Bathroom

People getting their homes remodeled are primarily concerned about two things: 1) Getting the job done right, and 2) Getting the right price.

In pursuit of the latter, some homeowners will look into a cost-plus contract. This is the topic of a recent blog post on Markup and Profit.

Essentially, a cost-plus contract means a contractor is paid for allowed expenses plus a little extra to allow for a profit. In theory, it sounds like a good idea. In practice, it’s another story.

First, customers don’t know what the final price will be. In a standard, fixed-price contract, the buyer and seller agree to a price, put pen to paper, and work goes until completion. Both parties agree to what work will be done, how long it will take, and how much it will cost. Everything is clearly defined and both parties know what to expect.

Under a cost-plus agreement, those parameters are not crystal clear. A job will start at one point, but then might take a different direction due to customer input, such as haggling over supply costs or the like, and delays will occur, leading to more costs.

This leads to a second major criticism of cost-plus contracts: a collapse of efficiency. Jobs under cost-plus contracts take more time because there is no true deadline, no incentive to deliver efficiently. This hurts both parties. Contractors are hamstrung by customers signing off on approved costs. Both parties will agree on what needs to be done, but might have different ideas on how to complete it. A contractor may want to use a certain product for a variety of reasons, but a customer might not approve it because he or she is strictly operating on dollars and cents. That can lead to a subpar job, making both parties unhappy.

Finally, cost-plus contracts require more oversight on contract details by both parties. In addition to killing efficiency, the constant back and forth between a client and contractor can lead to resentment. A client might think a contractor is wasting time, and a contractor could be frustrated that his or her expertise is not trusted. As the blog notes, it comes as no surprise that more cost-plus contracts result in litigation.

A fixed-price contract allows for a healthy dose of communication. The dynamic is different in a cost-plus job. And it’s always a costly one.

Have a good week!

My boss is in Las Vegas this week at the Kitchen & Bath Industry Show (KBIS), so I’m feeling a little jealous.

On that note, be sure to be on the lookout for our coverage on the latest and greatest from KBIS here and on our Facebook page.

Now, while I am not attending KBIS, I am still tracking things going on in Las Vegas, such as the unfortunately abbreviated International Builder’s Show (IBS).

One of the cooler things I’ve seen is how some builders are using Augmented Reality (AR) or Virtual Reality (VR) to show homeowners what a completed project can look like — before any work actually begins. 

Check out our video about augmented experience right here!

Imagine laying out your dream addition on an iPad, queueing it up on screen, and then slapping on an Oculus Rift and walking through it! It’s now totally possible and totally cool.

Back to reality for a moment, getting a solid return on your investment, more than 80% in some cases, is a big goal of remodelers.

This video from Fox 8 in Cleveland offers some great advice on remodeling trends and tips for getting the most bang for your buck. 

If you’re a regular reader of this blog, then you’ll notice it underscores a lot of what we’ve been talking about. For instance, a garage door offers a top return on investment. They start anywhere from $1,600 to several thousands, depending on size, brand, and timeline.

The expert in the video mentions curb appeal many times. Curb appeal is very important, especially if you are selling soon. Let your neighborhood guide your decisions.

Sometimes it’s as easy as replacing the front door and touching up the entryway. (Talk about a first impression!) Other times it could mean adding stone facing to the front of your house, which is popular in some places, or maybe simply tidying up landscaping.

The video also identifies current trends, such as more spacious showers and bathrooms. While there is a movement toward fewer tubs, most real-estate professionals will recommend having one tub in your home if you are looking to sell.

Hope you have a great week!