Lessons in Renovation – Always add 10% to your budget

The most important decision you’ll ever make about your home, after you actually decide to own it, is how, when and if you renovate. As a self made pro at ‘flipping’ a house into my home, I’ve learned a thing or two in my almost dozen projects.

You’ve interviewed and chosen a contractor, they’ve presented a bid and you’re ready to sign, but are you really ready? Let’s talk about that bid, or the budget, of the job. When you call a contractor to your home and ask for a price, you are usually asking for a bid, or an estimate, for the work. Unlike a quote an estimate or bid can change. When you are given that bid price, we assume the price will not change (read: increase) but this is seldom the case.

However thorough and fantastic your contractor is, he’s basically guessing. Guessing how much materials are going to cost once you sign, guessing about your design taste and guessing how much the sub-contractors are going to cost (you didn’t think he was a master tile installer, carpenter, stone cutter and painter, did you?). A good contractor will tell you how they came up with their bid. Did they call their subcontractors? Did they head to their supply shop to see what lumber is going for (yes, this does change)? Have they done a similar job recently? Remember, they want the number to be appealing to you so, they could (knowingly or innocently) underestimate to their bid.

Then there’s the details you forgot. And there is always something you forgot, even if your bathroom Pintrest board has more ideas than your wedding board, trust me, you and your contractor forget something.

Now that I’ve scared you out of signing, let’s talk about how to calm yourself down. Once you’ve asked all the right questions, and once you’ve read the ENTIRE contract, there’s a ‘10% rule’ that alleviates frustration after the work has begun. The 10% rule is a contingency or, a cushion of funds that, we hope we don’t need but, we might need if there’s mold behind the wall, or if a sub-contractor quits and you have to find a new one quickly. Anything that is unforeseen in the project could take from this fund.

Great contractors are hard to find, if you have a great one, they’ve included a contingency in their bid or, at least talked you through what a good amount to plan for would be (just in case). If they haven not, I abide by a 10% contingency budget; This has always been enough for me to take care of the little things I forgot or, for the design choices I make that weren’t covered in the bid. If you have ‘champagne taste’, you may keep aside a little more just in case.

Written By Sarah Whitely, Forever Home Colorado 303.246.1667

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