Before the Hammer: Assess ALL Costs of Your Remodel

Many homeowners, new or seasoned, feel as if they're one or two remodeling projects away from that tantalizing notion of their "dream home." Higher ceilings in one room, an open kitchen, an upgraded bathroom ... in the myopic mind's eye of the homeowner, it all seems so simple.

But reality is often harsher: Even the most seemingly basic remodeling projects can be riddled with unforeseen costs and unexpected hang-ups that few prepare for, yet almost everyone encounters. Addressing them before the first hammer falls is the only way that you can ride out the remodel storm without breaking the bank.

The 20-Percent Rule

An accepted rule of thumb as far as remodels go, whether it be for a bedroom or complete overhaul, is to set a budget and then add at least 20 percent. Even the most diligent and judicious homeowner is likely to run into some previously unforeseen issues, and the best information for anyone undertaking a remodeling project should be hope for the best and prepare for the worst.

"When it comes to the budget and how much money the homeowner wants to spend, most people have some idea of what that should be," says Richard Hofmeister, principal architect at REGENARCH. "But in my experience it's usually half of what they need."

This is your home, and you may have done your homework, but unless you're a designer, general contractor or architect, your ideas will likely be bigger than your wallet.

"There is so much at stake, so if people get into a remodel project and there are issues and change orders and additional costs, how do they see that coming or plan ahead for that?" Hofmeister asks. "The simple answer is that you can't, so you have to go into a remodel carrying at least a 20-percent contingency so that you're prepared for most of the 'what-if' scenarios."

Exploratory Demolition

In seven years working with homeowners on design and remodel projects, Los Angeles-based artist and designer Matt Locke professes to having seen it all, or at the very least most of it. That is why he is a proponent of exploratory demolition, or "probing" -- a practice in which the contractor or designer cuts easily repairable holes into the existing walls and floors, "to see ahead of time what kind of nightmare you may have later when you build."

But even he and his crew were stunned on a recent job in which the homeowners had wanted to add a deck to a second-floor bedroom. After cutting a hole into the floor, Locke came upon layer after unexpected layer in what could only be described as a spider web of code violations.

Apparently what was now a floor had once been a roof with a shallow pitch, and the previous homeowners had used everything from self-leveling concrete to plywood to cover the shingles.

"It was one surprise after another, and once we got through the six layers, we found that the studs were way too far apart and not up to code," the still mystified Locke says. "Pretty much everything about the structure had to be replaced, and all the homeowners had wanted to do at the start was to add a balcony."

Think of probing as looking before you leap, checkbook in one hand, sanity in the other.

"It's a great idea," Locke said, "because it costs homeowners a couple hundred dollars and a crew can assess the framing, the condition of the wood, check for termite damage, look at the condition of the electrical and make assessments based on evidence rather than guessing."

Paper Trail of Tears: Permits and Codes

There are over 35,000 towns and cities in the United States, each with overlapping but individual sets of rules as far as building permits -- these lay out the minimum standards for construction -- and permit fees are concerned.

Depending on what your project is, you will need permits based on these codes:

the Uniform Building Code, the National Electric Code, the Uniform Mechanical Code and the Uniform Plumbing Code may become your Four Horsemen of the Apocalypse. Each of these codes -- which vary depending on your city or town's rules -- influences your grand remodeling plans as far as what materials can be used, who can do the work and what structural requirements must exist before the work even begins.

The Uniform Building Code covers standards for safe construction and fire prevention, the National Electric Code is the standard for the installation of electrical wiring and equipment, while the Uniform Mechanical Code covers all areas of heating, ventilation, air conditioning, and refrigeration systems. The Uniform Plumbing Code is what must be followed during the installation and inspection of plumbing systems.

The permit process, dictated by whichever aforementioned codes apply to your remodel, most likely will involve an application fee, possibly a plan review fee, and then the permit fees themselves. The operative word in your remodel at this point is "fee".

"You have to get a city permit for everything," said Hofmeister, who has 20 years of experience in the field, "but if you're not moving fixtures around and there are no structural changes, then it can be an over-the-counter, express-type permit."

Express permits essentially cover all the work that you most likely can do yourself, including window or door replacement, wet sandblasting and limited dry-rot repair — but for the bigger jobs, it's best to rely on a little bit of knowledge and a lot of assistance.

"It helps if you have a working knowledge of the rules, but it's not required, because whoever you hire should take that responsibility on," said Matt Locke, a Los Angeles-based artist and designer. "There is a baseline, so things like the spacing of framing members in a wall or the thickness of drywall for fire resistance that are across the board -- but even with those rules in place, they change over time."

The permit process, depending on the size and complexity of the job, can take days or weeks for approval, but now most cities have a Department of Building and Safety website that includes a permit fee calculator that can give you a better notion of what fees you may be facing.

For example, in Los Angeles a residential alteration or repair project estimated at $10,000 may end up costing you between $400 and $500 in permit fees, while in Chicago, the same project fees are based not on cost but on square footage and may openly run you between $200 and $250.

Vacating the Premises

Unless you're a fan of sawdust in your coffee, the sound of early morning hammering and the chatter of grown men, it's a safe bet that you and your family will not want to be around during the heavy lifting of any remodel.

"That's a big deal, whether or not you live in the house while the remodel is taking place," Hofmeister, himself a family man, points out. "We always recommend, if people can afford it, that they should just plan on other accommodations, especially if they have kids or pets."

While you may be able to handle the inconvenience of a working crew in your living space, the real question is, can the people you've hired handle working around you and your schedule, or are you just adding to the cost of the project with your presence?

"You can design a project around allowing people to stay in the house, but it has to be part of the phasing or the planning of the project, and that's a very unique circumstance," Hofmeister said. "Even then, they're still going to have to move out while we're doing the plumbing because for two to three days you can't use the plumbing, so depending on what scale project you're talking about, you'll be checking into a hotel or renting an apartment for a few days, a week, a month, maybe even a year."

You don't want to disrupt you or your families' routine too much, and in the best-case scenario you can actually plan a vacation so that you are away together while your home is being worked on.

If it's a short-term project you most likely can find nearby family and friends to stay with, but in the back of your head you should always remember Benjamin Franklin's famous utterance: "Fish and house guests smell after three days."

If you opt for a hotel stay you can spend anywhere from $50 to $550 per night, but the average cost of a three-star rated hotel is $125 per night, per room.

Budget and Health Hazards

If you're remodeling an older home -- particularly one built before, or around, the early '70s -- then you're likely to run into hazardous materials such as asbestos, lead paint or mold. Of course, the best thing that you can do for anyone living in your home is to locate these offenders and have them removed as quickly and cleanly as possible, but that's yet another task that should not fall into the DIY range.

"Most of these homes will have something like that, whether it's an old furnace flue that's wrapped in asbestos as a fireproofing material, or lead paint in the moldings or the trim," said Hofmeister. "So if you're a DIY type, it's really more prudent and beneficial to hire an abatement contractor to come in and deal with it rather than having it be exposed to you or your family."

Professional asbestos removal, depending on the size of the job and where you live can range from $200 to $400 per hour, not including the costs of a professional assessment before and then after the process is completed. Mold removal, depending on the level of infestation, may end up costing you anywhere between $2,000 and $6,000, and that is if it's only limited to your crawl space or basement.

"If you find asbestos, the rule nowadays is that if you don't disturb it you can leave it, but as soon as you get it airborne, you need an abatement crew, and that costs money," said Locke, who points out that there may be other hidden hazards and costs lurking behind your walls, particularly in older homes.

"More often than asbestos, if it's an old property, what you find is electrical that is quite old-school, that's wrapped in cloth instead of plastic, or outdated breaker boxes and all sorts of things that can potentially create a fire hazard," Locke said.

No matter what your remodeling project may be, respecting the process and doing due diligence will only get you so far in terms of preparing for the unexpected. Anticipating the cost beyond the details of any project will mitigate some of the shock and surprise when the contractor hands you the bill.