Optimum Remodeling and Home Design Article, Portland Oregon

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Remodeling Guide

1. PRELIMINARY CONSIDERATIONS BEFORE REMODELING YOUR HOME

SHOULD YOU MOVE TO A NEW HOME OR REMODEL? There are several factors to consider in the decision to do a remodel/addition. One is comp values. Your house is valued equivalent to similar houses in your neighborhood. Typically, you can not sell your house for more than comparable houses, and if you over-build for the area, unfortunately, you will not get the value out of your house when you try to sell. It's how the lending institutions operate. Your buyer's lender will send an appraiser to compare your home to the other homes in your area. They will not lend more than the comparable homes. You need to price your remodel so that you do not exceed the value of other homes.

That does not mean that there are not reasons for exceeding the value of other homes: in some situations, it may be worth it to take some loss when you sell. It may be worth it for the view, or the good neighbors, or the schools. There are many reasons to stay in your location and remodel to fit your needs. Smaller remodels are generally not affected negatively by comp values. Many can help the resale value of your home. See the “WHAT ARE YOUR NEEDS” section below to evaluate which projects are most beneficial.

The stay or move issue is a subjective question and can only be answered by the homeowner. Answering the following questions can also help you in your decision to remodel or move.

DO YOU HAVE SPACE? SETBACKS, HEIGHT AND BUILDING COVERAGE For additions, the obvious question is, is your lot large enough to add to your floor plan? Two factors in determining that are setbacks and height requirements. The setback issue is something that you can answer with a phone call to your local building jurisdiction and a tape measure. Some cities and counties have setback and height information online. Once you know your setbacks, you can use your tape measure to layout a footprint for a possible room addition. Depending on the complexity or tightness of your situation, it may require a designer or contractor to help you determine the feasibility of your project. Building up instead of out, is sometimes a solution, but you also need to know the maximum height allowable in your zoning.

Even though you may fit your addition in the confines of your setbacks, you need to also consider the Maximum Building Coverage for your zoning. Some jurisdictions have elaborate schemes for determining the maximum footprint of your completed structure(s). Any outbuildings, such as garages have to be calculated into the formula. If you have a tight lot situation, you need to answer this question before you invest money.

OTHER CONSIDERATIONS

Do you have a neighborhood association (HOA)? You would want to check with them to see if they have restrictions that could affect your remodel project.

Lateral Bracing Requirements can also be a factor in determining feasibility. In the 90’s new requirement were mandated nation-wide, to protect against earthquakes and wind shear. Additions are allowed on older homes, but the additions have to conform to the newer standards. If you are building up however, the existing house under the new addition must also meet the new standards. On some projects, this may require that the existing walls and foundation under the addition be exposed to allow for upgrades. This can add a lot of expense to a project and destroy some the unique characteristics of the existing home. You may need to discuss this with your building official, designer or contractor before you invest in your project.

Have your finances in place before you invest in plans. Talk to your lender before you hire a designer. This is especially true for home equity loans. I have seen deals go down because the financing failed and the owners were out the money invested in house plans.

Is your proposed remodel going to look good from the street? Some additions may conform to the height and setback requirements and give you the space you need, but destroy the curb appeal of your home. That will cost in the long run through regret and loss of property value. You don’t want your house to look “added on to,” or destroy the original character or style. If you are doing a complete makeover, then this item may not be a consideration, but the style of your house is critical for resale value.

2.DEFINING YOUR REMODEL OR HOME DESIGN  

WHAT ARE YOUR NEEDS?  

Most remodels are need driven.  Generally, those needs are fairly obvious; “We need more space,” or “It’s outdated,” or “It would be nice to have…”  Because need drives remodels, cost effectiveness is not always the deciding factor in whether you move forward on a project or not, but it may be worthwhile to consider cost vs. value of various projects.  What are the most cost-effective remodels and what are current housing trends in regards to size?  

Cost-effective Remodels and Home Designs

Remodeling Magazine does a cost vs. value survey each year.  The 2009 – 2010 chart shows that on the West Coast, a minor kitchen remodel has the best payback at 94.8%.  A basement remodel has a potential payback of 91.6% and a wood deck at 91.5%.  Window replacements, major kitchen remodel, attic bedroom addition, two story addition, siding replacement and bathroom remodels fall between 90% and 75%.  Family room additions, master suites, and garage additions fall between 70% and 75%. These are very good numbers.  It means that you can enjoy the remodel work and only lose a minor percentage of what it cost you to complete it.  For more detail and to look up your specific project and get approximate cost and other information, visit their site at Cost vs Value

 Current Housing Trends in Regard to Size of a Remodel or Home Design

Since the Census Bureau started tracking living space in 1973, house size has increased by approximately 50%.  That has been a steady trend through all of those years.  However since Sarah Susanka first questioned the escalation in size in the book “The Not So Big House”, 1998, opinion has moved in that direction.  Energy costs and environmental awareness are two factors that have had a tremendous influence.  The new thinking could be described as “Smaller house with more amenities rather than larger house with fewer amenities.”  I have watched the change in my neighborhood over a five year period.  Large in 2003 was 3000 square feet, but by 2008, it was 5000 sq. ft.  I wonder if many of those large houses are going to retain their value as energy costs continue to soar.  

There is a national trend towards conservation in the size of house plans.  The housing stats all show that.  The question is, will that trend continue as the economy improves.  Many authorities in the field think the trend towards smaller will continue.  Designing houses plans for comfort and quality is remaining steady, but it is being done in a smaller space.  There are many ways of accomplishing that with built-ins, closet systems, and creative, space-saving floor plans.  A sustainable approach might be to reconfigure some existing space to work with a smaller room addition.  Vaults and open rooms can often give a greater feel of spaciousness rather than larger enclosed floor plans.   Use the following links to read more on the subject:   washingtontimes   builderonline
 

SUSTAINABLE CONSIDERATIONS FOR YOUR REMODEL OR HOME DESIGN

There is no question that green home plans are selling better than traditional construction.  25% of the new homes sold in the Portland Metro Area were certified green homes, and they sold for 18% higher than non-certified homes in 2009 to 2010.  There are many reasons for this phenomena, more than can be explained here, but I would like to dispel the misconception that it is too expensive to build green.  If you are wise in the selection of the green features that you use in your project, you can recoup your costs, often in the first year of operation of the home.  As time goes on, the savings only increase.  Green construction actually saves money.  How do these facts pertain to remodeling?  If your existing home is not energy efficient, do you want to increase the inefficiency by constructing an inefficient remodel?  Your remodel might be an opportunity to make your entire floor plan more sustainable.  The payback on some renovations take many years to recoup, but many of them will pay quickly. But remodeling is much more limited sustainability-wise than new house plans.  

Some sustainable energy measures to consider:  You can get a free Home energy Review through Energy Trust of Oregon.  That review will consider weatherization, heating and cooling, water heater efficiency, appliances, lighting and some more exotic measures such as wind power.  These are all items that can lower your energy cost at a minimum cost.  Also, the Oregon Department of Energy offers rebates on many of these improvements. Source for green home sales:  earthadvantage 

Another critical sustainable factor is the health issue.  Out of the 75,000 chemicals licensed for use by the EPA, only 5 are regulated.  Every year 700 new chemicals are introduced into the environment and less than 1% are tested.  Probably only a minor portion of these are harmful, but question is, which ones?  Formaldehyde is a known carcinogen and has been used in many building products, such as particle board in cabinets and floor underlayment, and carpet backing.  Products without formaldehyde are readily available, but if you don’t specify them in your construction agreement, you probably won’t get them (see “CONSIDERATIONS FOR HIRING A CONTRACTOR” below).  

You also may want to specify the use of low VOC (volatile organic compounds) finishes for your project.

3.GETTING YOUR REMODEL OR HOME DESIGN PROJECT MOVING  

WHERE DO YOU START? 

Do you call a remodeling contractor or do you call a building designer?  People do it both ways, but if you call a designer first, it will refine your project and help a contractor to give you a more accurate ballpark estimate.  If you are going to finance your project, you will need that rough estimate to take to your lender.  With a commitment letter from the lender, you can work with the designer to develop a final design and house plans.  When those are complete, the contractor can give you a firm bid.  Oh, there is one other way, and that is to hire an architect to manage the whole project from start to finish.  This is considerably more expensive than going through a building designer.  The management costs of the project could be two, three or even four times as much.  

SUGGESTED SEQUENCE: 

Establish the feasibility of your project. Determine your needs and weigh them against moving or remodeling.  If you are thinking of an floor plan addition, answer the questions posed above regarding setback, height, building coverage, etc. Talk to a designer to establish the most viable options for meeting your needs. Talk to a contractor(s).  You can have your designer refer contractors or call them on your own. Get two or three ballpark figures for your project.

Get your financing in place, which may include a commitment letter if you are borrowing money.

Sign an agreement with your designer and work with him or her to establish a final design and house plans for the project. (see notes below on hiring a designer)

Have your contractor(s) give you a firm estimate.

Get your final financing in place.

Sign a construction agreement with your contractor based on your design and house plans. (see notes below on hiring a contractor)  

CONSIDERATIONS FOR HIRING A HOME DESIGNER

Hire someone who is a good listener and sensitive you your needs.

Make sure that he or she uses a good design process which gives ample opportunity to see your project as it develops and insure that your needs are met.

Make sure that your designer has 3D capability.  Design software has evolved to the point that you can view your completed project in realistic 3D before you break ground.  Don’t settle for less, especially if you have a hard time visualizing the project before completion.  This is critical on projects that will be seen from the street. 

Further, you should have the option of viewing your designs in the designer’s office or via email with AVI video files, bitmap renderings and PDF files.  It is possible to view your project on your own computer as the design develops.

Does the designer have the credentials and references to warrant being awarded the job?  Check them to be sure.

Look at some of their plans.  A good set of house plans (construction documents) is your best guarantee of being satisfied with your completed project.  Your agreement with your contractor is based on the house plans.  If it’s in the house plans, then it is included in the job.  Having detailed, thorough, specific house plans is critical.  Saving money up front on house plans will promote major trouble and cost through the course of the project and even long after the project is completed.    

CONSIDERATIONS FOR HIRING A REMODEL CONTRACTOR

Consult the Construction Contractors Board for checking a contractor’s license and bond.  Also you can check the contractor’s record for claims filed against them.  Check references!  CCB

Make sure that your contractor gives you a firm quote stated in a contract signed by both parties.  Payments should be dispersed as work is completed.  It is not uncommon and should be expected, to give your contractor an initial payment upon signing the contract. If you are not confident of your ability to understand the contract, it would be worth your while to present it to an attorney for review.

The contract should detail every aspect of the project.  Quite often, it will refer to the house plans.  That is why it is critical to have a good set of house plans.

The contract should have allowances for certain items, such as appliances, floor coverings, fixtures, etc.  The contract should have a time frame for completion, and a stipulation that the contractor will provide you with a weekly schedule of the tasks undertaken.  It should specify some temporary facilities for kitchen and bath remodeling if required.  It should specify a degree of jobsite cleanliness, including dust control.  If you want to use healthy materials in your project, this is the place to specify them.

Best practice is not to hire a relative or close friend as your general contractor.  If you go against that advice, the person should be completely legal with the CCB, and it should be treated as strictly a business agreement with a contract similar to the one described above.     

4.MONITORING THE REMODEL OF HOME DESIGN PROJECT  

BE PREPARED

Be prepared for inconvenience.  There will be noise, dust, dirt, and strangers in your house.  The noise cannot be helped, but a cleanup clause in your agreement will help.  If you have screened your contractor properly, you will not have to worry about the strangers.

You should be responsible for your belongings.  Move them out of the construction area.  In non-construction areas, remove pictures from the walls that may vibrate and cover items that could be damaged by dust.  Valuable items should be locked up.

You need to be flexible with the contractor as far as scheduling is concerned.  Sometimes certain processes take longer than expected and unforeseen obstacles can hinder progress.  You should be able to tell if you contractor is on top of the project and keeping it moving within reason.  If he is constantly behind and not meeting his obligations, you need to let him know that you want to refer him to your friends and relatives, but will not be able to if he does not keep the project on schedule.  Regardless of delays, he should still meet the completion window as described in the contract.

If you see a problem, work through your contractor to resolve it rather than speaking to the subcontractor on your own.  He is getting paid to resolve any issues.

Be patient and work with the contractor to see that the job is completed to the terms of the house plans and the agreement.   

UPON COMPLETION OF YOUR REMODEL OR HOME DESIGN PROJECT

If you have properly screened your contractor through checking credentials and references, it is probable that you will remain good friends and have an enduring relationship, but it doesn’t always work out that way.  Even if you become disenchanted with your contractor, keep the channels of communication open.  You will still be dealing with him for the warranty of workmanship and products.

As part of your construction contract you may consider requiring the name and contact information for each subcontractor and supplier, upon completion of the project.  You can also require a copy of all of the inspection reports and warranties for products.  If paint cans are not left on the job, you at least need a list of the paints used.

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