Do not be afriad to negotiate with your contractor.  Assume that everything is negotiable, but focus on areas in which you can achieve the greatest savings. Questions like “The hauling fees seem high to me. Is there any room in those figures?” can save you hundreds of dollars. Utilizing intelligence from the competing bids you received can also be extremely effective. If the estimate from your second-choice candidate listed a sliding glass door replacement cost that is $1,000 less than your contractor’s price, confidently state that you know it can be done for less. Unless you’ve already signed a contract, your contractor will recognize that you are still free to pursue other alternatives and should be willing to work with you.

The key thing is not to be shy about asking for price breaks. To the contrary, the average contractor has already incorporated some padding into his proposal and is expecting you to ask him questions about his estimates. As long as you are respectful in your discussions, and not squeezing the profit out of every excruciating detail, he should demonstrate a certain level of flexibility. On the rare occasion your contractor is unwilling to negotiate, thank him for his time and move on.

Once you’ve defined your project, making decisions about flooring materials, colors, hardwood styles and appliance models early on can pay great dividends. There are several reasons for this. First, this preliminary research will familiarize you with not only the decorative and functional options available, but also the expense associated with each of your choices. You will enter into negotiations with your contractor having a much better handle on the true cost of your supplies and materials. 

Another reason to begin this process early is that, whether you are purchasing these items yourself or your contractor is performing this service for you, evaluating your choices will take up more time than you can possibly imagine. It is far better to accomplish as much of this as you can up front, rather than having to do so on the spot during the course of your construction. Even the most organized contractors will require you to make certain decisions with little, if any, lead time. Further, there will be issues that arise unexpectedly, even with the most thorough planning. Finally, if you wait to order materials, there may be rush charges or additional complications should your favorite selections not be readily available. 

In order to minimize last-minute trips to Home Depot during work hours, rush fees and hasty decisions, I recommend making a list of any and all materials that appeal to you before your remodel even begins. If you are unsure about certain choices, remember that these need not be set in stone; obviously you can always change your mind as you approach the start date. Not only will you avoid future disruptions with respect to your time but, as mentioned above, you will gain an excellent knowledge of the cost associated with each of your options.

You can minimize contractor costs significantly by carefully reviewing and negotiating your contractor’s initial bid for your home remodel or repair. Having received bids ranging from as little as $50,000 to as high as $144,000 for my home restoration, I know first-hand how liberally contractors can pad their proposals.

Ask probing questions: Review the bid line-item-by-line-item, questioning any cost that does not appear reasonable. If you are unfamiliar with the cost of certain fixtures and supplies, check the prices at a do-it-yourself store or on the Web. Assume that everything is negotiable, but focus on areas in which you can achieve the greatest savings. Questions like “The hauling fees seem high to me. Is there any room in those figures?” can save you hundreds of dollars.

Leverage intelligence from competing bids: If the estimate from your second-choice candidate listed a sliding glass door replacement cost that is $1,000 less than your contractor’s price, confidently state that you know it can be done for less. Unless you’ve already signed a contract, your contractor will recognize that you are still free to pursue other alternatives and should be willing to work with you.

Purchase supplies yourself: A great way to reduce your monetary commitment is to agree that you will procure certain items yourself. You can assume, for example, that if the contractor is responsible for purchasing the appliances for your remodel, there will be some level of mark-up over the retail price of the appliances. A good appliance warehouse will give you a discount for purchasing multiple items. If you purchase multiple appliances from the same manufacturer, you may also be eligible for a manufacturer’s rebate. Always ask for a contractor’s discount. Certain vendors may deny you the discount but, more often than not, they will not even ask if you are a contractor. Simply asking the question can save you five to ten percent, or even more.

Request lower-cost subcontractors (who you also know to be reliable): Another potential way to save money is to request an alternate subcontractor for particularly expensive items. For example, if the quote for the sliding glass door installation seems high to you, your general contractor may agree to explore working with a lower cost subcontractor who you recommend.

Refrain from discussing your budget: The one thing you should absolutely avoid during this process is answering any questions about your budget. Your contractor may try to gain a negotiating advantage by casually asking “how much are you looking to spend?” Do not answer this question under any circumstances. Of course, he will use the information to gauge how much you can afford and will negotiate harder if he believes price is no object. If he should attempt to feel you out on budget, politely respond “Why, as little as possible, of course!”

Insist on closed costs for every item: Every line item should have a price tag attached to it. Under no circumstances should you agree to “Open” or “TBD” for any tasks or materials other than city permits. When the scope of work is finished, it should be completely closed, with a final number that is documented as the total cost of your job. Your contractor may attempt to incorporate an hourly fee for certain installations, insisting that it is impossible to determine how long they will take. To the contrary, good contractors can estimate with a high degree of certainly the number of man hours required for each component of the project. While certain items may run a bit over, certain others will not take as long as expected. Either way, hold firm in your request for set fees, which can easily be calculated with educated assumptions about the labor involved.

With hurricane season in full swing, the prospect of widespread flooding is top of mind — especially in coastal communities. Following are a few actions you can take to better prepare yourself if you should find yourself the victim of significant water damage.

Check your homeowners insurance coverage limits: Between mold abatement, structural repairs, personal property and hotel expenses, your total claim could be in the hundreds of thousands of dollars – well short of the coverage many homeowners have.

Network for contractor referrals before a disaster happens: It took me months to find a contractor I trusted who was willing to rebuild my home within the budget I negotiated with the insurance company. If I had a short list of quality contractors and/or subcontractors at my finger tips at the time of my flood, I might have been able to get back into my home eight months earlier.

Store important records in a water-proof place: Imagine if you had to write down every item in your home, along with its purchase price and date. That’s just one of the many things tasks on your list when you lose your home, and I did it over three weeks in a hotel room with a very big pile of tattered receipts. To ensure that these records remain intact in the case of any emergency, place your records and receipts in a plastic or water-proof box in an elevated location within your home.

Have an emergency plan: Think about what you would do if your home was completely flooded. Would your valuables be safe? Where would you go? How would you keep your family calm? Having lost my home in an instant, I can assure you that it’s much easier to have an answer to these questions in advance rather than attempting to solve them during the chaos of salvaging personal property, fielding insurance calls and surviving emergency services.

I get a lot of questions about how to maximize insurance settlements. Below are some suggestions on what to do during the early stages of a home disaster.

First and foremost, be sure to save any and all receipts related to the inconvenience of being displaced from your home. This includes hotel (be sure to clear hotel arrangements with the insurance company first), restaurant meals and even the expense of developing your photos. Keep in mind that some insurance companies may have reimbursement caps such as meal per diems and clarify any of these items with the agent up front. In my case, for example, I was reimbursed only for incremental meal expenses above and beyond my regular grocery costs. It is, unfortunately, true that the odds of the insurance company proactively communicating this information to you are low.

Take photos of anything that is damaged, especially any personal property that needs to be thrown away (damaged books, towels, etc). You will need them later should there be any doubt in the insurance company’s mind that your claim is legitimate. If your insurance company sends an emergency services crew to pack up your belongings, make absolutely certain that you retain any receipts you’ve been saving. Again, you may need them as proof of the orginal purchase price of your items.

If you have the patience, I also recommend keeping a record of all phone calls and voice mails associated with the claim. I referred back to my voice mail transcripts many times during the course of my negotiations. If you simply don’t have the time to type up every voice mail, many telephone service providers now enable you to store your voice mails online by logging on to their Web sites.

I also built spreadsheets of damaged furniture, personal property, even contaminated groceries. Having descriptions of damaged belongings, along with the original purchase prices and purchase dates in one place, made it much easier to communicate the extent of my loss. I can guarantee that for every spreadsheet I compiled, my payout rose accordingly.

I also put my organizational skills to use in creating a one page document with frequently-used phone numbers. Since the early days of a home disaster can be truly overwhelming, it was a great source of control to have all the contact information I needed in one place. I included insurance company representatives, potential lawyers, contractor referrals and other impacted neighbors. This sheet was my bible for many months, and I can’t imagine having kept it all together if I had scribbled all the names and numbers on scrap paper and post-it notes.

When hiring a contractor, I recommend treating every aspect of the “recruiting” process the same way you would if you were hiring an employee at the office. Just as you would at work, never overlook the critical step of checking references.  Following are 

some sample questions to ask.  Since every reference may not have time to answer each question, they appear in order of priority:

Questions for Contractor References:

Please describe the scope of work for your project.

When did the contractor complete the project?

Describe your overall satisfaction or dissatisfaction with the final product.

Did the contractor complete your project within the allotted budget?

Did the contractor complete your project on time?

Was the contractor respectful of your property?

Did the contractor maintain a tidy work site?

Have you engaged the contractor in more than one job?

Would you use the contractor again for future jobs?

Please describe the degree to which your contractor was reliable.

Please describe the contractor’s willingness and ability to solve problems.

How flexible was the contractor in making changes?

How responsible was the contractor in scheduling inspections and following up on correction notices?

Did the contractor charge for every modification to the original scope of work?

Was your contractor torn between your project and competing jobs?

How often was the supervisor onsite?

How was the contractor’s communication and follow-up?

Failing to procure the necessary approvals for your project can cost you dearly down the road. If your municipality official discovers that you are performing construction without a permit, the Building and Safety Division can and will require that you demolish all work and begin from scratch under the watchful eyes of the building inspectors.

Nearly all forms of construction on residential or commercial private property, whether new or remodeled, require building permits. If you plan to move walls, build an addition or remodel an entire room, you will definitely need a permit(s).

If your project constitutes a restoration, confirm that the city classifies your remodel as a “repair”. Otherwise, the construction costs associated with the project may be viewed as upgrades and added to your taxable assessed property value. 

Do not fool yourself into thinking that you can bypass the permitting process by staying under the radar. At the first sight of work crews or sounds of demolition, a neighbor may report your activities. If you live in a condominium building, a city official may spot your construction efforts while inspecting another unit. I hadn’t even begun to restore my home, for example, when I discovered a code notice on my door demanding that I halt all work. An officer had simply assumed that, since the owner of another condo that had been damaged in the building hadn’t procured a permit, I hadn’t either.

It is possible that you will come across a contractor who recommends skipping the permitting process altogether. If that is the case, do not listen to him! One of the contractors I interviewed for the restoration of my home insisted on bypassing the permitting process. Since he seemed quite knowledgeable and came referred by a highly regarded source, I came very close to hiring him. 

My now husband warned me that the risk of the work being discovered by the city was great, potentially exposing me to expensive fines and rework in the future. If just one of my neighbors contacted the city with a noise complaint, the building department could demand that all progress as of that date be demolished and redone with proper permitting. Fortunately, I listened to him. Later, I discovered that the contractor who insisted on circumventing the permitting process had left behind several unfinished projects, along with a number of unhappy customers.

Your choice of contractor is the single most important decision you will make during the course of your home restoration or remodel. You will essentially be recruiting the person who will enter into your private living space and serve as your right hand for several months. 

At worst, a contractor will take your deposit and never begin work on your job. At best, a good contractor will at least perform the work according to the direction you give him and finish the project. Unfortunately, the majority of contractors will err on the side of low follow-through. It may take several months to find a contractor who shares the same sense of urgency that you do.

The process of recruiting a contractor can take several months. You will, therefore, want to begin searching for potential candidates as soon as you have decided to build or remodel. Candidates may come from a variety of sources, although it is always best to start with word-of-mouth referrals. I recommend asking every person you know, as long as you are certain the source is responsible and trustworthy. The referral pool may include your doctor, attorney, accountant, realtor, neighbors, church community, family members, friends, co-workers or local lumber yard. You will soon learn that just about everyone you know has a contractor story of some kind, whether positive or negative. 

If you live in a condominium building, be sure to check with the building manager and/or property management company for contractor referrals as well. Since the management staff is onsite to observe the behavior of vendors servicing your building, they will have good perspective on which ones are respectful of the building’s rules and regulations.

Another way to locate a potential contractor is through new home development projects in your community. Procuring these candidates can be as easy as a phone call to your local Chamber of Commerce. Alternatively, simply drive through your neighborhood and note the contractor names and phone numbers displayed outside any new construction projects. Some of these leads may represent large scale developers who are not interested in taking on a project of your size. However, I still recommend making the effort of placing a few calls to these contacts, since the savvy contractor working nearby your property will recognize the advantage of taking on additional work at your geographically desirable location. They may also be kind enough to pass on some names of other contractors better suited for the size of your job.

One of the best sources of contractor referrals is your insurance company. Your insurance provider will have a list of construction companies it uses to handle home restorations due to flood, fire and other disasters. A benefit of considering these companies is that, not only do they have a track record of working with an established organization, but they are used to working within a budget under the watchful eye of the insurance claim representative. Additional sources of potential candidates include trade suppliers and organizations. The National Association of Home Builders (nahb.org) and the National Association of the Remodeling Industry (nari.org) are great resources for referrals.

Try to assemble a minimum of twelve names. The more calls you are willing to make, the better your end result will be. Trust me — it is well worth the effort. In my experience, roughly 25% of the contact names did not return my phone calls, 25% didn’t show up for our appointment, and 25% never followed up with a bid after our meeting. That left three candidates who actually submitted estimates, and I was able to find a great contractor out of that small pool. 

If you have you ever left your home with the dishwasher or washing machine running, you might want to think twice before doing it next time. According to the Insurance Information Institute, billions of dollars in insurance claims are filed each year due to household water damage. Water hoses break; appliances malfunction. It happens all the time. I never used to shut my water supply off during extended travel, but I sure do now. And I also discovered the “water sensor.” For a couple hundred dollars, I’ve had water sensors installed on the floors of my bathroom and kitchen. If water should trip one of the sensors, it will activate my security system with a call into the central office. It’s not perfect, but after what I’ve been through, the peace of mind is worth every penny.

A reader commented that the recently-posted reference screening questions were helpful to her. So I thought I’d follow up with a recommended list of questions for the actual contractor interview! As mentioned in earlier postings, you should treat the contractor hiring process as seriously as you would if you were recruiting to fill a position at work.

Once you have your list of contractor candidates, conduct a one-on-one interview at the job site. Use this session to show candidates the project area, thoroughly describing your expectations. It is extremely helpful to share photos, whether it’s the before photo of a home or room that needs to be restored to its original state, or magazine images that demonstrate your vision for a new and improved look. A good contractor will ask you specific questions to clarify the scope of work, take photos, notes and measurements on the spot and follow up with a bid. If he does not do all of these things, he is not the contractor for you. You will want to ask him questions about his experience, schedule and best estimate for a time line. A suggested interview guide follows.

Interview Guide:

·         How long have you been in business?

·         What percentage of your work is repeat business?

·         What separates you from other contractors?

·         Where are you located?

·         Where are your subcontractors located?

·         Have you performed other work in my area?

·         Have you been involved in other projects of this type?

·         Have you completed projects of this scope?

·         How many other projects are you working on at this time?

·         How long will it take for me to receive a bid?

·         When is the earliest you would be able to start?

·         What is your best estimate of the time required to complete my project?

·         Are you familiar with the building codes in my city?

·         How large is your in-house crew?

·         How large of a crew will you assign to my job?

·         How many carpenters will you assign to my job?

·         How many painters will you assign to my job?

·         Do you build cabinetry in-house or subcontract it out to another vendor?

·         Do you have in-house electricians, plumbers and heating specialists?

·         Do you handle glass in-house or subcontract with a vendor?

·         Do you handle flooring in-house or subcontract with a vendor?

·         Are you licensed to perform abatement of hazardous materials?

·         Do you handle commercial construction as well as residential?

·         Do you have Worker’s Compensation insurance?

·         Do you have Public Liability insurance?

·         Do you have a valid State Contractor’s license?

·         Do you have a current City Business license?

·         Do you offer a warranty?

·         Have you had any complaints, judgments or lawsuits filed against you?

·         Have you ever faced potential bankruptcy?

·         May I have your business card?

·         What is your cell phone number (if not on business card)?

·         What is your email address (if not on business card)?

A candidate may tell you he doesn’t take on your type of project. If that is the case, thank him for his honesty and ask him if he knows someone else who does.