How to Effectively Work With Contractors When You’re Renovating to Sell

As you gear up to prepare your home for sale, real estate experts agree that now isn’t the time to take on any major renovations that aren’t absolutely necessary. However, only 55% of Americans tend to home repairs right away, so you could have some deferred maintenance to deal with before you list and you’ll have people viewing your house with a microscope.

Unless you’ve got a license to do highly skilled repair work, that could mean you need a contractor’s help…Like, yesterday.

However, expect it to take more than just a phone call and quick consult to get the shower retiled or electric work repaired. A new survey from the Associated General Contractors of America (AGC) revealed that 80% of construction firms say they’re having a hard time filling the many positions they need to hire as home remodeling budgets rise.

“If we scooted back 3, 5, 7 years ago, when the market was a little bit different, you’d have no problem finding a contractor,” explains Dan Jones, a Charlotte-based real estate agent who’s sold over 300 single-family homes. “Unfortunately, it’s really hard right now.”

We spoke with real estate agents, experienced contractors, and homeowners on how best to work with contractors when there just aren’t enough to go around.

Schedule your project during the offseason

Contractors are an incredibly busy and in-demand bunch, but home renovations do follow some seasonal patterns. According to HomeLight’s Top Agent Insights Survey for Q3 2019, 91% of real estate agents (who do a lot of coordinating with local contractors for their clients) believe builders and contractors are busiest in spring and summer.

Meanwhile, two-thirds of top agents say that building materials and labor for home renovations are the cheapest between October and March.

Whether your house needs fresh flooring or new countertops to be marketable to future buyers, tackling necessary projects in the fall or winter could save you money. Before you take on any major work around the house, though, check out HomeLight’s list of projects with the best and worst ROI to make sure it’s worth doing.

Give contractors as much information upfront as possible

“Contractors are already spread so thin, it’s just doing the simple things beforehand to save them the legwork,” Jones explains.

As you reach out to contractors, don’t wait until they come to your home for a consultation to explain your needs. In initial outreach:

• Take photos and videos of the space.
• Include links or references to the work you’d like to have done.
• If applicable, include the make, model, and serial number of the item that needs to be repaired.

For example, if you need to hire a professional house painter, provide your candidates with a 7- or 8-second video of the big space, as well as any ceiling work that needs to be done, to give them a clear idea of the project’s scope. The more information you provide from the beginning, the easier it is for a contractor to understand the nature of the job, and whether they have enough time to complete it.

Do your research and shop around

Before you ask for quotes, research the average cost of the improvement on your own. “A prerequisite is knowing what it’s going to cost. So when you see a good deal, you can go for it,” explains Jones.

Sites like HomeAdvisor (which has a network of professionals in over 500 home-related services and 70+ accumulated years in the industry) and Thumbtack (a company that offers skilled professionals in over 1,000 home-related services) provide the average cost of repairs on projects nationally, giving you at least a ballpark figure to work with.

Even better—speak to some local trusted friends, family, or coworkers about how much their recent remodel costs for a more accurate point of reference.

Keep in mind that if you’re willing to pick out materials and do some legwork on the overall aesthetic you seek, you could avoid paying a design fee which may amount to 10%-20% of the total renovation cost.

Contractors who themselves come with a great eye for design (and don’t need a firm to do that portion of the work for them) can work off your Pinterest or Houzz inspiration. Just be sure to check out some pictures of their past work to make sure you like it.

A word to the wise, when it comes to remodeling and renovation work, you get what you pay for. “An inexpensive bid with low quality is of no value. A high-quality bid at over-inflated prices is again of no value,” says Ron Humes who spent over 20 years in the building and remodeling industry.

“The key to evaluating two competing bids is to ensure that the bids received reflect the exact same services and materials.”

A shortage in the workforce also means contractors can charge much higher than average for some projects. With your research in hand, you can collect multiple bids with the context you need to find the best deal.

Get the right type of contractor for the job

In the home improvement world, contractors fall into two broad camps:

Subcontractors

These contractors focus on individual services in skilled trades, such as plumbing, electrical, framing, concrete, drywall, painting, flooring, and carpentry. Some may have professional licensing, but not all do.

“If the project is very limited in scope, and the consumer has the time and experience necessary to provide oversight, they may be able to get away with hiring and managing an individual subcontractor to complete the work,” says Humes.

General contractors

Whereas subcontractors work on small specialties, general contractors focus on big-picture projects.

“One general contractor can be hired to oversee all the plans, specifications, permits, materials, and labor needed for the entire scope of the project,” says Humes. General contractors will often come with a permanent team, meaning you hire a single general contractor, who brings an entire team.

Unless you want to spend time overseeing each subcontractor, large projects like a home addition or remodel call for a general contractor’s oversight. However, hiring a general contractor on their own for a small project, like replacing the flooring, could mean you’ll overpay for expertise and experience you don’t need.

Get recommendations from your real estate agent

When looking for a contractor, your first instinct might be a Google or online listing service, but “beware of online reviews and ranking sites,” warns Humes. “While some valuable information can be obtained online regarding contractors, there are many ‘pay to play’ sites whose rankings reflect the amount paid by the applicant.”

It’s best to rely on recommendations of people you trust, which includes your real estate agent. Most agents have a list of trusted vendors. The introduction benefits both parties; a busy contractor knows you’re a trusted reference, and you’ll have a vendor with a record of good work that’s trusted by your agent. With an established relationship, it’s more likely the contractor will accept the project and complete it.

Hire for the right experience for the job, not just the highest reviewed

A contractor could be an excellent painter with glowing recommendations, but that doesn’t mean they’re qualified to redo your electric work.

The best way to make sure a contractor is suited for a project can be asking about their license.

“Many contractors are only licensed in one construction trade, so, for example, you wouldn’t want to hire a contractor to repair your leaky roof if they are only licensed as a carpenter,” says Matt Daigle, CEO, and Founder of Rise, an online platform for sustainable home improvement solutions.

Hash out your payment terms in advance

Before anyone hammers a single nail, make sure you hammer out the terms of payment. “It’s standard practice for contractors to require a down payment for the project, but it should be a very small part of the total project cost,” advises Daigle.

The payment terms should be included in a larger contract, which stipulates how many installments you’ll pay and how you’ll pay them. You can even delay the final payment until the end of the project when both you and the contractor agree the job is complete.

If a contractor asking for the entire payment upfront, that’s a red flag. “You should never make a final payment until the work is done and finished to your satisfaction,” warns Daigle.

Define your timeline

One of the biggest points of tension between contractors and home sellers is a lack of communication. The easiest way to set up clear communication is a clearly defined contract and a detailed timeline. Without a clear timeline, delays and miscommunications are inevitable, leading to a project that’s late and over budget.

“A contractor with a clearly defined set of plans is better able to coordinate all necessary materials and labor for the project, which is essential to maintain the schedule and control costs,” says Humes. That doesn’t mean unexpected delays won’t crop up, but you’re less likely to have miscommunications on the project, which can lead to change orders and delays.

Work through worst case scenarios

No matter the simplicity of a project, expenses can pop-up out of nowhere, pushing your project’s budget to the limit. Preparing for the worst can mean fewer surprises for your bank account, like budgeting for what would happen if you knocked out a wall with no issues, versus whether the demolition brings extra complications to light.

“If that’s the best-case scenario, what are we looking at for the worst case? What else could happen?” advises Jones. “Asking really good questions around what else could happen and what costs are included can eliminate surprises.”

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