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Archives > July 2015

Money Making Investments

Updating Flooring 

When thinking of selling your home, flooring updates need to be considered, because wear and tear has taken a toll on the property to some degree.

Also the styles have changed over the years. Buyers are always looking for the latest thing in design and interior updates.

If your flooring is over 5 -7 years old, has wear and tear or damages it will need to be replaced.

You can consider doing more of the same of what you currently have, but taking in to account the flooring trends is a better route. We can advise you on this if you need help.

HomeGain.com, Inc has an ROI chart where all updates are listed and flooring gets a 110% return on investment with 93% of Agents recommending doing it. So it is a benefit!

We agree with this, because we see the value of it everyday when clients can sell their homes faster than the competitors and the steady feedback from buyers is that they loved the new flooring.

If you feel it’s too daunting your other option is to reduce your price or offer a buyer allowance for flooring, but we don’t recommend that. Why give away your equity?

We offer project planning and contractor management, painting, fixtures updates, facelift renovations, and Staging. 780-452-4527

In addition to updates and proper pricing, Staging a home brings in better offers than not staging it, So clean, repair and stage your home, price it correctly with an Honest and Integrity based Agent, and see results fast. You will be glad you did!

Working with Contractors Part 2 

Once you are hiring someone

STICK TO THE BUDGET.

It is super easy to get carried away with all the extras that could be/ should be done “since you are doing it anyway”.

This is a classic thought process and a surefire way to get in over your head with “add ons” that were not part of the original contract. If you are planning to just do floors and paint, make sure that in your interviews you have asked enough questions to ensure that this topic doesn’t come up.

If you are painting, then what is being painted and what is included in that whole process? Ask what would be an “add on”, while you are doing the interview so that you can decide how far to take it, before the work starts.

You can expect 10-20% on top of your original quote for contingency funds and unexpected issues.

Quotes should include material, fixtures and labor that will be required to complete project to the specifications. It should also outline who is buying and delivering these items to the site, who cleans up and who pays for clean up.

Have Detailed Contracts…how detailed? So detailed that if, God forbid, all parties in the contract passed away, that a lawyer could easily and plainly see what was to be done and what stage money was payable, as well as what money was already paid. A contractor that balks at this idea is not one that you should hire. Contracts protect all parties so if they are unwilling to sign something or create a contract with you, then re-think hiring them.

Make sure that they all carry WCB, public liability and property damage Insurance, as well as a vaild Business license. Take the time to verify this.

Call their references and check their experience.

Confirm that they are able to obtain any building permits, if required and that they are knowledgeable about what will be required.

Check with BBB

Payment plans are usually formed of a 30% deposit, then 30% when 2/3rds of the work is done as outlined on the contract and the last 30% when the final day is complete with a 10% holdback for you to have sufficient time to confirm all projects are in fact complete. Call Service Alberta if you have further questions about contracts.

During the process of actual renovation:

Supervise your contractors– be there daily so you are well informed. We offer trade management as a service within our staging company if you prefer that road.

A professional is happy to answer all questions- so ask questions

Never pay for more than has been completed. Depending on the business deposits may be only $500.00. Progressive payments are usually agreed to on a contract, but what can end up happening is that you pay your progressive payment and the work is not actually completed to that point. If you are new at this, this will be a problem and some contractors can smell new blood a mile away. So again, be clear on the contract and have it reviewed by a lawyer if necessary. A common issue that occurs is that a contractor has worked all week at your house and the completion level is not where it should be, or has run into legitimate issues that held up the progress. At the end of the week, they want a progress payment and the work is not done to that degree. Do you pay? What if they tell you that their rent is due? Or their kid’s soccer dues have to be paid and they promised to pay it today? Do you pay? What if they say they will come back tomorrow (Saturday) to catch up…do you pay? The answer is no. NO.

This always causes tension and if you are a pushover, you will pay and you will lose at the end when you have paid for more work than has been done and they are now telling you at the end that you owe more than you agreed to pay and unless you pay they will not finish the work. This is a difficult predicament to be in and it does happen, so research, interview, have an ironclad contract, get legal advice and be prepared to be on top of all this.

Mandatory holdbacks are required in the province of Alberta. This is not optional. You are legally required to keep 10% of the final pay back to allow time to ensure project is complete to your contractual agreement. Typically you can review your completed project with a few days and then if there are issues, they must be resolved before the final 10% is paid. Contractors may pressure you to give it to them with promises to return to complete items, do not give it to them. Sob stories are for Disney™ not business!

Be Aware!

  • Be aware of a contractor if they request large deposits, or cash only, or payment in full upfront.
  • Be aware if they do not charge GST or have a business license
  • Be aware if they are too vague or do not want to put details in a written contract
  • Be aware if they have no only a box # for an address and no physical location
  • Be aware if they want you to obtain all permits and do not want to be involved in that process
  • Be aware if they pressure you to decide now or offer you a discount for a “now” decision
  • Be aware if they have answering services and do not use their own phone numbers for contact

Although this may seem like I am trying to scare you from using contractors that is not the case. I am trying to inform you on what can and does sometimes happen, so that you can prepare yourself fully and come out of this process unscathed.

 

Most often working with contractors, although stressful due to the nature of the projects, is usually a great learning experience and a rewarding time to see your vision come alive. Property improvement, even if you are moving, always carries its own rewards.

Working with Different Contractors 

written by Jill Gargus, CID. CCSP

When making the move towards doing updates on your property it is intimidating to think about having to deal with contracted trade people. There are many horror stories, lots of them justified, and the thought of tackling this is the biggest reason that most people chose not to. All contractors are not bad news, but there are things to watch out for. Follow the guidelines below to put yourself in the driver’s seat when making hiring choices and doing the project management.

When considering Price Points is it -$3,000 or  $30,000?

This is will be relative to what you haven’t done on your property over the years. The fact is that you DO pay for upgrades on your home, either by actually doing upgrades or by lowering your price enough to sell. Either way you pay. Getting written estimates is a good place to start. Verbal estimates seem to mysteriously increase, so always get it in writing! Get multiple quotes and ask them to be as detailed as possible so you can carefully review them later.

Level of Quality in Product

You get what you pay for. Reputable companies will typically have been “seen around” town through various long standing advertising. You need to always ask for references from past clients and also Google their personal name and the company name to see if anything pops up. Do not hire the cheaper contractors simply because you think it’s better to save money. You will not save money. It usually ALWAYS ends up costing you more in the mistakes they make, the issues they create and the headaches you endure. Pay for quality and you will get it.

This doesn’t mean you have to spend over the top amounts to upgrade but you do have to spend something, so don’t choose the lowest price. Go for the middle ground if you are only basing your decision on price.

Contractor scheduling

This is a tricky balancing act even for those who do it every day. Most contractors are not large corporations, but are running self -employed businesses and therefore they have to run the company, market and also do the work. If this is the case, you can expect their estimated timeline for completion to be twice the guess.

This is because they typically have other projects on the go and you are not their main focus. They have to go out to see new clients during working on your house and so the hours they give you are usually broken up.

This actually makes everything take longer because they have to re-focus themselves each time they get to your house and it takes away from progress momentum.

Self- employed contractors are also busy answering their phone and putting out “fires” from other jobs they have on the go. This can and does cause frustration for a Seller who is updating to get on the market in a set time line.

Give yourself plenty of time to get this work done because it always takes longer than they tell you. Self -employed contractors do have some benefits as they are more flexible with hours and pricing, they are usually trying to build a good business reputation and do not want to get a bad name, so are more likely to fix issues to the best of their ability.

Trust your judgment during the first interview and do not be swayed by flashy talk or pushy sales. If a contractor is pushing you to decide right now, say no. There are many options for you hire and you can afford to wait to make the right choice.

Type of property

This will determine the level of upgrades you choose. A starter home does not need granite counters or top of the line hardwood flooring. Do not be up sold in such a case. Contractors are there to install only not determine your product choice or price points you need to spend, However if you have a million dollar home, it needs to be finished with appropriate levels of quality or it will destroy your chances of selling. Choose upgrades that reflect the price point of the asking price. Our staging company can help with those choices, if required.

Market Expectations
What are other homes listed in your price range doing? You will need to at least offer that much or take it to the next level and offer more. If your competitors are not upgraded, then you absolutely should as it will secure a faster offer and the best price on the block.

If your competitors are upgraded then you need to be also upgraded at least to that degree or better, to even stand a chance at selling. Today’s buyers are telling the sellers what they want in a home so listen…and you will win.

Budget VS. Return

See last week’s
newsletter from www.homegain.com information for the ROI on upgrades. Your budget of course will determine how much you can invest into your sale, so plan a budget that takes in account an overall impact on the property, not just one or two rooms.

It is better to paint a whole house and put new floors throughout, than to just gut and update a couple of bathrooms. Choose your budget to cover all your bases and consider that investing now will prevent future price reductions, so you are actually saving money.

Research, Research, Research

Do lots of interviews with contractor. At least 3 each. Spend a few days doing this and ask lots of questions. Searching the net beforehand to learn what to ask would give you an advantage. Every property and its needs are different so we can’t give a general list that covers it all.

So make sure you are informed before they step through your door. If you are single or alone in this process, if possible, have a trusted friend there to be a support. It is better to have someone there with you to keep you on track and it will help prevent being swayed by pushy sales tactics.

No shows -no 2nd chances.…if a contractor is a no show for your first appointment, then do not give them a second chance. This is a good indicator of the level of service they will provide you if they are missing their first appointment.

See next week’s newsletter for part 2 of this subject!