6 Steps to Budgeting for Your Home Remodel
Budgeting for a remodel is a complex process. Many homeowners have no idea how much to expect their remodel to cost when they begin the budgeting process. Establishing a dollar limit before knowing how much the remodel might realistically cost could lead to problems.
To budget successfully, homeowners must first do research, explore materials, and meet with contractors. This helps them decide how much they can expect to spend to achieve their goals. Once they know and approximate the cost, then they can establish their budget. If you’re a homeowner who is going to be taking on a remodel sometime in the next year, here’s what you need to do to get started with the remodeling process.
- Make Goals
Start by making a list of broad goals you hope to accomplish with your remodel. Perhaps your home is energy inefficient and you want to cut back on drafts. Maybe you’re hoping to make your bathroom safer for aging in place. Whatever the project, write down one or two goals that your remodel must accomplish in order to be successful.
Next, make a list of must-haves versus nice-to-haves. In the case of a safer bathroom, your list of must-haves might include a curbless shower, more light fixtures, and non-slip floors. Your list of nice-to-haves might include a new vanity with a sink that has easy-grip faucet handles.
Your list of must-haves helps you determine the base price for your remodel, while your list of nice-to-haves can help you determine the expected maximum cost of your remodel. You can add or remove nice-to-haves from your remodel until the cost is around what you’re willing to spend.
- Check Out Materials and Make a Plan
Go to home improvement stores to look at fixtures and materials. Decide which fixtures and materials would be best for your remodel. Make a list of prices, get samples, and take pictures.
Start a remodeling scrapbook, and include pictures of examples that you would like to incorporate in your remodel. Keep the list of prices and samples in your scrapbook. Making this book will help you establish what your remodel should look like when it’s done and will give you something to show to contractors when you meet with them.
- Meet With Contractors and Get Bids
Contact at least three reputable contractors, and meet with them at your house to discuss your remodel. Sometimes finding reputable contractors can be hard. Talk to friends and relatives who have successfully remodeled their home in the past to find out if they would recommend a contractor. If no one you trust has hired a contractor in the past, contact local remodeling associations for lists of recommended contractors.
After meeting and discussing your project thoroughly, each contractor will submit a potential bid. Request that the bids be detailed and itemized so that you can compare each proposal. Very low bids should raise red flags. Some contractors outbid others by hiring inexperienced labor, using sub-par materials, or submitting incomplete bids.
- Decide on a Price
Once you’ve seen at least three bids, you should know approximately how much your project will cost. Now it’s time to decide on a final price (and thus a contractor). Assess how much cash you have on hand to spend on your project and how much financing you’ll need to secure in order to complete your remodel.
Add at least a 15% margin of error into your budget in addition to the amount proposed by the contractor. This will help cover any unexpected expenses, add-ons, or change orders that might occur during your remodel.
- Secure Financing
Assuming you need to borrow some money to remodel your home, meet with bankers and lenders. Many lenders will require documentation in order to approve your loan. Find out what documentation is required ahead of time, and bring that with you when you meet with lenders.
Shopping around can get you different interest rates and deals. As you compare loans, find out how much you’ll have to pay each month, how long it will take to repay the loan, and what the penalties are for paying late. All of these factors should be considered when trying to decide which loan is right for you.
- Hire the Contractor
Once you’ve secured the financing, then it’s time to sign with the contractor. Bids will expire if you don’t sign. Find out how long you have to sign before the contract will be invalid, and be sure to sign within that time frame. If you don’t sign before the bid expires, you may need to get bids all over again, which could waste time and increase the price.
Budgeting for a remodel can be challenging and time-consuming. For more information about budgeting your home remodel, contact Four Seasons Home Products. We’ll be happy to answer all your questions about your home remodel.