideas into detailed plans and list material specifications. They also can oversee your project while it is in progress and are an excellent resource for other professionals since they already have established a pool of designers and general contractors with whom they have worked in the past.

Designers are skilled in the design and building process, but they are not licensed or regulated in most states. If you’re planning to work with a designer, be sure to verify his or her experience and professionalism. You’ll want to review the designer’s portfolio and look for design degrees from accredited universities and membership and/or certification from professional organizations, such as the American Institute of Building Design (AIBD), the National Council of Building Designer Certification (NCBDC), the National Association of the Remodeling Industry (NARI) and the American Society of Interior Designers (ASID). These organizations help ensure professional standards of education, field experience and adherence to a code of ethics.

Residential Designers (Space Planners) are trained to use space most efficiently and tend to focus on floor-plan design, detailed lifestyle evaluation and design functionality. If you’re considering a floor plan, a family room, bathroom or kitchen, you may wish to consult a residential or interior specialist. This specialist can spend additional time and attention on specific areas of the home that are especially important to you and your family. Often residential designers’ expertise can overlap with an interior designers’ because they both offer advice about the latest trends and products.

Structural Engineers need to be consulted if your project requires any structural alterations to the existing building. The role complements the work of architects, who are the spatial and aesthetic experts of building design and construction. A structural engineer can provide advice on any strengthening required and the design of new lintels, beams, walls or foundations that may be needed. Structural engineers also can perform a site inspection to establish the nature of the ground and design suitable foundations for the building.

Kitchen and Bathroom Designers provide expert product knowledge within their specialties, but they may lack construction experience or miss design opportunities associated with additions or movement of walls, according to building experts. If the project involves high-dollar budgets where expensive cabinets, materials and appliances will be used, consider either of these professionals.

Home Center Staff Designers are an easy, immediate and cost-effective way to learn about basic design ideas. You can check your local home-center store to learn about classes they are offering or simply visit the store and discuss with staff designers what you’re planning to build. You will find that design skills among the staff vary widely. Also be aware that the staff will recommend solutions using their store’s products.

Interior Designers and Home Decorators are specialists who offer advice on furniture, wall coverings, colors, styles and the overall physical appearance of your project. While not essential to the process, home decorators and interior decorators can save you both time and money by helping you to narrow down your choices and utilizing professional discounts for materials, such as furniture, home accessories, wallpaper or paint. Communicating your personal style and preferences are important when you meet with an interior designer or home decorator. Be prepared to show examples of styles you like that you’ve found in magazines or books. Based on your input, these professionals will develop ideas that will work for the space and help create a setting that represents your artistic sensibility. Keep in mind that while an interior designer also may do some interior space planning, most usually focus on interior decorating by selecting finishing touches, such as carpets, drapes, paint colors, fabrics and furnishings. You may find that their duties can overlap or be interchangeable with those of both residential designers and interior decorators.

Draftspersons primarily prepare technical drawings of designs created by others although some can assist with design. These days, most drafters work in Computer-Aided Drafting and Design (CADD) programs. You already may have a good idea of a floor plan you like; if that’s the case, it’s not uncommon to hire a draftsperson to draw the blueprints and have them checked by an engineer before speaking with general contractors to bid, apply for permits and build.

General Contractors coordinate and construct projects that typically involve three or more subcontractor trades, such as carpentry, plumbing, painting, roofing or electrical work. In Texas, no state license is required, but general contractors must get permits at the local level. Separate boards license the HVAC and plumbing trades. General contractors who specialize in production, concentrate on bidding and building from plans drawn by design specialists do not offer much, if any, design or drawing services unless they advertise themselves as design and build contractors.

Design and Build Contractors offer both architectural and construction services. They can carry a job from inception to move-in, and some experts believe their results are more cost-effective and allow for more collaboration during the building process. Using this method, one firm is accountable for the entire project, which can result in a less expensive design that is practical to build and causes less confusion between design and construction specialists who may not see eye-to-eye. Due to these advantages, the design-and-build method has become increasingly popular.

As you speak with these various professionals in the homebuilding process, look for people whose experience, designs and ideas best reflect your taste and sensibilities. There also should be good communication flow and understanding of the project. After all, it’s about building your new home, one of the largest investments you’ll make in your lifetime and the center of your family’s life.

— Finding Remodeling Professionals
Choosing your remodeler is the most important decision in a remodeling project. Take your time and be thorough in your search. Nearly half of all projects signed by a remodeling contractor are the result of client referrals. An additional 22 percent of jobs are the result of word-of-mouth referrals.

— Other Remodeling Resources
  • The Houston chapter of the National Association of the Remodeling Industry (NARI) (www.nari.org/houstonchapter/)—NARI is a national professional association whose members voluntarily subscribe to a strict code of ethics. Consumers can search here to find a qualified local remodeler who is a member of NARI.
  • Greater Houston Builders Association (GHBA) (www.ghba.org/membership/find-a-member.html)—Here you’ll find a searchable database of member professional builders, remodelers, developers or product and service providers, which include financial institutions, architects, interior decorators, carpenters, painters, material suppliers and more.
  • Attorney General Office of Texas (www.oag.state.tx.us/consumer/index.shtml)—The Texas Attorney General’s Office protects consumers and the legitimate business community by filing civil lawsuits under the Deceptive Trade Practices Act and other consumer-protection statutes.
  • Texas Comptroller of Public Accounts (www.window.state.tx.us)—The comptroller is the chief steward of Texas’ finances, acting as tax collector, chief accountant, chief revenue estimator and chief treasurer for all state government.

Check out these other resources in your area:
  • Jobsite signs: Pay particular attention to homes with signs from their contracting company on their lawn. Is the site clean? Are tools and materials being handled in a responsible manner? Are there dust covers over the owner’s belongings to protect them?
  • Local press coverage: Look for articles about local remodelers. Also check out local home-improvement columns in the newspaper and radio talk shows in your area. They can be a great source for finding a qualified, reputable and personable contractor.
  • Direct mail: Some contractor will send direct mail to homeowners within a few blocks of a current job. Call and ask the homeowner if you could tour the project with the contractor.
  • Seminars: Attend local seminars on home-improvement topics. Some firms host free seminars on how to choose a remodeler and other interesting remodeling topics. Check your local newspaper community news section for date and location information.
  • Home trade shows: Although a somewhat tricky place to interview contractors since they are surrounded by other consumers, this is a great place to gather information about companies and make an initial contact with contractors. Later it is possible to meet with them at their place of business or in your home.

THE PUSH FOR GREENER HOMES
A major nationwide trend is building with sustainability in mind. This also applies to remodelers, who are leading the charge to provide eco-conscious solutions for home-remodeling projects, according to NARI.

Faced with mounting scientific evidence that climate change threatens the health of the planet, homeowners are compelled to ask how they can make a difference. Green remodeling practices have become more popular as homeowners cope with ever-increasing energy costs, health concerns and diminishing natural resources.

Contractors are assisting homeowners in choosing eco-friendly solutions for their remodeling projects year round. “If you had to put it in a nutshell, the biggest trend we’re seeing is sustainable design,” says Stewart Davis, AIA, design director for CG & S Design-Build in Austin, Texas, a NARI member. “We’re still doing nice kitchens and baths, but people want to do these projects as green as possible—and within their budget.”

Following are a few specific ways NARI remodelers can help plan a green remodel.

— Efficient Heating and Cooling
With dramatic increases in energy costs becoming an annual occurrence, many homeowners have come to realize that building in an environmentally friendly way also means making smart decisions that translate into financial savings. New insulation technologies, such as spray-in cellulose insulation made from 80-percent postconsumer recycled newspaper, effectively will seal homes from harsh heat and cold.

Thermal solar energy is a nonpolluting energy source that is captured easily and used for water and space heating. Although solar water heaters can be expensive ($1,000–$4,000), they can show paybacks of four to eight years, according to Austin Energy. Space heating systems can vary from $800 for wall heaters to $4,000 and more for large central systems. Qualified remodelers can help homeowners choose the right combination of insulation and energy-saving heating and cooling systems to reduce energy costs.

— Reducing Water Consumption
Many parts of the country are now experiencing rising water costs and seasonal water shortages due to diminishing supplies. Selecting the right appliances, such as water-conserving washers, dryers and dishwashers, and installing low-flush toilets and showerheads, can reduce the amount of water needed and help trim water bills. In addition, approximately 8,000 gallons of water per household each year are lost while waiting for hot water to come from the tap. Positioning a home’s water heater as close as possible to the points of use for hot water will help conserve this valuable resource.

— Healthy Indoor Air
Homeowners today are concerned about maintaining a healthy indoor environment, particularly if they are sensitive to airborne irritants. Modern building materials, such as construction adhesives, paints and treated woods, can have toxic VOCs (volatile organic compounds) that adversely affect indoor air quality. Today, there are new nontoxic materials that will improve the overall health of a home. Air filters, such as those installed in a home’s central HVAC system, also can improve the quality of indoor air.

— Sustainable Materials
Reduce the environmental impact of your remodel by choosing flooring and countertop materials made from local or regional sources. There are many products on the market today that are either made of recycled materials or produced in an eco-friendly way. “Green” surfaces, such as reclaimed hardwood, bamboo flooring and recycled-glass countertops leave a lighter footprint on the environment.

— Quality Over Quantity
Many homeowners today are opting for slightly smaller homes in exchange for smarter planning and design. “Instead of the big formal rooms, many of our clients request multifunctional spaces, such as a home office that doubles as a guest bedroom,” Davis says. “In areas with small lots, every square foot needs to count and remodelers and architects can help design spaces that do that.”

— Recycle Construction Waste
Eco-conscious remodelers recycle as much project waste as possible during a home-renovation project. For example, CG & S Design-Build brings four waste containers to a project site—for paper, metal, wood and concrete—in an effort to recycle more efficiently. “We are very aware that so much waste is traditionally put in a landfill, and we are trying to reduce that as much as we can,” Davis says.

For homeowners who want to promote sustainability, NARI remodelers can help homeowners navigate the path to greener living. Green remodeling gives homeowners the chance to combine earth-friendly building concepts with cost-saving solutions. NARI’s approach to green remodeling emphasizes comfort, health and efficiency for a happier home.

DEVELOPING A REALISTIC REMODELING BUDGET
Review these simple tips from NARI about developing a budget.

Determine what you can afford. It may seem obvious, but often homeowners may expect a remodeling contractor to create the budget for them, which is not a good idea.

Keep a reserve. Once you determine how much you can afford to spend on a remodeling job, decrease that amount by 10 to 20 percent. This reserve should be put away to cover any change orders or incidental charges accrued along the way, which will prevent a frantic scramble for additional funds at the end of the project.

Keep change orders to a minimum. It is easy for a homeowner to say, “A little more on this fixture doesn’t matter. It’s very little money.” Unfortunately, having that attitude also makes it easy to overextend a prepared budget. While it’s rare that any remodeling project proceeds without a single change order, homeowners can keep them to a minimum by sticking to their original plans. A change order is a written document detailing any requests to alter, change or remove any items found in the contract or project. There are four key origins of a change order:
  1. The homeowner initiates one because they have changed their mind about the design or a specific product.
  2. Unexpected damage was found (termites, for example).
  3. A code violation is uncovered that affects the project.
  4. The proverbial, “while you’re at it…” That phrase can annihilate a budget. While it’s tempting to a homeowner to have his remodeling contractor complete handywork, it’s good to remember that any work not specified in the original contract will have an additional cost attached to it. 

FINANCING
Some homeowners obtain financing for a remodel, especially for larger projects. There are various financing plans readily available to homeowners, among the most popular being the home-equity loan, which bases the loan amount on the equity in the home.

Federal Housing Administration (FHA) loans specifically for home improvements are available through many banks and lending institutions. The FHA requires that the contractor be approved by the lender; but proceed with caution. That in itself does not guarantee the contractor’s work. Other financing options include personal loans and credit-card loans. For more information about financing a remodeling project, NARI’s Homeowner’s Guide online at www.nari.org/homeowners/guide/ discusses financing and more in greater depth.

Whichever financing a homeowner obtains, it’s recommended they stick to it. If the budget is “x” and reserve fund is “y,” don’t be afraid to tell the contractor that these are the budgetary parameters.

A professional remodeling contractor is familiar with the many financing options available and frequently can be of assistance in putting a homeowner in touch with various options, but it’s recommended that homeowners do their own homework on the available options as well.

Whether remodeling your home for personal use or resale, make sure you hire the right construction professionals that will ensure the quality of the work and a true return on your investment.
 
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