On top of  the  sticker shock we were also weary about the warranty of many of these appliances being only limited to a year.  We own appliances by Viking, Miele, Thermador, and GE Monogram for a reason.  It’s good to know that the manufacturers we picked stand behind their products for the quality you expect and pay for.  Here’s a story of one such incident…

We decided to purchase the Thermador built in microwave and convection oven combo for its convenience, great styling and of course cooking performance.  We were really excited about the convection oven’s features to be able to roast, broil, bake and convection bake to perfection.  We had talked to many other homeowners and remodelers and for the price value and longevity of longstanding quality we went with Thermador over many other brands.  Everything was fine and dandy until one day we had a power outage and when the power came back, it looked like our Thermador oven’s control panel was on the fritz.  We were lucky and within our one year warranty period and they came out and repaired the unit replacing the circuit board.  The factory service technician finished up everthing in a jiffy but the problem was they didn’t test all the functions of the board.  We don’t bake that often and the self clean function and a whole row of buttons didn’t seem to function.  Of course we didn’t notice this well until just after a year later.

When I called up Thermador customer support, I pretty much got the shoe after the support representative looked up our registration information, even after explaining that their service technician never left me a copy of a checklist testing the unit fully or even spot checking each function before leaving the repair.  You could imagine how distraught my wife and I were after having spending more than $2.5K+ for this oven combo.

Out of desperation and of course thanks to the suggestions of the readers of  this blog, I reached out Zach Elkin, Director of Marketing at the BCD Group, owners of the Thermador brand.  Zach saw that we were just a month and a half out from our warranty period but still decided to stand by their product especially given the hurried circumstances of our initial repair.  He had his customer service manager arrange to have an authorized repair specialist contact us to arrange for another control panel swap.

I’m happy to report that this story ended well, and this is the reason why we love our Thermador built in oven!

Do not fall for the number one excuse that many general contractors offer up - they need a deposit to order or hold the materials.  This is ridiculous for many reasons:

1. if your general contractor cannot “float” $1,000 worth of materials to get your project started then they don’t have the financial backing to execute your project - it’s better to know this up front than pay the price later when things go awry and the general contractor is at fault to cover the added cost
2. if your general contractor truly insists that this is to order materials on behalf of your project - than ask them to draft an order and pay for the materials yourself
3. it’s common practice to “borrow” funds or intermingle funds from one project to another for general contractors who are not keeping their nose clean

Another way to protect your interests in seeing the project through is to insist on a 10% retainer.  This retainer will be paid as a balloon payment at the end of your project and keeps your general contractor on the hook to complete your project.   Again, if your general contractor cannot accommodate a retainer then you should question their financial resources to undertake your project.

A101-2007 - Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum

This agreement is used when your bid proposals are in the form of a fixed priced bid.  This is probably the most common form of arrangement for home renovations here in the SF Bay Area for small to medium sized remodels and renovations.  Basically,  your contractor is providing a scope of work based off your plans for a fix sum of money.  Any changes arising from the owner or from the unforeseen will be handed in the form of a change order (handled by the AIA G700 series).  When negotiating a fixed price bid make sure that you have a complete understanding of what the level finishes are (usually presented in the form of an allowance) better yet if you’ve specified all finishes ahead of time you should have a much tighter handle on the project budget.

A101-2007 -  Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price

This agreement is used when you select a contractor that you really want to work with and construct a negotiated bid in the form of a cost plus the contractor’s fee capped by a maximum price.  This is also a common form of arrangement for home renovations here in the SF Bay Area for small to medium sized remodels and renovations.  Basically,  you’ve picked a contractor that you really want to do the work and they are providing a scope of work based off your plans for the cost of all material and labor plus a fee.  Here in the SF Bay Area, fees are typically 20% or higher.  I’ve seen bids at 15%, but very rarely.  Again changes arising from the owner or from the unforeseen will be handed in the form of a change order (handled by the AIA G700 series) but the amount will always be understood to be cost plus the contractor’s predetermined fee.  This arrangement provides the owner with flexibility when scope and details are unknown but at a price of having everything with a set markup.  The guaranteed maximum price is an overall cap that protects the owner from having the budget run amok.

There are other agreements in the 100 series that may pertain to you, for example if you are working with a design and build “firm”, but these are the most common.

To make sure you get what you’re expecting, I highly recommend the A201-2007.  This agreement stipulates a level of quality and performance you would expect from a professional handling your home remodel.  Remember - you should take nothing or granted and spell out as much as you can and review with your contractor before proceeding.

You can get copies of these documents from your local AIA chapter.  Modifying them will be somewhat tricky given that they are in hardcopy form.  The AIA also provides softcopy versions.  For more information you can visit AIA’s website.

A good place to start to drafting your contracts would be the Architects Institute of America (AIA).  The AIA offers excellent template contracts that you can use to protect the owner.  But beware about these contracts.  Just as they favorably position the homeowner they also elevate the authority of the architect.  If you are not working with an architect or are not comfortable with the architect taking on such elevated authority to mediate situations or perform contract administration of your home remodel, then you should reword the agreements to put “Owner” wherever “Architect” is mentioned where applicable.  Alternatively, if you have an architect and feel more comfortable hiring your architect to administer the contract and supervise your home remodel project, you can leave the terms as is - just be sure to understand what you’re delegating to your architect.

The level of your finishes will greatly affect your bottom line.  As an example - consider the cost of using brushed nickel for all your fixtures instead of chrome.  The brushed nickel model for all our plumbing fixtures that we picked easily added a 20-40% premium - the difference of $6K instead of $4K.

As the owner, you also have the ability to cut numbers from the bid by insisting on providing finishes and even raw material.  Don’t let a GC fool you by saying that they get much better pricing being a licensed GC.  Nowadays, anyone can get the same discounts as a GC by shopping around and negotiating, most especially online.  Procuring your own materials and finish goods not only gets you a better bottome line price but also has the added advantage of not being charged the GC’s markup.

To quickly assess the bid, go straight for the big numbers in each of the CSI categories like foundation, framing, rough-in systems, and finishes.  To understand the numbers it’s imperative to understand the assumptions the GC made in his or her interpretation of the plans.  You can quickly establish a baseline with several bids by taking each of the high level category numbers and comparing them.  In our case for example, plumbing came in around 20K on average from each of the GCs.  When the third GC came back with his bid of 30K, we quickly spotted to be out of the “norm” of the baseline and were able to question the assumptions in how he arrived at a higher figure.  After several minutes we quickly found that he had assumed that we would want tankless water heater and other upgraded fixtures as well.

You’ll be amazed on how many copies of your plans you’ll need to print up to give to your potential general contractors.  Each contractor will want at least one copy, it not more to give to their subcontractors to run the numbers game.  When soliciting your bids, it’s best to give your potential contractors some time to review the plans and then arrange for a meeting to discuss the plans.   The plans that your architect draws up will have high level details.  The structural plans drawn up by your engineer will have even more details outlining what types of materials and methods of construction that are going to be  needed.  Despite all this detail there is one crucial thing that is missing from all these plans - the finishes.  This is where the owner’s program comes in handy.  If you specify as much of the finishes as possible, then the contractor will have even more information and more importantly an understanding of your expectations for the things that really matter to you as a homeowner.  More homeowners care about the plumbing fixtures that are going to be installed in their home than whether or not TGIs or 2″ x 12″ are going to be used to construct your floor joists.

It took a good four months just to get back to the first revision of comments.  Every one of the comments need to be addressed by your architect by making adjustments or clarifications.  The irony of the matter is - it doesn’t really matter who’s right about the code.  You pretty much have to play the game of doing what the building department wants to see on your plans.  We had heard stories from our architect about a general contractor remodeling his own him in our city.  His plans did not encroach on a setback that was supposedly present on his property in the eyes of the plan engineer.  This argument went back and forth until the building department conceeded on the point after our architect had showed them the records to prove the setback didn’t exist.  BUT - the building department then levied fire sprinklers to be included on his project - a $10,000 increase in cost and complication.  The contractor fought them on this as well until he could not afford to waste any more time or money and just conceeded because it would have cost him more in the long run to keep his subs in limbo than on other client projects.

Every city or county is different in how they handle the construction permit process.  For us, because we were building a second story we automatically had to submit our plans to the planning department.  The planning department has wide jurisdiction over what is “not in the public interest or community’s general interest”.  Their opinion is only the first hurdle.  Our project required us to submit letters of notification to all our immediate neighbors within a 500 foot radius informing them of our plans.  A hearing was also later scheduled to let anyone who opposed our project voice their concerns to the city before rendering a decision on whether or not our project would move forward.  Although we hadn’t been on the best terms with all our neighbors or even knew some of the ones next to us - luckily we didn’t encounter any opposition.

It came as no surprise that were in the B zone.  And being in the B zone meant that it was mandatory to get a soils report for our property.

A soils engineer or “geotech” is yet another professional we had to hire and consult with to determine the what would be the proper foundation and associated drainage requirements necessary to support our new home.  The geotech performed the following during the early phases of our planning:

1. performed a floor level survey to establish a contour map of our the home - this identified settlement and any area where the foundation was sinking
2. drilled in 5 different areas with a portable rig to get a core sample of our soil - this also confirms how many feet of fill needed to be penetrated before hitting load bearing strata, i.e. “bedrock”
3. analyzed the core samples to write up a soils report describing the conditions of our lot
4. defined a set of requirements to describe the challenges that had to be overcome or taken into account by whatever foundation was engineered by the structural engineer

The above three items alone already costed us thousands of dollars, nearly $4K without even having broken any ground toward construction.  Hiring a geotech for us was also critical for us because we needed someone to address how to prevent further soils movement on our property that would affect the integrity of our foundation.