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Selling Bathroom Remodels? Talk to Homeowners About These 3 Important Aspects

Posted by Shawn McCadden on Sat, Feb 07,2015 @ 11:51 AM

Selling Bathroom Remodels? Talk to Homeowners About These 3 Important Aspects

Selling bathroom remodelingBathroom renovations make homes more modern, but the return on this investment is lower compared to other home remodeling projects. The average amount recouped from a mid-range bathroom project (those costing around $16,000) upon selling is 70 percent of total costs, according to Remodeling magazine. Kitchen remodeling projects recoup about 80 percent of costs, as do siding and windows replacements.

Contractors can do themselves and their clients a favor by helping them decide on the particulars of their projects to maximize ROI and aesthetic value. Homeowners are more likely to close deals with contractors looking out for their best interests versus one simply looking to make a profit.

 

The Money Conversation

Selling bath remodelsMost homeowners already have a budget in mind for their bathroom renovation. This is where a contractor's expertise can win the trust of prospective clients.

The National Kitchen and Bathroom Association recommends bathroom renovations cost between 5 and 10 percent of the home's total value. The bill not only includes materials and labor, but back-end expenses like supplies, legal services and secretaries. Thus, homeowners should feel comfortable and confident paying $25,000 for a bathroom remodel in a $250,000 home.

If another contractor is offering to do the same job for far less, emphasize to the prospective clients that they will ultimately get what they pay for. When contractors lower final costs simply to close deals, they are cutting costs elsewhere to make up the difference. Always provide detailed, itemized estimates, so prospects can compare your market-value offer to bargain-basement options.

 

No Rearranging

Some ambitious homeowners may envision moving the toilet where the tub once was and adding a second sink for a his-and-hers effect. But unless they have an unlimited budget, it's not a good idea.

Janice Costa of Kitchen & Bath Design News told HGTV that the quickest way to make final costs skyrocket is relocating the plumbing. A new sink in a different location means a new hot water pipe must be added. A new toilet waste pipe can add upward of $1,500 or more to the final bill. Moving the vent stack—which regulates air pressure in the drainage system for multiple-story homes—could add up to $10,000 to the final bill. Keep the existing plumbing to keep costs down.

 

Choosing Materials

Since most bathroom remodeling projects require ripping into the floor, new tile is inevitably going to be part of the job. Safety-conscious homeowners—particularly those with elderly family members—will want flooring that looks good and mitigates injury risk.

The Centers for Disease Control and Prevention estimates there are 85,000 bathroom slips and falls resulting in hospitalization every year. Tiles with textured surfaces and matte finishes are best to prevent these types of injuries. Smaller tiles with more grout lines are also recommended.

how to sell bathroom renovationsA common theme for master bathrooms these days is removing the tub altogether in favor of a spa. Of course, there are caveats when it comes to installing an indoor hot tub—for starters, they are large and difficult to get indoors, and many must be installed on a ground floor due to their weight. In addition, there could be problems with humidity levels when the spa cover is removed and floor damage if the unit leaks, according to Hot Tub Works.

When choosing faucets and fixtures, the quality comes down to the material they're made of. Brass is the most expensive but also the most durable, particularly in homes with hard water. Zinc-alloy faucets will corrode eventually and need replacing. Chrome-plated faucets are durable but require a lot of maintenance to maintain their shine. Avoid faucets with plastic cores altogether.

Homeowners know contractors need to make a profit. But the more information you give them upfront, the more they'll entrust you to do the job.

 

Brian WilkinsGuest Blogger: Brian Wilkins is an Arizona State University journalism grad who has worked as a radio broadcaster and banking industry professional. He is an independent journalist, blogger and small business owner who loves life. He lives off-the-grid and has not owned a TV in more than six years.

 

Topics: Managing Allowances, Sales Considerations, Guest Blogs, Plans and Specifications, Design Options

How Contractors Can Manage Allowances To Protect Profits

Posted by Shawn McCadden on Thu, Sep 12,2013 @ 06:00 AM

 

How Contractors Can Manage Allowances To Protect Profits

 

Does this sound familiar?

Problems managing construction allowances

 

During the design of the project the clients insisted that a $5.00 per square foot allowance for  an “in-stock” kitchen backsplash tile was plenty. During construction they picked out a handmade tile from Spain that sells for $22.00 per foot, takes 5 weeks to get and requires significantly more labor to install than you assumed for the self-spacing stock tiles. The project will be ready for the tile work next week; however the clients finally selected and ordered the above mentioned Spanish tile late last week. The clients insist it won’t be a big deal. “You can keep the project moving.  Finish everything except the tile then return when the tile comes in.”

 

Déjà vu, again?

If the story above sounds familiar, you probably also know the gross profit, scheduling and customer satisfaction implications such a scenario can have on your business. While this provides justification for your mark-up on the direct costs of a project, is it even worth trying to explain all this to your clients? Rather than risk such a conversation, many contractors will simply charge for the difference, eat the mark-up, pay the extra labor cost to the tile sub and hope it never happens again. Surprise, the same problems surface when the clients select the floor coverings!

Problems related to allowances will never go away completely. However, you can implement several strategies to manage their impact and protect your mark-up/margin requirements.

 

Being proactive is the key

Managing construction allowances to protect profitsProjects are most profitable and clients are happiest when everything happens as originally planned. Any changes to that plan can cause frustration for either party and may reduce your ability to get referrals if the client sees the changes as your fault. Before allowances throw a monkey wrench into your schedule, help prospects discover what will happen if selections are not made on time, or they choose products that will not be available when needed to keep the project moving as planned. Make sure you do this and mutually agree on things before you allow them to become clients!

 

Examples of proactive discussion topics:

  •  If you are remodeling their kitchen or perhaps the only bathroom in the house, will it be a problem if the project is not completed when originally agreed?
  • Are they willing accept and to pay for the additional costs related to pulling out of the project and then trying to return later?
  • If you do have to leave, how would they feel if you have to finish someone else's project before you return to complete their project?
  • Please feel free to add your own in the comments section below

 

Just talking about these considerations is not enough.

Manage Allowances To Protect Profits

 

After having proactive conversation with your prospects document their responsibilities in your agreement and what will or will not happen if they do not follow through.  Without clear consequences, and understanding the impact of those consequences, prospects become customers who assume they are always right!




Looking for more help with estimating and managing allowances? 

Check out the workshop titled: "Estimating, Pricing and Producing Successful Projects". 

Estimating seminar for contractors

The workshop is being offered several times at different locations between now and the end of the year.  Its also approved for 6 MA CSL Continuing Education Credits if you need to renew your MA Construction Supervisor License.

 



Topics: Managing Allowances, Success Strategies, Customer Relations, Keeping More Money, Plans and Specifications