Does Remodeling Boost Your Market value?
Remodeling Values: Costs vs. Value
Popular Remodeling Projects: Costs vs. Value
13 Common Breeding Ground For Mold
Does Remodeling
Boost Your Market Value?
Before you drop $25,000 for a major remodeling or renovation job, it certainly
helps to know if that investment will pay off when you sell your home. Will it
add $25,000 to the resale value of your home, or just make life more comfortable
(or expensive)? It's important information but don't rely on remodeling industry
statistics to provide it, says Kenneth Harney in The Nation's Housing.
Remodeling Magazine publishes the annual "Cost vs. Value Report," a nationwide survey that measures the possible return on investment for various remodeling projects when it comes time to sell. It takes a look at 60 regional real estate markets and 12 types of remodeling projects ranging from kitchen and bath renovations to windows and siding. Through a survey of real estate professionals, the report tries to measure how much and how fast the expenditure will add to a home's resale value.
But the results obtained from these surveys is highly variable, extremely suspect and fraught with potential conflicts of interest, says Harney. Some of the results don't make sense from a state or regional perspective, either. In the 1998 study, for example, a $10,000 kitchen renovation returns 45 percent of its value in Hartford, Connecticut. That same renovation, however, returns a whopping 125 percent in New Haven. The margin of error might have something to do with the methodology, says Harney, which isn't backed by actual sales transactions or appraisals. Similar discrepancies show up in nearly every state and region.
Professional appraisers suggest looking at some basic factors in determining how much money you'll get back from a remodeling expenditure:
1 - Consider Neighborhood
Norms.
Compare your home to similar homes in the neighborhood, and apply common sense
to the decision. For example, if your home has only one bathroom while most
homes have two or more, then it might make sense to install one. But don't go
all out on a luxury, $40,000 master bath with sauna. Maybe a half-bathroom will
suffice.
2 - Expensive Isn't Always
Better.
Sometimes the cheapest renovations offer the highest returns. Exterior paint and
landscaping improvements can add considerable "curb appeal," boosting your
home's salability. Basement rec rooms or swimming pools, on the other hand, tend
to be losers.
3 - What's the Demand?
Always look at your area and the real estate market's relative strength. If
homes are consistently selling like hotcakes, then chances are people will pay
for your remodeling improvements. Also make sure you get your neighbors'
opinions and possibly a professional real estate appraiser's assessment of your
particular plan.
Certain remodeling projects will increase the livability and the marketability of a home. Some projects will actually increase the value of the home and allow an owner to recapture the cost of the updating or additions.
|
Remodeling Job |
Average Job Costs |
Average Resale Value |
Cost Recouped |
|
|
|||
|
Minor Kitchen Remodel |
$ 8,047 |
$ 12,333 |
153% |
|
Major Kitchen Remodel |
$ 22,030 |
$ 28,358 |
129% |
|
Bath Addition |
$ 11,444 |
$ 12,000 |
105% |
|
Bath Remodel |
$ 8,344 |
$ 8,500 |
102% |
|
Family Room Addition |
$ 29,451 |
$ 28,333 |
96% |
|
Master Bedroom Suite |
$ 34,949 |
$ 30,000 |
86% |
|
Siding Replacement |
$ 4,618 |
$ 3,833 |
83% |
|
Two-Story Addition |
$ 53,676 |
$ 43,333 |
81% |
|
Deck Addition |
$ 5,717 |
$ 4,333 |
76% |
|
Attic Bedroom |
$ 22,854 |
$ 17,000 |
74% |
|
Window Replacement |
$ 5,614 |
$ 3,667 |
65% |
|
Home Office |
$ 8,627 |
$ 4,000 |
46% |
|
|
|
|
|
|
Source: Remodeling Magazine's Cost vs. Value Report, National Association of the Remodeling Industry |
|||
Popular Remodeling Projects: Cost vs. Value
Updating and remodeling kitchens and baths will add the most value to your home. In some instances, these projects could possibly return more than 100% of the cost if the home is sold within a year. If the home is kept longer, returns should increase, according to Remodeling magazine.
|
Job Cost |
Resale Value |
Cost Recouped |
|
|
Minor Kitchen
Remodel |
$8,568 |
$8,355 |
98% |
|
|
|
|
|
|
Major Kitchen
Remodel |
$30,779 |
$37,432 |
122% |
|
|
|
|
|
|
Bathroom
Remodel |
$9,044 |
$10,082 |
111% |
|
|
|
|
|
|
Bathroom
Addition |
$13,779 |
$16,820 |
122% |
|
|
|
|
|
|
Master Suite |
$42,398 |
$41,788 |
99% |
|
|
|
|
|
|
Two-Story
Addition |
$72,817 |
$67,655 |
93% |
|
|
|
|
|
|
Attic Bedroom |
$26,734 |
$31,440 |
118% |
|
|
|
|
|
|
Family Room
Addition |
$30,650 |
$32,132 |
105% |
|
|
|
|
|
|
Deck Addition |
$7,942 |
$6,595 |
83% |
|
|
|
|
|
|
Replace Siding |
$5,099 |
$1,717 |
30% |
|
|
|
|
|
|
Home Office |
$8,272 |
$5,597 |
68% |
|
|
|
|
|
|
Replace
Windows |
$7,456 |
$7,139 |
96% |
|
Source: Remodeling magazine, November 1999 Cost vs. Value |
|||
A Contract between YOU and Your Home Improvement Contractor is a legally binding document that details the expectations and responsibilities of all parties involved in a project. It clarifies the goals of both homeowner and the home improvement contractor, and it protects each party's rights regarding the project.
Now Get Started with Your Home Improvement, Home Repair or Remodeling Project!
Your contract should include the items listed below. Scroll down for a thorough overview, or click the links below for a summary of each item. Keep in mind that this is simply a guide - contracts vary significantly by project.
CONTACT INFORMATION
It seems obvious, but make sure that you include in the contract the
home improvement contractor's name, physical address, phone number,
insurance company and account and license numbers. If there is a dispute,
you need to know where the company is located (you can't serve a subpoena if
you don't have a physical address - a post office box number won't do!), the
company owner, the name of the insurance and bonding carriers and the way by
which you can reach all involved parties.
SCOPE OF WORK
Require a complete description of the work to be done. This includes
the overall scope of the work as well as individual aspects of the project;
from foundation and framing to all finish work required. The type and
quality of all materials should be spelled out, including manufacturers,
brand name, quantity, weight, color, style, and size. Be sure allowances for
fixtures, floor coverings, etc. are sufficient to provide you with the level
of quality you require. In addition, indicate all equipment, such as
scaffolding or cement mixers, which will be used over the course of the
project. If you have architectural plans, include them in this section as
well.
If you decide to change the scope of the work during the job by either adding or subtracting items, you should make sure there is a written change order, with project cost and timing changes signed off on by both the contactor and homeowner.
PROJECT SCHEDULE
Clearly define the project's start date, and secure from your
contractor the approximate length of time it will take to complete the
project. At the outset, ask that your contractor convey all potential
conflicts that might arise due to other projects with which he or she is
concurrently involved. You will find that most contractors are reluctant to
sign a contract that includes late penalty clauses, but it still may be an
item that you care to pursue. Finally, specify the time that workers will
arrive and depart each day, and mention the days, if any, that they are not
to work.
SCHEDULE OF PAYMENTS
There are no hard and fast rules as to how a contractor collects his
or her fees. Some don't collect until the work is completed, while others
ask for 50% up front. The average is three payments; the first when the bulk
of materials are delivered or when a foundation is poured; a second payment
when the job is half complete; and 20% when the job is essentially complete.
A holdback of 10% is normal until the job has been inspected and the
paperwork is complete. There are two customary ways of paying for a large
job:
Cost plus flat fee: usually there will be draws set up with the homeowner. The contractor uses the draw to pay actual versus estimated costs, and submits all receipts and accounting on a regular basis. Flat fees average 13% to 20% and are usually paid, along with the draws, as the job progresses. This method allows great flexibility to make changes as the job proceeds, but it is more difficult to estimate the final cost.
Bid basis. Your contractor estimates the job, and provides a contract with all materials and fees included. You and your contractor agree on a payment schedule, referencing stages of completion in the work.
In both cases above, it is up to you to be certain that each stage is indeed completed before handing over a check. If you're not familiar enough with electrical or plumbing work, for example, to know if the proper stage has been completed to make the payment, you might consider hiring a consultant to advise you.
Note: If financing is necessary, be certain that a clause is added stating that the contract is void unless and until financing is obtained.
BUILDING PLANS & PERMITS
Be sure the home improvement contractor states in writing that he/she
will submit any building plans needed to the city code compliance
department, obtain all necessary permits and arrange for all inspections
required. If the work does not pass inspection, the contractor must bear the
cost of corrections.
LICENSING & INSURANCE
Make sure to do your homework on your contractor's licensing and
insurance. Contractor licensing requirements vary by state. Research these
regulations prior to beginning your project, and require that your
contractor provide proof of current licensing if relevant.
Mandate in your contract that the home improvement contractor provide proof
of all required insurance. This should include, but may not be limited to,
general liability and worker's compensation for his or her employees.
CONTRACT CANCELLATION
In nearly all cases, a contract may be canceled within three days
after you've signed it - simply send written notice by registered mail and
request a signed receipt from your contractor.
CONFLICT RESOLUTION
In order to prepare for conflicts between homeowner and contractor
that cannot be resolved, all contracts should include clauses specifying
what forms of arbitration should be conducted and by whom.
MECHANIC'S LIENS
It is not unusual for home improvement contractors to place a
mechanic's lien on a homeowner's property at the time of contract signing.
This is a legal claim to real property until a debt is paid. If you aren't
comfortable with this, make sure the appropriate language is in the contract
forbidding it. Subcontractors may also place liens on a property in the
event that the contractor fails to pay them. Make sure that you get waivers
signed by all subcontractors as they complete their work. Before making
final payments to your contractor, have him or her provide you with a final
release and waiver of any mechanic's liens. These come in two forms:
conditional and unconditional. A contractor will give you a conditional
release in exchange for payment in full by personal check. Once the check
has been cashed, the release becomes unconditional. An unconditional release
can be immediately secured by paying in full with a certified check.
HOME IMPROVEMENT PROJECT
WARRANTIES
Make sure the written guarantee on both labor and materials is
included. This warranty should include the name and address of the party who
will honor the guarantee. Also, the contract should stipulate if it is
either a "full" or "limited" warranty. An average warranty for labor is for
a minimum of one year. Require that you be given all written warranties
provided with any appliances, materials or equipment used in the project.
PUNCH LISTS
A punch list is a running tally of all outstanding items related to
the project that the home improvement contractor must address. Include in
the contract a clause stating that both the homeowner and the contractor
must sign off on all items detailed on the punch list before the project can
be deemed complete.
THE BRASS TACKS
The brass tacks, so to speak, are those little details that can make
the difference between a positive experience and a homeowner's nightmare.
While there are innumerable things that you could address, here are some
specific issues worth mentioning:
Project clean up: Will workers clean up everything at the end of each day? Will clean up require special effort, and at additional cost? Which party is responsible for additional cost incurred?
Equipment on the property: Will heavy machinery damage pavement, patios, the lawn, etc.?
Debris removal: Who is responsible for removing project-related debris from the site, and what is considered removal? Is the curb or alley sufficient?
Toilets: Can workers use your home's toilets, or will you require portable toilets?
Telephone: Can workers use your home phones?
And there are plenty of others - think through and address every way in which your life and home could be affected by a major project prior to signing a contract.
Contact
the local chapter of the National Association of Home Builders (NAHB) - and
ask them for a directory of local members. They have strict membership
requirements, including a code of ethics and ethics committees.
Run
the names on your list by the local building department. Like the trade
associations, the building department probably won't recommend any one home
improvement company - but the people behind the desk will tell you if they
recognize names and will perhaps provide some recent history about them or
find recent jobs they've worked on in the permit books.
Go
to a local lumberyard that caters to home improvement professionals and ask
the people behind the contractor's desk (not the retail counter) about the
names on your list. Like the building department, they might provide some
insight, if not an actual recommendation.
Contact
the local Better Business Bureau (BBB) Consumer Affairs Agency, Contractors
Licensing Board (usually a state agency, if there is one at all), and the
Chamber of Commerce. Don't be too shocked if some of those on your list have
claims against them - home remodeling is one of the most common complaints
reported to the BBB and other watchdog agencies.
Look
in the yellow pages for those left on your list. The purpose here is not to
gauge how much was spent on an ad, but rather how the ad is presented. Does
it mention professional affiliations? Does it list a contractor's license
number, if appropriate? Some builders may advertise a model that you can
visit. While most ads will include buzzwords like "quality" and "service,"
look for other key words like "design services available" and "warranty."
And don't necessarily be wary of a free consultation offer; most
professionals are willing to invest some time to get your business and
welcome the chance to meet you face-to-face to present themselves.
13 Common Breeding Ground For Mold
Problem #1
Leaky air-conditioning duct joints, especially those running through a hot attic, create a moist environment for mildew.
Solution: Seal all duct joints with the special flexible mastic available heating and cooling supply stores.
Problem #2
In warm environments, impermeable vinyl wallcoverings can trap moisture-laden air as it moves from the warm exterior to the cooler interior. Mold degrades the drywall and adhesive behind the vinyl wallcovering.
Solution: Use paint or apply wallcoverings with permeable paper backings that don't trap moisture on exterior walls.
Problem #3
When washing machines in a room without a floor drain overflow or hose connections burst, water with no point of exit will soak into adjacent carpet, drywall and insulation.
Solution: Always provide a floor drain near the washing machine. Install an overflow pan directly under the machine or install a 1-in. lip at the doorway to contain overflows in main-level or second-story laundry rooms.
Problem #4
Water-resistant drywall used as a the backer quickly degrades once subjected to moisture.
Solution: Install cement backer board, which will remain structurally sound even if repeatedly subjected to moisture.
Problem #5
Poorly ventilated bathrooms allow surface mold to grow.
Solution: Install a bathroom fan (or at least, open a window) to exhaust moisture. Remove surface mildew by scrubbing the area with a 1/2 percent bleach solution. When the area is dry, prime it with an alcohol-based, white pigmented shellac, such as Zinsser Bullseye, and use a paint containing mildewcide.
Problem #6
Poorly constructed crawlspaces promote mildew growth. Bare earth floors transmit huge amounts of moisture.
Solution: There are many regional differences and solutions. Cover bare earth with 6-mil poly sheeting. Heat, cool and humidify the area the same as the rest of the house.
Problem #7
Freshly cut firewood stored indoors emits huge amounts of moisture.
Solution: Store it outside.
Problem #8
Humidifiers (especially reservoir-type central units and portable units) provide both a growth medium and a distribution system for mold and mildew.
Solution: Clean and treat the reservoir often with an antimicrobial solution, available at most hardware stores.
Problem #9
The condensation pan directly under the coil of your central air conditioner can harbor mold.
Solution: Before each cooling season, clean the pan with a 1/2 percent bleach solution and make sure the continuous drain is working.
Problem #10
Finished concrete basements that haven't been thoroughly waterproofed from the outside are problematic. When moisture migrates through the earth and non-waterproofed concrete walls, it can get trapped behind vapor barriers, carpet, layers of insulation and drywall.
Problem #11
Yards that slope toward foundations invite water to enter basements and crawlspaces.
Solution: Regrade yard surrounding house so it slopes away at a rate of 1 in. per foot.
Problem #12
Improperly flashed or caulked windows (and those with large amounts of surface condensation) let moisture seep the surrounding wood, drywall and insulation.
Solution: Properly flash and caulk windows during installation; minimize condensation with good ventilation and airflow.
Problem #13
Leaky flashings and shingles allow rain to infiltrates and other areas that can trap moisture and be difficult to inspect.
Solution: Perform yearly roof inspections--even if you do it from the ground with binoculars.
Besides damaging your house, mold can cause severe health problems.
IT'S DOING THAT TO MY HEALTH?
One consultant we interviewed confessed he crawls around in moldy places day after day, month in and month out, and never suffers ill effects. Others--some estimate about 10 percent of the population--are severely allergic to mold. It's primarily the dinky reproductive spores that people react to. Twenty of them sitting side by side could fit across the period at the end of this sentence. That means they're hard to filter out. The spores also have an incredible "hang time" (as my teenage son would say); they're able to stay suspended in midair for hours on end. That means they're easily inhaled.
With even slight exposure to molds and spores, sensitive people may experience headaches, runny noses, skin rashes, nausea, sinus problems, memory loss and coughs. They may feel listless for long periods of time. In short, they feel as though they have a perpetual case of the flu. Newborns, the elderly, the sick, and those with compromised immune systems can be affected severely, even fatally. Babies and toddlers, who love to crawl around on possibly moldy carpets and stick possibly moldy things in their mouths, also are highly vulnerable to mold-induced illnesses. Super-sensitive people often go to extremes to rid their houses of the materials that harbor the dirt and dust that molds feed on. They'll replace soft, textured materials with smooth, hard surfaces that are easier to keep clean and less likely to trap debris and moisture. Out go the carpets and draperies; in come hardwood floors and metal window blinds. Out go the cushy couches; in come the vinyl chairs.
Tightly sealed newer houses may be better at holding in heat, but they're also more likely to trap moisture and spores. Mechanical ventilation, like an air-to-air heat exchanger, is critical for healthy air quality in tightly sealed new homes.
In truth, most of us fall somewhere between the two extremes of invincibility and super sensitivity. But even "normal" folks will react to unusually high concentrations of mold and spores. And the time you're most likely to stir up spores and inhale and ingest them is the very time you're trying to get rid of the stuff. That's when you need to be the most careful.
DISPOSE OF IT CORRECTLY OR YOU'LL JUST MAKE MATTERS WORSE
Step one in getting rid of mold is to fix the moisture problem that's setting the stage for its growth. This is key. You can scrub, dispose of and replace moldy materials, but until you fix the problem, mold will keep returning. The fix can be as simple as sealing up leaky air-conditioning ducts (Fig. B) or as daunting as reshingling a leaky roof or regrading your yard so water runs away from, rather than toward, your foundation. Sewer backups and floods also set up ideal environments for mold and mildew growth.
Once the moisture problems are fixed, get rid of the moldy materials carefully. Rough handling of damaged materials will not only stir up spores and spread them even farther around your house but also launch zillions of spores into the air, where you'll inhale them. One square foot of moldy drywall can harbor more than 300 million mold spores; slamdunk that onto the basement floor and you're just opening another Pandora's box. Even dormant spores inhabiting dried-out materials are irritating to inhale, and if they find moist environs again, they can zip back to life and establish new colonies.
The smart way to get rid of moldy building materials
THE KEY TO REMOVING MOLDY MATERIALS is containment and thoroughness. Seal off the area. Create a crude "air lock" door to contain spores and dust by covering the opening with a sheet of poly slit in the center, then cover that with another sheet or flap. Wear a respirator and work slowly and surely. Double-bag or wrap all materials, then wash all remaining hard surfaces with a 1/2 percent bleach solution and let dry.
* Wear a good cartridge-type respirator, available through a medical or safety equipment supplier. One good mask is a Willson triple-seal respirator with a P100 filter cartridge. A simple dust or particulate mask doesn't offer adequate protection. Wear gloves and goggles if you're scraping.
* If your basement or main floor has flooded, get it as dry as possible within the first 72 hours, before mold and mildew can get established. Drill holes in drywall or remove lower sections of it to let the inner wall and insulation dry out.
* Close off any ventilation grilles with polyethylene sheeting and duct tape. Shut down your furnace so the blower doesn't spread spores and dust throughout the house.
* Remove everything--furniture, pictures, lamps--from the room.