I’m certain I’ve spent enough time discussing what the current outlook is for housing. It has been a little dark, sorry. In my defense, I’m just the messenger. It’s funny; I see lots of blogs in the industry calling attention to realities that are not new. Stuff that we as designers have been seeing for a while. Like I said, we’re the canaries in the mine. Things are looking pretty difficult. However, we must forge ahead. For now we operate under the premise that nothing lasts forever!
At this moment I’m addressing people with a golden ticket. You own a home and may have a very favorable mortgage. But, you feel it could serve you better with some modifications. How do we get from here to there in this current climate? In my opinion, you must first assess your resources. I call it surveying the toolbox. You must determine the tools you have and moreover, what’s missing. At the top of the list is finance. How would you pay for this project should it become viable? As a designer, this is among my first questions. Not because I’m concerned about being paid. I need to know if what you envision is realistic or how it might become realistic with some alternate thinking. So, again, the 1st assessment is money. We ask the question, “What is your budget?” Not so simple and a question only you can answer.
- How is your credit?
We tell all of our clients that “cash is king”. Many of our clients say that they plan to pay cash. We recommend to the contrary. Finance. Cash is finite. Once it’s gone, it’s gone. So, keep it in reserve as long as possible. In an earlier blog I think I mentioned the fallout after the crash of ’09. Remodeling and renovation became a rapidly growing market for those folks who still had a home. Unfortunately, most lenders only had HELOC type products for financing. They would appraise your home and then determine how much equity you had to borrow against. Rather limiting and somewhat expensive. So they determined that they needed new competitive products. Most followed the same path to similar products that addressed this growing need. Many not only assess your current value but rather the projected value after the improvements are complete. Very smart. Let’s face it, their ability to recover from a default is a product of the value at that time. So, better lending options arose. They go further though. The lenders determined that poop happens. Duh. That is unforeseen circumstance often arise during a remodel or renovation. Once you start uncovering things, surprises can pop up. Termite damage. Corroded iron waste pipes. Yada, yada, yada. To address this possibility and protect both of you, many provide an “uh-oh” budget to cover the unexpected. They call it a “contingency” budget but really, how boring. When you operate on cash, you are the uh-oh budget. Not a happy place. Also, most lenders do not have a prepayment penalty after the 1st year. This can give you time to assess your options. Remember, you still have your cash. Finally, most lenders either contract with, or have on staff, construction professionals. Architects or engineers that can read building plans and assess them for their true value and practicality. So with a lender, you not only keep your cash but you also pick up another line of protections and inspections that cover your mutual interest. Win, win.
- What is your pain point?
What you can afford is one thing. What you’re willing to afford is quite another. Once you have an idea of the number you CAN finance, you must determine if that causes you any form of constipation. We call it a Maalox Moment. Actually, could be just be dizziness, blurry vision, etc. You get the point. You know, “Just because you can, doesn’t mean you should.” Bottom line, only you can assess your financial threshold. Establish where you cry “uncle!”
At this point you have idea what you can qualify for and moreover, the point where you say “NO”. As a designer, we MUST know that figure. The cost of a build is greatly a product of floor area but also encompasses elements in the project to include technologies and finishes among other considerations. We can only hit a target we can see. It’s your responsibility to give us realistic parameters.
- Have you thought out your vision?
Lots of folks take a great deal of pride in working out a “design”. We do get it. It can be a hoot. For us, it’s more an idea of what you “think” will work. Not a bad thing and often helpful. What we need more is a thought-out description of what you want the design to accomplish in as much detail as you can get on paper. For example, needing another bedroom and/or bathroom is the need for a new family member. How to do that is what we do. You may need more inhouse dry goods storage or an area for family activities. The idea here is simple. Spend time working out what you need the modifications to accomplish. Also, break them down into wants and needs. Needs take priority. Wants are expendable. Our job is to try and develop a design that meets your needs with as many wants as possible while staying within the confines of your established budget. In this tumultuous market, that is a rare skillset. We need to see what you see in terms of function. If ya’ want to sketch out some ideas on Waffle House napkins, we’re all in. Glass houses and whatnot. We’ll never make fun.
- Gather your documents
Depending on the age of your home, you may have things we can use. Original plans for example. Sometimes it may be ideas explored by a previous owner or a previous attempt of your own. Everything helps. In addition look for the following at a minimum:
- Are you in a community association?
- If so, do you have a copy of their published guidelines?
- Are you in an Historic District?
- Does your deed have restrictions?
- Do you have a survey?
A survey is huge. In the Atlanta metro, basically, if you want to expand your house one square inch you need a survey. Not just a common survey either. You need a Boundary Survey with Tree and Topographic features. This is something every homeowner should have regardless. This is a graphic document that shows details of what you own. Whether you remodel or not, you should have this document in a safety deposit box. They are not inexpensive but they are worth more than you can imagine. Seek a reputable surveyor and order one ASAP. They can run from a couple to several thousand dollars and normally take a few weeks to produce. It’s worth it. Until next time….
