Hidden Costs of Home Remodeling

You’ve planned your home-improvement project responsibly by figuring out how much it will cost and putting money aside accordingly.

But whether the contractor tells you the price is going to exceed his original estimate or you find yourself buying more than you expected, hidden costs can leave you spending much more than you originally anticipated.

These hidden costs can come from a variety of places.

When you hire a contractor, that person gives you an estimate of how much it will cost to have a particular job done. But, “sometimes when a contractor begins doing a job, he finds out that there’s more work involved than he thought,” says Eugene Baldwin, a home-improvement specialist with home-contracting company Amerideck in Clinton, Md.

For example, a roofing contractor might start replacing shingles only to learn that some of the wood beneath the tile is completely decayed and needs to be replaced, as well.

Or a contractor may drill into a wall only to find something behind it that he wasn’t anticipating. “If you get into a job and you need another type of equipment and have to go out and rent it, it will cost the customer more, too,” says Baldwin.

Some hidden costs might not be so hidden if you understand the contract.

“The contract should include a description of the project and a list of what’s excluded from the price,” says Paul Winans, chairman of the board for the National Association of the Remodeling Industry. “It’s almost more important to know what’s excluded than what’s included,” he says.

Certain tools and building materials might be excluded, as well as the cost of the products you want to have installed in your home. If there’s a repair job in which a contractor is not sure of the extent of the damage, he might find that he needs to repair or replace a larger portion of the home than he originally thought.

Costly upgrades

Sometimes homeowners are directly responsible for unexpected costs. For example, halfway through the task of having your bathroom renovated, you might decide you want to upgrade your tile or choice of shower fixtures. Unless you choose your brands or products before the estimate is completed and stick with them, be aware that your choices will affect the total cost of the project.

Another factor that can cause the price to fluctuate is the cost of building supplies. If the job is one that will take a long period of time, or if you received your estimate several months before the actual work began, there’s a chance that the price of supplies used to complete the project will increase. If this happens, your bill may rise accordingly. If your contractor includes the cost of supplies in his estimate, ask him before you sign the contract whether those costs are subject to change.

Do-it-yourselfers aren’t immune to hidden costs. They, too, can find themselves paying more for a project than they originally anticipated.

One hidden cost that many homeowners don’t think about is permit fees. Depending on the type of work you’re doing on your home, you may be required to apply for a work permit. For example, a building permit is generally required from local building-inspection authorities for work that changes or adds to the structure of your property.

Other permits you may need, depending on the project, are for electrical, mechanical and plumbing work. Often, you must pay an application fee in addition to the cost of the permit. Permit costs are generally based on the estimated construction cost of the project.

Another place a DIYer might underestimate a project is when coming up with all of the supplies and tools needed. Unless the job is one that you’ve done before, chances are pretty likely that there is a piece of equipment you’ll forget to list or there is a tool that might make the job easier.