If you have ever hired the wrong contractor or jumped into a remodeling project without a clear sense of what to do, you are not alone.

Ask anyone who has remodeled and they will admit making a few mistakes. Now is a good time to review some common mistakes people make when they remodel. Perhaps we all can learn from the experience of others.

Hiring the wrong contractor.

This is by far the biggest mistake people make when remodeling. In many cases, this involves contractors who:

• overcharge
• do not complete the work
• provide shoddy work or
• simply vanish in the night

Some consumers, however, hire perfectly able contractors, but they hire them to do work for which they are not well trained. Or, they do not clearly communicate their expectations.

When hiring a contractor:

• check references
• investigate their work style and history
• beware of someone who just happens to be in the neighborhood that day looking for work
• look for someone who specializes in the type of project you are doing

Mistakes with financing.

Remodeling can be an expensive endeavor, yet many consumers plunge into it without fully understanding what it will cost and how they will pay for it. Make sure the contractor provides a detailed estimate that spells out what is and is not included in the cost.

Also:

• Any loan should be approved before the contractor starts work
• Add a 10 to 15 percent contingency to cover unexpected expenses
• If you are paying for the work from savings or monthly cash flow, plan out the payments to make sure you have funds for other living expenses.
• Establish a system for keeping track of the planned and unexpected expenses

Allowing someone to work without a contract.

While a friendly handshake used to mean business, it is not good business practice today. Allowing someone to work on your home without a contract exposes you to tremendous liability. It also provides no protection if you have to pursue legal action later or if there are questions about the types of materials used or the extent of the work.

If a contractor wants you to proceed without a contract, ask him why he is reluctant to spell out the scope of the work and the cost on paper. Remember, the contract also protects the contractor.

Not checking a contractor’s insurance coverage.

If a contractor says he has insurance coverage for himself and any workers, he should be happy to show you documentation from the insurance company. Don’t expose your home owner’s policy to claims related to someone else’s business practices.

Not taking out permits and licenses.

While regulations vary by municipality, most require permits for a wide variety of remodeling work. Some towns require a contractor to be licensed. Also, the work may require a zoning variation.

Some contractors like to avoid permits because it creates an extra layer of bureaucracy. The extra layer, however, protects you against unsafe repairs and provides peace of mind about the quality of work.

Overimproving.

It’s easy to get carried away when remodeling, particularly if you plan to live in the house for many years. It is always best, however, to avoid putting more into your house than what the local real estate market will bear. You may encounter unforeseen medical expenses or a drastic change in your employment that force you to sell. Then you’ll wish you hadn’t added that third bathroom with the steam shower and marble floors.

Not getting lien waivers.

Anyone who works on your house should provide you with a lien waiver that waives their claim to future payments for the project. Typically a general contractor will provide waivers for all the workers and for the businesses that supplied materials for the job. You don’t want to pay the final remodeling bill, yet leave yourself liable for payments to a subcontractor or a lumber yard.