Brian Gawthrop waited over six months to renovate his house.
The Washington state-based certified financial planner and his wife have a wishlist long enough to keep a contractor busy: a kitchen remodel, new flooring, a new patio, and plenty of other upgrades.
They did a cash refinance last summer, which lowered their mortgage rate and gave them money to use for home renovations. They planned to start soon after receiving the money, but by mid-December Gawthrop still hadn’t found the right contractor.
Contractors say home renovations triggered by a pandemic have kept their schedules busy, while labor and material shortages have extended project deadlines. This means that the next contractor you call may be more selective about which projects they take on, and your quote may be higher than expected.
Here’s how to stand out among a crowd of homeowners vying for a contractor’s attention.
GET A REFERENCE
A contractor may be more likely to call you back if an existing client recommends you. You can try a friend, family member, or neighbor who has had some work done recently.
Mike Williams, owner of Maryland Professional Contractors, says that when he has dozens of voicemail messages, referrals get the first calls.
Williams says he enjoys working with new clients, but the referral network supports his business.
“This base currently has about seven full-time employees,” he says. “I know it was there before this boom, so I’m pretty sure after the boom we’ll have that baseline.”
You can also use your real estate agent. Williams says about half of his referrals come from agents.
BE PATIENT – AND KIND
For Williams, summer is the busy season and demand begins to decline in the fall; last year, however, he stayed busy until the end of the year. Renovation timelines could be delayed by pending city permit applications, a shortage of subcontractors and backlogged material orders.
Christina Starmer, a building contractor at CenterBeam Construction in Jacksonville, Fla., Says she returns every client’s call, but acknowledges that not all contractors do.
“I think it’s really important to be extremely nice to customers and to call them back, but customers right now are just extremely frustrated because they can’t get anyone to answer the phone,” she says.
As frustrating as it is, don’t let anger get the best of you. Starmer says renovations are hard work and that a little empathy goes a long way.
If someone is mean at first, Starmer assumes that they will be mean to their staff as well, and usually switches to a new customer.
KNOW WHAT YOU WANT
Look for finishes, like cabinetry and countertops, before calling a contractor because they can make a big difference in the cost of the project, says Jonathan Larkin, sales manager for JoNick Construction, based in St. Paul, Minnesota.
“It’s a lot easier to write an offer if someone has solid ideas about what they really want,” he says.
If you haven’t worked out the details, Larkin recommends setting a budget in advance.
Giving a number may sound like giving up leverage, but he says a reputable entrepreneur will use your budget to help you weigh options, not to overcharge you.
Your budget may need to be higher than before the pandemic, he says. Wood prices skyrocketed last spring and still have not fallen to their pre-pandemic levels. Other materials, like shingles and siding, are also more expensive than they were in 2019, Starmer says.
Larkin recommends getting a detailed estimate in case you need to find opportunities to cut costs.
PROTECT YOUR FINANCES
Gawthrop says his wife wants to start renovations as soon as possible, but he wants to stay budget conscious. In this market, he says, pricing seems largely at the discretion of entrepreneurs.
“It looks a bit like the Old West,” he says.
But you can stay in control of your finances.
For example, ask to create a price stamp in the contract. Larkin says if material costs increase or decrease by more than 12% between the time he makes an offer and the start of the project, he will correct the offer. This helps protect him and his customers from material price volatility, he says.
If you’re not paying cash for the renovation, compare financing options. For example, home equity financing typically has single-digit rates and repayment terms of 10 years or more, while personal loans can have rates between 6% and 36% but terms shorter by one. at seven.
Weigh each type of financing to find the one that’s right for you.
This article was provided to The Associated Press by the NerdWallet personal finance website. Annie Millerbernd is a writer at NerdWallet. Email: [email protected]
NerdWallet: How Do Home Improvement Loans Work? https://bit.ly/nerdwallet-how-home-improvement-loans-work
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