Taking Advantage of a Buyer’s Market Without Getting Taken Advantage of …

The news is bleak, the statistics grim; yet all the reports seem to offer a ray of hope summarized in the oft repeated phrase, “Buyers Market”. We are inundated with rebates, incentives, price reductions, reward points, and tax credits. Building material costs have dropped in some areas and contractors are hungry for work. Whereas, two years ago you couldn’t find a contractor willing to return your call about renovating your powder room, now there are four contractors on your door step competing for the opportunity just to talk to you. What could better, right?  Wrong.

While it is true that building and construction prices are more competitive, it is also true that many builders and contractors need to make more money off each project because there are fewer of them. Herein lies the problem. The residential building and design market has become flooded with contractors and designers that have been laid off from their commercial jobs and are picking up residential projects to help them get by. On top of this influx of commercial professionals, there has been on overall decrease in the number of actual projects. Anytime you have more sellers and less buyers, the advantage goes to the buyer; however, buyers beware.

The adage, “You get what you pay for” and “You can’t get something for nothing” still applies. So how do you take advantage of the buyer’s market without getting taken advantage of ?

• Reputation and References: Only hire reputable professionals that provide you with current references that you actually call and talk to. Don’t hire your neighbor’s friend from church who works out of his 1985 pick-up truck.

• Residential Experience: Do not hire a commercial professional to do a residential project. The two building types are completely different animals. Would you take your child to a vet or your dog to the pediatrician? I hope not.

• Plan Ahead: Decide what changes you want to make to your house and why. Prioritize between “must haves” and “in an ideal world” issues. Research the higher cost items such as appliances, light fixtures, plumbing fixtures, etc. Price compare online, but buy local. If you have a problem down the road, you want someone close by who can fix it.

• Determine Your Budget: Unless you have more money than sense, it will serve you well to determine how much you can spend and how much you would like to spend on your project. Even if you have no idea how much it will cost, knowing how much you can spend will help your designer guide you on decisions. Lenders are being stingy with their loans and appraisals are coming in low. Get pre-qualified for financing before you begin designing.

• Get Drawings Before You Build: If your contractor tells you he doesn’t need drawings to build from, don’t believe him. That’s like going into surgery without the x-rays or ultrasound. You’ll have no idea what you’re getting into. Contractors know that with quality floor plans, details, and elevations they are required to give you what you expect at the price they quoted you. Without drawings, they can constantly raise the price because they can claim that they didn’t know you wanted doors and windows included in the cost of your new bedroom.

• Don’t Automatically Go With the Low Bid: The lowest bid is rarely the best choice. Get at least three bids and if one bid is significantly lower than the others, then they probably left something out or they don’t know how to estimate. Ask your designer to review the bids and compare them with you.

• Desire Quality not Quantity: Bigger isn’t always better, so don’t sacrifice quality building products or methods for more space. Your renovation done right will add value to your home and life, but poorly built additions and renovations will actually decrease your home’s value and result in headaches and repairs galore. If you don’t know the difference between high quality and poor quality building products and methods, you need to hire a designer that does.

This is great time to take advantage of some lower construction costs, but there are also more people willing to take advantage of you in the process. Don’t be afraid to pursue those renovations and additions you’ve been dreaming about. Just be smart about who you choose to help make them a reality.