Getting Ready to Renovate

It’s almost spring and the heat of the summer renovation season is fast approaching. The Toronto housing market is performing better than ever and people are able to turn “fixer-uppers” into dream homes and come out on top. When thinking about renovating there is a lot to consider: budget, design and build, are the most obvious. But there are many other things to take into account, where will you live during the build? Is content protection included in the price? Do you have the financial capacity to deal with unforeseen issues? Getting ready to renovate is all about planning, making a list and checking it twice!

To renovate or not to renovate, much thought must go into this decision. It is helpful to make a list of requirements and goals. What would make your daily life more productive and enjoyable? Make a list of “must have” and “nice to have” items for your home. This will empower you to make realistic plans that suit your lifestyle. Remember when you were in grade school and learned how to do that brainstorming diagram? This is when that skill comes in handy. It may seem simple, but planning is an important way to stay focused on goals and allow you to achieve your dream home without veering too far off course.

Determine your look. Collect some photos depicting images of how you envision your home. Check out magazines, make a Pinterest board and browse Houzz. This will not only help you figure out how you want your home to look, but it will also help you determine the size of the project. Having a strong vision with photos to support it will help those you hire understand what you are trying to build in order to create a home you love.

Once you’ve decided on your look and goals, next is to determine budget. How much do you want to spend? How much can you spend? There are many ways to find answers to these questions: research the cost of renovating in Toronto, speak with a real-estate agent, consult a financial advisor or enlist a builder to prepare a proposal. Seeking professional advice can help provide insight on budget and offer answers not considered. Two items in particular that might get over looked are taxes and contingency plans. It is recommended that you have a 20% contingency plan for unforeseen situations to help from over extending your budget before the project is finished.

Okay, now you’re all in. You know what you want to do, how much you can spend and have a contingency plan in case something unforeseen happens. You’re starting to look for a builder and BAM it hits you, where are we going to live while our house is under construction? And just like that, we’re back to budget. Renting a place or living with your family while under construction is an option, probably the easiest option, but that’s not always possible. Before deciding to live in, take into consideration the disruption, will there be working electricity and water? How many people will be in and out of the house daily? If the disruption is low, perhaps living in is a great cost saving option. Otherwise, if you can swing it, clearing the decks for uninterrupted scheduling and building might accelerate the process.

Your dream home is fully realized and now you need to find a builder. One of the easiest and most reliable ways of finding someone is to ask friends and family who they use, or who they know in the industry. Working from a referral can be very beneficial as the person has already been tried and tested. That said, finding someone new with whom you’ve vetted personally can also be beneficial as the relationship is fresh and unbiased. When you start to speak with builders you may meet the first one and think you’ve found your match, but rule of thumb is meet with three. When you’re discussing your project, stay consistent with the project plan and expectations so you can do an apples to apples comparison.

Once proposals are in, go through each and look for specifics: where is the work being completed, what materials will be used, who are the specialists coming into the project, etc. Ask to see an active site, this will give you an idea of how the builder works. Is the site clean? Is there a safety board in place? Are there proper permit placards on display? Once you’ve narrowed down your builder be sure to gather and check references. Choose a builder based on their track record and your rapport with them. Keep this in mind, personality matches can be indicative to successful relationships.

You’ve selected a builder! Although this is a very exciting time, don’t rush into starting a build. Make sure everything is included in the proposal, do a walk through with the builder, proposal and scope to avoid surprises along the way. To help the project stay on track and budget, make finish decisions, plan for appliances, deliveries and decide on material specifications prior to starting. Most importantly, have fun! Remember, this is a creative process where you get to realize the dream home you’ve been planning since you were a kid laying in the grass finding shapes in the clouds.    

Bid Versus Management

There are generally two ways builders provide their services; a fixed bid contract including all labour and material or, a construction management contract that is essentially a time and material (pay-as-you-go) agreement. The end result is often very similar but each process has many distinct differences.

With fixed bid, an estimate for a specific scope of work is provided prior to starting. The builder has complete control over how and when the work is executed. They supply their own crews, materials, and equipment in a manner that expedites labour time and minimizes material costs. The mechanics of the project are a closed book and owners generally have no input into who is hired or what materials are used to complete the work in their home.

In theory, a fixed bid should allow an owner to accurately budget a project and make decisions accordingly. In practice, renovations in older Toronto homes rarely go exactly to plan and unforeseen circumstances often increase the scope of work. Since the estimate is limited, any work outside of the contract is likely to generate change orders and add cost to the original bid. Furthermore, if the builder hasn’t accurately priced the work, change orders can significantly increase the cost of the project. This can become a source of tension because owners rarely understand how change order costs are calculated. Unforeseen circumstances are part of the renovation process and, if handled incorrectly, can complicate an already stressful situation and foster an environment of conflict rather than collaboration.

Construction management (CM), which is frequently used in large, commercial and industrial projects, has been gaining popularity in residential renovations. CM contracts generally consist of two parts: 1) a management fee based on the projected time required to manage all aspects of the project, and 2) a detailed scope of work and schedule that allocates and tracks expenses for every part of the project. The process is designed to be transparent and flexible. Fees, labour costs, materials, sub-trade agreements are disclosed, and labour is performed at pre-determined rates. Owners can participate in hiring crews, sub-trades, and may select and pay directly for materials used during construction.

CM minimizes the effects of unforeseen circumstances that can occur when working in older Toronto homes by, maintaining communication and collaborating with owner’s in the decision making process. Since the scope of work is designed to be a flexible plan based on time and material, if unforeseen circumstances arise, the impact to the project schedule and cost is often minimized due to the fluid rather than fixed nature of the agreement. Moreover, the CM system keeps project details readily available, promoting good relationships between the owner, builder and site work professionals throughout the renovation.

Renovations are costly and can be very stressful. There are endless choices in material finishes, construction techniques and design possibilities. Administrative and legislative requirements constantly change and can greatly impact a renovation. Finding the right fit with a builder is an essential part of the renovation process, and knowing all of your options will help determine what type of contract will work best for you.