Choosing a Contractor

Getting started with
home renovations

We understand how stressful home renovations can be, but even the stress of choosing the best contractor is too much for many homeowners. In our opinion, the following steps provide the most logical, fair, and equitable process to both homeowners and contractors alike. Following these steps for choosing a contractor can help to minimize surprises, save time and money, and prevent frustration, providing a clear and decisive path to getting the best home renovation possible.

 

  1. Compile a ‘wish list’ of everything you want/hope to see in your renovation project. This list will provide the base for the overall scope.
  2. Select a design professional and present your wish list to them. A designer can give you an idea of how your ideas will come to life.
  3. Learn about the different types of contractors and business models. A brief understanding can help you decide what’s best for you.
  4. Hire a contractor based on your research and the quotes provided by each. They should be fully licensed, bonded, and insured.
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Project management, or construction management, is the model we use at Trademark Renovations. During our transparent process, we compile a budget with a full breakdown of actual costs based on the initial drawings and project requirements. Homeowners pay the actual builder/wholesale prices, and there is no mark-up for change orders and extras. All payments go directly to trades and suppliers to eliminate the risk of builder liens.

Fixed-price contractors attract homeowners with promises of low, lump sum fixed prices. While the initial line-item quote may seem reasonable, the markup for extra work required due to latent issues, extras, upgrades and changes is high. Fixed-price contracts also put the homeowner at risk for builder liens as the contractor collects and distributes all payments.

Much like fixed-price contractors, design-build contractors use a lump-sum, fixed-price quote. However, design-build contractors prefer a commitment ahead of time, requiring a non-refundable deposit before design commencement. This model may prevent you from receiving other quotes or changing contractors if you’re unhappy with the work. 

Though most homeowners interpret ‘cost’ to be the actual cost of the work or materials, it typically includes a percentage profit for overhead. The ‘plus’ refers to the management fee. Cost-plus contractors will often advertise a low project management fee. However, the markup on products and services typically makes the overall project more expensive. 

Project Management Fixed Price Design-Build Cost-Plus
Separate Line Item Costs
Wholesale Prices
No
No
Yes. (Not Wholesale Prices)
Transparent Quoting
Yes
No
No
No
In-House Trades
No
Rarely
Rarely
Rarely
Sub-Contractors
Yes
Yes
Yes
Yes
Mark-Up/Fees
21-28% Management Fee
35-45% Mark-Up
35-45% Mark-Up
35-45% Management Fee + Mark-Up
Change Orders & Upgrades
No Charge Premium
50-70% Mark-Up Premium
50-70% Mark-Up Premium
40-70% Mark-Up Premium
Product Selection
Unlimited
Generally limited
Generally limited
Unlimited
Payment Terms
No Milestone Payments / Pay As You Go
Advance Lump Sum Milestone Payments
Non-Refundable Deposit Required Prior to Build & Milestone Payments
Varies Per Project
Lien Risk
None
Yes
Yes
Yes
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Things to consider when
hiring a renovation company

Now that you know the difference between the types of contractors, you are better prepared to make a decision moving forward. We recommend compiling a list of potential contractors/companies and then taking a closer look. Collect quotes and budgets based on identical specs and scope of work and then judge accordingly.

 

We know the decision is still risky, which is why we’ve identified some things to consider to help you make the best choice.

 

  • In-house trades are not better than sub-trades — sub-contractors are often specialized in their work and have been adequately vetted by the general contractor
  • Review the payment terms and be cautious of advance milestone payments which can often hinder the progress of your project
  • Ask how many projects they will be working on alongside yours (it shouldn’t be any more than 4)
  • Consider the opinions of past and current clients and the work depicted in portfolios and past projects or previous clients’ homes — is it what you’re looking for?
  • Evaluate whether you care more about cost or value
  • Determine whether the contractor is transparent by asking open-ended questions about the business-model
  • Beware of the bait and switch approach

 

Finally, once you make the decision, be sure to communicate often with the contracting company to keep you in the loop. We also recommend never sacrificing quality in the name of time and money. We advertise great prices and, while we stay within deadlines, we begin by setting reasonable expectations.

 

If you want further information about choosing a contractor, feel free to download our free PDF download. Our goal is to add value to everyone in need of a home renovation.

Renos 101:What to Know
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It’s Easy To Get Started

Are you ready to get started on turning your house into your dream home? Book a free consultation with us today to learn about your options and tell us about your project. We specialize in kitchens, bathrooms, home additions and whole home renovations.
We’ve built strong relationships with several suppliers in the city, allowing us to receive unique discounts and preferred pricing. Offering the same low prices to you, we develop a detailed quote so that you know your exact project costs.
We have alliances with talented architectural and interior designers who can bring your vision to life. We’re happy to consult with you throughout the process to ensure harmony between construction and design.
During the build process, all payment terms are scheduled based on work completed and are paid directly to trades and suppliers on a bi-weekly basis, ensuring the project moves forward as efficiently as possible. This business model eliminates builder liens and potential holds on the project.

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