10 Major Construction Mistakes

Unless you can afford to pay for your renovation out of pocket, chances are you're going to need financing, and it's a good idea to see what you can afford to borrow before you meet with an architect or contractor. You don't want to pay your architect for revised plans, and knowing what you can and can't afford can help you streamline that process and save you hundreds or even thousands of dollars by getting it right the first time.

It's harder to get a loan now than it was before the housing bubble burst, but there are still home renovation loans out there. The most common renovation loans that banks offer are:

Once you settle on the type of loan that works for you, you can work with the bank to find out how much you can borrow. Even if you don't completely finalize loan details before you start shopping around for an architect and a contractor, working with the bank first can help you set your expectations for the project, so you don't end up planning something you can't afford.

There's no need to feel uncomfortable about getting several estimates. Contractors are used to working with homeowners during the "research phase" of construction. You can be completely open about where you are in the process when you meet with them. Some contractors will even offer to price match if the work they're doing is in a competitive building market like roofing.

When our house needed a new roof, we got a recommendation from the same company that did our first major home renovation. The roofer they recommended came by and gave us an estimate for the work, and we were very close to using this company when we decided to get a few more estimates, just for kicks.

It turned out that the first estimate was more than double what any of the others were!

We ended up going with someone who fell in the mid-range for pricing, and the work was great. I'm sure that first contractor would have done a good job, but we would've paid much more than the average price for our new roof.

What's important when you're gathering estimates from contractors is that you focus not just on price but consider a company's reputation, how long they've been in business, and what kind of warranty they offer on their work. You can check out resources like Angie's List and Yelp to see what other people in your area thought of the contractors you're considering.

Using contractors that aren't bonded and insured puts you at risk if anything goes wrong with the job and in case the contractor doesn't fulfill his end of the bargain. Depending on where you live and what sort of work you're doing, you may need to make sure your contractor is licensed, too [source: Angie's List].

Bonding and insurance are two different things, but ideally you want a contractor who has both. Think of bonding as protection once the job is complete and insurance as protection while the work is going on [source: Angie's List]. When you choose a bonded contractor, you're protecting yourself in case he fails to pay subcontractors or just plain does a terrible job. If your contractor isn't bonded and flakes on something like this, you're the one who foots the bill. The contractor's insurance covers you for on-site problems, like an injured worker who otherwise might sue you for medical costs or damaged property that you'd have to replace out of your own pocket.

A good contractor will also be willing to work with you to stay within your budget by going over the proposal to see where you can cut back. One way that my family has saved money on construction projects in the past is by sourcing some of the materials ourselves, like light fixtures and bathroom cabinets, and even doing some of the smaller tasks, like hanging ceiling fans and installing doorknobs and bathroom hardware. Watch out when you're taking on parts of a construction project, though – you don't want to end up in over your head (which brings us to our next mistake)!

There are definitely parts of renovations that homeowners can do without the help of a contractor, and doing some things yourself can help get the total cost of your project down. However, when you're planning to do things yourself, just make sure you have a very clear idea of what's involved before you take it on.

When my husband and I renovated our house in 2011, we installed all of the doorknobs ourselves to save a few hundred dollars in labor. It was simple to do; took us maybe an hour, and we saved a bundle. We also decided that we'd paint the interior of our new addition ourselves, though, and this turned out to be a bit of a mistake. When we said we'd paint, we were thinking about other rooms we'd painted – get some rollers and drop cloths, paint the walls, and presto! What we didn't realize was that on a new addition, there is more to paint than just the walls. There are windows and baseboards. There are doors. And there is the ceiling. A year later, we still hadn't gotten around to painting some of the trim, and we ended up paying someone to paint the ceiling, because our high ceilings were just too much for us to handle.

Doing it yourself is great; just make sure you know what you're getting yourself into before you take on construction tasks. You don't want to end up like me, staring at unpainted wood and kicking yourself!

If you don't have the proper permits, there's a good chance that the city or county will slap you with a stop work order, which will only delay your project. Permits take time to pull and they cost money, so make sure you get the permits as soon as possible before construction begins to avoid costly delays in the project or even fines. Your homeowners insurance won't cover unpermitted work if something happens [source: HGTV].

This is an area where communicating with your contractor is really important. Some contractors take care of pulling permits for you, and if this is an option, I'd highly recommend it. Dealing with local government can be a headache, and contractors usually have contacts in the permitting office that make it much easier and faster for them, since they pull permits all the time.

If your contractor isn't responsible for pulling those permits, you'll want to get a jump on this as soon as possible, because you'll inevitably be missing paperwork the first time around, and there's usually a waiting period between when you submit everything and when the city or county issues your building permits. Once you have your permits, find out if you need to post them publicly. Most cities require that you have permits and plans available on-site, so that their inspectors can check in on the work.

You might feel like a nag if you bring up every concern you have during a construction project, but a good contractor will take your questions seriously. You just might catch an expensive mistake! Say you're renovating your kitchen, but when the new countertops arrive, they're not quite the color you were expecting. It's much faster and less costly to swap them out when they first arrive on-site. Once they're installed, you're looking at added labor costs to make the switch, rather than just the waiting period while you or your contractor exchanges it for the product you were expecting. The worst case scenario? You ask about something, and it turns out that everything is fine.

That means you'll need to check in on the work periodically. If you're not living in your home while the construction is going on, it's a good idea to drop in daily, or at least every few days, to see how things are going. If you can't monitor the work but have a little wiggle room in your budget, you might consider a residential designer, who basically acts as your advocate on site and can bring any potential concerns to your attention [source: Kirkwood].

There's a reason that the Money Pit scenario is such a home construction cliché. It's all too common for contractors to push that completion date back over and over. There are definitely some scenarios where pushing back the completion date makes sense. If a snowstorm shuts down the whole city on the same day you're supposed to break ground or a severe thunderstorm damages some of the work that they just completed, it's really out of your contractor's hands. Acts of God aside, though, there aren't many good reasons that a home construction project should take months or even weeks longer than predicted.

Financial incentives for on-time completion should help. The contractors who built our home addition gave a firm completion date as part of our contract, and for each day that they were working beyond that finish date, they had to pay us a fixed amount. During the particularly stressful and dusty parts of construction, we could keep our eyes on the prize, because we knew they had to finish by that set date. There's nothing like a financial incentive to get a home renovation project moving efficiently!

Not all contractors will guarantee a completion date, but if you can find one who will, you can save yourself a lot of headaches. A solid contractor will give himself plenty of padding for that date to account for the unexpected, and knowing when the work will absolutely be done is great for your peace of mind.

Misunderstandings between you and your architect or contractor can cost you money or leave you unhappy with parts of the project. This is another area where you might start feeling like you're over-doing it with the questions and clarifications, but your architect and contractor aren't mind readers. If there's something you don't understand on the plans or in your contract, it's always better to have someone explain it up front. As with nagging doubts during the construction process, you're better off clarifying any questions you may have before work gets started, so there won't be confusion once you break ground.

Most homeowners can't be on-site all day during a renovation, so you want to make sure the contractors have a clear idea of what you want and how they can reach you if questions do come up. If they can't get hold of you to clarify a paint color choice, for example, they may end up making the wrong call. You'll have to either pay to fix the problem or live with a color that you aren't so thrilled about. It's not the end of the world, but when you're paying for a home renovation, you want the end product to be just what you envisioned.

If you check your email frequently, it's probably the best way to communicate with your contractors. Not only can they send you questions without disrupting your day, but you'll have your correspondence in writing in case something goes wrong. Make sure your contractor also has your cell or work number, so he can reach you quickly with timely questions. Not only will that help avoid confusion and mistakes, but quick communication helps keep your project on schedule, because no one will be waiting around for your responses.

We've all seen the home improvement shows where a contractor or homeowner pulls up ugly carpeting to reveal gorgeous, vintage hardwood floors. Unfortunately, not all construction surprises are pleasant ones, and there's always the chance that you'll discover a problem once the project takes off. If you're renovating an older home, remember that building codes may have been a lot looser and even non-existent when it was built, so who knows what's behind that wall or under your floor? When you're dealing with newer construction, you never know what corners the previous owner may have cut.

Your contractors could knock down a wall to open up your kitchen and discover costly termite damage, or as they break ground for your home addition, they could discover bad soil on your property that needs to be shored up before they can pour the foundation.

Preparing for unforeseen hiccups in the construction process can save you a lot of time and stress, and it can even mean the difference between completing your home improvement or running out of money. Most contractors will build a 10 percent reserve for unforeseen problems into their estimate, and you'll need to make sure you either have the cash on hand or enough financing to cover the project costs plus that reserve amount. Of course, there's a great chance your construction project will go off without a hitch, and in that case you get that 10 percent back when the renovation is complete.

Before you sign a thing or hammer a single nail, do some research to check out your potential return on investment. If you're adding bedrooms or bathrooms, for example, this can boost your home's resale value, but by how much?

If you can, find a realtor that you trust, and look at "comps" in your neighborhood. Comps are homes near yours that have the same stats as yours, like the number of bedrooms and bathrooms. Checking out some comps can give you an idea of whether you're sinking more money into your renovation than you'll get back when you eventually sell the house.

Whether you're adding a bathroom, remodeling the kitchen, or replacing carpet with hardwoods, a realtor is your best friend when it comes to sussing out the value of your renovation. He has access to databases of home sales in your area and can tell you what a 2 bedroom/1 bathroom home with an outdated kitchen tends to sell for in your area versus one with an updated kitchen. If homes in your area with wall to wall carpeting are selling for the same prices as similar-sized ones with hardwood floors throughout, you need to decide if you're willing to take the hit to make your house look the way you want.