Tuesday, November 3, 2009

Pricing Your Project: What's the Right Approach?


Finding the right remodeling professionals can be overwhelming and confusing. Many people start with the outdated notion that they need to get 3 bids. While this strategy makes sense when you’re only purchasing a single item such as flooring, it doesn’t work for design based projects such as kitchen and bath remodeling. For one, you don’t have a set of plans yet. Even if you’re not planning to change the footprint of your kitchen and appliances will be staying in the same location, you still need a plan for your cabinetry, storage features, lighting, and the list goes on. No one will be able to give you an accurate “bid” until all of the details are worked out. On the other hand, you don’t want to end up with a set of plans that you can’t afford to build. So, how do you find out what kind of budget you will need to do your project before you start designing?

Stated simply, your goal at this stage of the game is not to get bids, but rather to set a realistic budget for your project. And unless you work in the industry and have lots of experience you can't do this accurately on your own. With that said, there are a number of options for getting professional help with creating your budget. Some of them are better than others, depending on your specific needs.

Design Build

Bob and Robin knew it was time to give their 70’s ranch style home a major overhaul. Now that their children were grown and they were near retirement age, they wanted to do the much needed renovations that would not only fit their current lifestyle, but also take them through their retirement years. Their plans called for an open plan kitchen and great room remodel, as well as an addition for Robin’s art studio. They knew that this project was not something they wanted to tackle as an owner/builder nor did they want to piece meal it with a separate design and construction company. Bob and Robin wanted one company to help them through the entire design and construction process.

In planning their project, Bob and Robin needed to have a budget to base their financing on. They wanted to work with a one stop company that could give them realistic numbers up front, with no surprises later. For Bob and Robin, design-build was a good fit and gave them the peace of mind they needed.

Design-build companies offer both design and remodeling services under the same roof. Some of these companies are also kitchen and bath dealers that can furnish all of your products without going through an outside vendor or middleman. One of the advantages of working with a design build company is that they can give you a realistic ball park of what your project will cost before they start design. They also employ kitchen designers, architects, or other design professionals that are there to assist you with your project in-house, If your expectations are unrealistic, they can suggest other cost effective ways that you could do your project that works with your budget. Some charge a nominal fee for the initial consultation, and this is a small price to pay for knowing what your budget numbers are early in the game. Other design build firms will also credit part of their design fee back towards the remodeling project as an incentive to work with them.

If you decide that design-build is the best approach for you, we advise you to interview several design-build companies. Since all of them have the ability to advise you on your budget and make suggestions that could work, your interview focus shouldn’t be on what things cost, rather on how comfortable you feel with the company and how responsive they are to you. To find companies to interview, start by asking friends for recommendations as well as trade organizations such as the National Association of the Remodeling Industry or the National Kitchen and Bath Association.


Kitchen Designers and General Contractors


Mike and Barbara built their custom home 30 years ago. Situated on countryside property and complete with a fishing pond, this home was the ideal setting for their retirement years and they weren’t planning to move. The project included a kitchen, 3 bathrooms, and updating throughout the house. At the advice of their friends, they hired a highly recommended kitchen and bath designer to assist them with the planning and design of the space. It was their intention to take the project out for bid upon completion of the design. When Mike and Barbara began working with the designer, she helped them create a realistic budget for what they were trying to accomplish. As the project progressed and more things got added to the project, she advised them that they were going over budget so that they could be prepared when they took the project out for bid.

When it was time for bids, the designer recommended several contractors that she had good working relationships with. Mike and Barbara interviewed each of these firms and got their bids. Although price was certainly a consideration, they wanted to make sure that the remodeling firm was reliable and had a good reputation. In the end, they did not hire the lowest bidder. They chose the company that they felt most comfortable with and consistently gave them excellent service.

Working with an independent kitchen designer and separate general contractor is another popular approach to kitchen remodeling. Similar to design-build firms, independent designers can help you explore the many possibilities for your space and have many resources at their disposal. Many kitchen designers can recommend contractors that they have experience with to bid your project. This approach is a good option is you want to create your design first and then take it out to bid to several companies. It is also a good way to go if you don’t have a committed timeframe for your project or want to get of sense of what you can do with your space before you make a commitment to move forward.

If this sounds like the approach for you, we advise you to start by interviewing several designers, looking at their portfolios and visiting some of their completed projects. The National Kitchen and Bath Association and recommendations from friends are good referral sources. When you’re plans are done, then you are ready to interview contractors. If you can hire a contractor that has a working relationship with your designer, this is always best. There are many issues that often come up during the remodeling process that require field decisions on design. You want to make sure that your designer and contractor can communicate with each other so that your project doesn’t suffer.

Do It Yourself

Nathan and Selene were in their early thirties and living in their first home together as a married couple. With no children in the picture yet, Selene was focused on her career as a physician and Nathan was self employed in a seasonal industry that allowed him time to work on projects around the house. Over the past few years, Nathan had successfully renovated much of the house by himself. With only the kitchen left and a tight budget, Nathan knew that it would be more complicated than the other rooms. He decided to hire a designer to help him plan the kitchen and then he would remodel it himself.

Nathan and Selene hired a designer to help them with their kitchen plan. Nathan also consulted a contractor during the construction process when he needed some direction on how to approach a couple of problems he encountered. Nathan not only had the time, motivation, and skill to succeed, but he also knew his limitations and built his support team before he started. As a result, his project was a success.

Many cost conscious homeowners will attempt a kitchen remodeling project on their own. This can be a huge undertaking and a full time job, at best. In this scenario, the owner is responsible for scheduling all of the subcontractors and coordinating the project. If there is a problem or things get out of sequence, the owner is responsible for handling it. If you are considering this approach, we recommend that you hire an independent kitchen designer to help you plan the space and recommend subcontractors. If you’ve never done this before, we recommend that you find a contractor that would be willing to be hired as a project consultant in case you run into problems that are over your head.

Some homeowners tend to rely on cabinet shops for their kitchen plan and retail sales people to advise them on their products. This can be a mistake. First, cabinet plans are not a kitchen plan. They do not give you the full scope of work, a lighting plan, and mechanical plan. Secondly, you can easily order the wrong size sink or oven if you don’t know how to read your cabinetry plan. Buyer beware. These kind of mistakes can cost you thousands of dollars. It’s best to invest some money in a good set of plans if you’re going to manage the remodeling part yourself.

Summary:

1. Decide on the approach that best fits your needs: design-build, independent designer and contractor, or do it yourself.

2. Once you've determined your approach, compare apples with apples. In other words, interview several companies within the same approach. If you try to compare a design-build company to an independent contractor, you will be comparing apples and oranges.

3. Visit the following websites to help you get familiar with resources that fit your approach. Each of these organizations have links to their local chapters that you can access from these national websites. This will help you connect with companies in your area.

National Association of the Remodeling Industry: www.nari.org
National Kitchen and Bath Association: www.nkba.org

No comments:

Post a Comment