Looking over the contract...

Now that you have chosen your contractor to work on your project lets have a look at your contract. Here are some key elements to what you should see in your contract...

1- your contract should have the total price that you are paying & WHAT you are paying for CLEARLY stated.

This should include all the materials & services that your chosen contractor will utilize during your construction project. This contract WILL NOT include anything that you would be adding later. That is called "change order" or "add-on" which I will discuss later on...

As stated before, estimating is not an exact science and materials prices do change frequently. Right now the materials markets are extremely volatile so be prepared to possible have to shell out more money at the end if your contractor had to pay more for your materials than originally quoted to you.

2- There should be a "Scope of Project" or "Job Notes" section of your contract. These notes go more in depth as to what is included in your project. This part of the contract also could specify upgrades and options to the contract that are available. Our company likes to offer the "green upgrades" that everyone asks about. (more about "green" products later on...) These notes will break down your project in pieces that the client can better understand...please see the example.

This part of the contract SHOULD tell you exactly what is going to be done and relate to the price breakdown part of the contract. Every contractor uses a different method of contracts. Some use an accounting software, others use spreadsheets..some use in depth contractor software... so your bids may look very different from what you see here. I wanted you to see a sampling of what you should see. I have seen contractors who use a list of WHAT ISN'T INCLUDED in estimates & contracts which makes it very confusing as to what a client would be paying for.

3- The contract price should be very clearly stated with a payment schedule. As shown in the first image on this page, you can see what the total contract price is for Client A. NEVER PAY A CONTRACTOR 100% DOWN. (If you have a very small job under $2,000.00 & have used the contractor before several times, I would say go ahead). Many contractor's break down their payments into schedules. Some require 50% down, 25% mid & 25% end. Others may break it down to weekly payments, others 1/3's... It all depends on the contractor. If you have a lot of special order items that will take weeks to arrive, it is a good idea to pay for and order those up front so that the contractor doesn't have a long break waiting for materials to arrive. You, the client have to be comfortable with your monetary arrangement. Talk to the contractor about what you are comfortable paying.

With the current credit markets, asking contractor's to order materials on their credit is an option very few are willing to offer right now. For many small businesses, credit lines have been cut dramatically because the usual lenders don't have the money to lend. What hasn't been cut, the interest rates are out of this world!

4- The time line of your project should be clearly stated as well. Again, every contractor will vary in their time lines but make sure it is stated in the contract. You don't want a 2 year kitchen remodel. The time line is just a guide and there are things that happen that could slow down a project. One example is constant change orders and add-ons to a project. Those are the No. 1 setback in a project.

5- Ask for a copy of your contractor's liability and Workman's Compensation insurance to keep on record with your contract.

6- Make sure that the warranty information is clearly stated on the contract. If your contractor SAYS he offers 5 year workmanship warranty, it would be smart to make sure you have that in writing. Make sure that the workmanship warranties from the mechanical contractors (plumbing, HVAC, electricians) is also included in your contract if your contractor is providing them.

7- Be smart. Protect your investment and your money by doing your research. DON'T be afraid TO ASK for contract CHANGES before YOU SIGN. We have changed contracts NUMEROUS times to make sure our clients are 100% comfortable with their contract.

I hope that this has been useful for you! If you are looking for a contractor in Southwest Michigan, I hope that you will give us the opportunity to bid for your project!

More articles coming soon....

Remodeling your Vacation/ Second Home, Michigan

HI! Welcome to our blog! Let me take a moment to introduce our company. We are Reality Construction, LLC aka Lake Michigan Beach Builders. We are a small, family owned company located in beautiful Southwest Michigan on Lake Michigan and specialize in second/vacation home renovations. Our only goal is to give each client what they want or need with quality and integrity.

Over the years we have heard many horror stories about contractors and wanted to give some helpful strategies on how to choose a qualified contractor. Here are some questions we get almost daily. If you have any further questions, please feel free to contact us at admin@lakemichiganbeachbuilders.com.

Q. How can I choose a contractor that I trust to be working on my property when I cannot get there to view progress?

A. It can be devastating to hire a contractor to work on your property, pay him and then return to your property only to find unfinished work and the contractor no where in sight. Here are some tips to making your vacation home renovations successful and how to choose the right contractor.

A good contractor will spend a lot of time with a potential client making sure that they are able to get all of the information available to them so that they can make a fair proposal for each project. Before you decide to start making phone calls to contractors, it is EXTREMELY important that you know EXACTLY what it is that you would like to have done. For example, if you would like to have a complete kitchen remodel and you tell one contractor that you only want the cabinets installed and a counter-top and the other contractor that you want the kitchen gutted down to the studs you are not going to get accurate pricing. Please be very specific on your needs with each contractor. Allow roughly 2 hours to speak with each contractor (depending on the size of your project). Your contractor will need access to the project site and time to answer your questions.

Now that you know exactly what you would like to have done its time to start asking around for referrals...

1. Make a list of contractor's in your area by gathering information from your friends, neighbors or folks at the beach or other out-of-town/state residents. Ask them questions about price, quality and if the job was completed to their satisfaction. If someone wasn't satisfied with their service, they will generally be very forward about that and tell you who to avoid. ***IMPORTANT NOTE*** Ask out-of-town/state residents BECAUSE you do NOT want to hire a contractor that will consistently put your project on the back burner because you are not there to see it not getting done. Though many contractors will have multiple projects going at one time, there is still a clear time line to get your project finished.
   
2. Once you have your list in hand, set aside a few days that you will be in town or have someone meet the contractor at the project site to allow him access. Try to make your appointments at least a week in advance, confirming each appt two days prior to the set time. If you absolutely cannot be in town to meet contractor, schedule a time when you can speak to each one over the phone and ask your questions. Being in town to speak to the contractors face-to-face is preferable.
3. Depending on the size of your project, allow the contractors ample time to get an estimate back to you. Contractors have to do a lot of research to gather pricing data (especially with today's volatile price changes). They are researching the prices on the materials and putting together the labor and overhead charges to give you their price. If you have a large project, expect a couple of weeks for a well thought out estimate.

While you are with each contractor be sure to speak to them. If the contractor gets frustrated with your questions and is consistently looking at his watch (with little time into the conversation/measurements) and seems fidgety, that is probably not the contractor for you. If your contractor has subsequent appts, he should tell you right up front after the introductions that he has another engagement and has allotted x amount of time for you (though at least one hour). Don't let anyone pressure you into signing a contract! If you are not ready, you are not ready. Plain and simple.

The first question to ask each contractor should always be.....ARE YOU LICENSED IN THIS STATE? The reason this is important is this... if you hire a contractor who is unlicensed and he rips you off, you have NO LEGAL RECOURSE. If you hire a contractor who does have a license you can file complaints with the state (in Michigan, I am unaware of other state's laws) and possibly have that contractor's license revoked.

Also, be sure to ask the contractors what their background is? What kind of training have they had? Do they have the proper insurances, etc...

Do not be afraid to ask questions. Most people who hire a contractor are hiring a contractor because they don't know how to repair or remodel their property themselves. Your contractor is the expert for home repair, remodeling. You are the expert at doing what YOU do. Just as you wouldn't go to a stock broker for medical advice.

In Michigan, if your contractor is not licensed, he/she is breaking the law. Ask yourself why this person is NOT licensed and ask him/her why he/she isn't licensed & find someone who is licensed.

okay....Now that you have met with the contractors and gotten all of your estimates back and reviewed them lets look at some key factors..

• PRICE: Obviously, price is a key factor in determining who you will chose to do your remodeling work. While one price may work well for someone else, another person may find it too expensive. The price is going to be based on several factors by the contractor. Estimating projects is not an exact science and can be complicated and time consuming for the contractor. The main factors involved in estimating are materials prices, labor time (man hours and how many men) involve and overhead. Overhead includes that insurances and equipment that your contractor has to pay for to do your project.
  
• ESTIMATED TIME OF COMPLETION: Unless you are actually living in the structure during the project, ETC should be less of an issue than price. The best time to schedule work to be done on your vacation home is during the fall and winter, when you will not be using it.
  
• QUALITY: Has your contractor done other projects in your area? If so, is it possible to see his/her workmanship or get a reference from that property owner/owners? Quality workmanship is priceless! It can save you a lot of time and money in the long run. A GOOD contractor wants to get your project done RIGHT the FIRST time.
  
• COMMUNICATION: How does/will your contractor communicate with you when you are out of town? Will your contractor update you regularly on the progress of your project? Do you have a difficult time getting in touch with your contractor (left many messages over several days and not gotten a return phone call). Will you have to ask your contractor to keep you updated or is it part of the contract? Has this contractor answered all of my questions about this project?
  

See my next posting coming soon! Paying the contractor...