Why Home Remodeling Takes Longer and Costs More Than Expected

The home remodeling industry is booming as people spend more time at home. With the housing market expected to remain strong, many homeowners are looking to remodel their homes. Unfortunately, home remodeling projects often take longer and cost more than anticipated. Even if you find a trustworthy contractor with a solid track record, numerous variables can cause delays and increased costs.

A good rule of thumb is to expect your home remodel to cost 50% more and take 50% longer than initially estimated. If the project finishes within these parameters, you’ll feel satisfied. If not, your expectations were too high. Happiness in remodeling is about managing expectations.

A Homeowner’s Experience with Home Remodeling

Mike is a homeowner, and has completed four major home remodels, none of which were pleasant experiences. Every project took longer than expected. After his first two projects, Mike learned that some general contractors (GCs) play games to extract as much money from homeowners as possible.

If you’re planning to buy and finance a fixer-upper and remodel it, be aware that the permitting and remodeling process can be a significant hassle. If you don’t handle stress well, purchasing an already remodeled home might be a better option.

Given the challenges of remodeling today, fully remodeled homes will likely sell at a premium. Many people will be willing to pay more to avoid the time, stress, and relationship strain associated with remodeling. With the cost of labor and materials rising since the pandemic, buying a remodeled home may be a better deal.

Example of Home Remodeling Challenges

In 2014, Mike bought a fixer-upper in the suburbs of Los Angeles with beautiful mountain views. His GC, also a colleague from a local sports club, mocked him for spending $7,000 to replace his 40-year-old gravity furnace lined with asbestos. The GC claimed he could have done it for $3,000, though Mike thought he only handled bathrooms and kitchens.

When Mike’s GC bid $9,000 to paint the interior of his house, Mike was shocked. He found another painter for $7,000. After learning this, his GC suddenly offered to do it for $5,800. Mike didn’t take the bait, but his $7,000 painters quit after two days, harassed by his GC. Mike then asked his GC to do the job for $4,700 ($5,800 minus $1,100 already spent). The GC refused, citing the $5,800 offer as a one-time deal, and proposed $7,000 minus $1,100. Ultimately, Mike negotiated with a new painter for $6,400.

Why Does Home Remodeling Always Take Longer and Costs More?

• Winning the Contract: GCs often bid low to secure contracts, knowing they can raise prices later due to “unforeseen” issues.
• Hostage Scenario: Once a project is underway, GCs highlight unexpected problems to justify additional costs. Homeowners, already invested, are unlikely to reject further work.
• Emotional Influence: Homeowners’ emotional attachment to their homes can lead to increased costs. GCs may exploit this to charge more.
• Default Thinking: Experienced homeowners expect projects to overrun. GCs may take advantage of this mindset to inflate costs.
• Smile and Charge: Some GCs are adept at persuading homeowners to accept additional work, often with a friendly demeanor.
• Neighborhood Pricing: GCs may charge more in affluent areas, assuming homeowners can afford higher prices.
• Suggestive Remodeling: GCs often suggest additional projects once work begins, increasing costs and time.

Strategies to Keep Your Remodel on Budget and on Time

Get Multiple Bids

Compare detailed bids and be willing to walk away if necessary. Ensure the contract is thorough and enforce it strictly.

Have Alternatives

Maintain a list of alternative contractors to keep your GC honest.

Include a Late Fee Clause for a Contractor

Set a conservative completion date and include penalties for delays to keep the project on schedule. This advice might keep your GC very organized as no one wants to pay out of pocket.

Planning and Building Department Delays

Delays are also common due to inefficiencies and occasional corruption within the Planning and Building Departments. During the pandemic, these departments struggled to transition online, causing further delays.

Managing Expectations

Lower your expectations for home remodeling. Expect delays and higher costs, but don’t share this with your GC. Educate yourself about the remodeling process to avoid surprises and negotiate hard with your contractor.

Home remodeling is challenging, often leading to frustration and financial strain. Yet, successfully navigating the process can increase your home’s value. Given the current difficulties, fully remodeled homes are likely to command higher premiums.

By managing your expectations and following these strategies, you can better handle the complexities of home remodeling.