Are you ready to start construction? Read our 5 questions and find out!
Successful projects require planning. To help clients prepare for new home construction or a home remodel we’ve developed 5 questions to ask before starting a project.
1) What are my goals and constraints?
Before starting any design work, it’s best to clearly define project goals and constraints. Write them down. This is especially true for residential remodels and additions. If the project scope is not clearly defined, it’s easy to succumb to “scope creep”. Once that happens, your construction budget and schedule can become seriously compromised. We suggest defining as many goals and constraints as possible. Don’t worry if constraints are random or conflicting—your architect should be able to resolve them into a design.
2) What is my construction budget?
Having a good idea what you can—or are willing to—spend on a project is critical. Do a little research by asking friends and neighbors who have recently constructed, ask an architect who specializes in your project type, ask area contractors what is a reasonable budget to consider. Keep in mind, this type of feedback is unique to each project’s goals, constraints and budget and may not reflect your budget. Another approach is doing a real estate market analysis to determine the property’s value after construction.
3) What are my contract protections?
Qualified contractors and builders typically use their own contracts. They have spent time and money modifying contracts that best meet their needs—and hopefully their clients’ needs as well. Instead of forcing new contract language on your preferred contractor or builder (adding time), ask a construction-experienced lawyer review the contract to insure basic protections are included.
Before signing a contract, confirm that your contractor / builder has appropriate general liability insurance, and verify your property insurance covers or has a rider for renovations to your existing home. Builder’s Risk insurance is another option to consider. All new home construction should have this coverage. Significant renovations and additions to existing properties should consider this coverage, as well. Coverage amount varies based on construction cost and property value. Your insurance agent or a broker can help you find appropriate coverage.
Accidents happen and some can cause significant damage to the whole property. Most contractors and builders don’t have the resources to cover the damage. Insurance is your only viable option. Another protection to consider during construction is a conditional waiver and release on progress payments. It requires that the next pay installment be contingent on proof the last payments were made to the receiving parties. It’s the best means of verify if your builder is paying their sub-contractors and suppliers. Conditional Waiver and Release Example
4) How should I select my contractor / builder?
Selecting the right builder or contractor for your project is very important. For most residential projects, there two empirical approaches: option A—select a builder early in the process so they are part of the team. Or, option B—complete the design, product selection and other specifications, and then select a builder.
You need to find a good fit—a relationship that meets your personal and project needs. The best way to find the perfect combination is to interview at least three builders. By asking the same questions to each applicant, it will become clear which one is the best fit. If option A is your preferred approach, then it’s best not to focus on design or what you want to change, but rather on subjects such as process, quality control, insurance coverage, invoicing, sub-contractors and project closeout. Once a builder is selected, then you can get into the details of the project’s design, scope, budget and schedule. If option B is your preferred approach, then it’s best to have each pre-selected contractor competitively bid the finalized design and specifications, which should include insurance and other administrative requirements.
5) Am I subject to a design review?
It’s not uncommon for a property to be subject to a design or architectural review board and their guidelines. HOA (Homeowner’s Association), historic preservation designation, environmentally sensitive areas, special urban or use districts, and municipal architectural review boards are the most common type of design review boards. The best way verify if your property is subject to a design review is to contact your local building or zoning official. They can quickly identify if your property is subject to any formal review.