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Saturday, July 23, 2011
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14 comments:
RE: Basement Finishing
I received 3 estimates to finish off my basement this week: 27k, 33k and 39k - all contractors come with good recommendations. The basement is already partially finished, but this project would add: a laundry room, bedroom (already has egress) and full bath.
The estimates (as always) came in higher than I thought.
The basement is only 550 square feet - these estimates range from $71 to $49 a square foot, and does not include plumbing fixtures or tile in some cases.
Anyone have input as to whether these are reasonable quotes or am I getting the N. Arlington markup?
Anyone have input as to whether these are reasonable quotes or am I getting the N. Arlington markup?
From my limited experience with the DC Metro area, the quotes at slightly high.
If you are open to alternative approaches here is what I would do based on my own experience as a contractor:
Reverse the process. Instead of asking for bids, break down each part of the process in major components and come up with a price you think is within your budget. Then, contact the original bidders and offer a RFP (Request for Proposal) against these prices.
Basically, you are making this a sealed bid. If you aren't comfortable or familiar with this process you might seek support in some of the online contractor forums, but basically you are asking them to bid against a fixed price and lowest bidder wins.
It may or may not work, but in highly competitive times, such as this one when contractors are hunting work, you might be able to drive down the cost 10% to 30% more.
Be flexible too. Can you paint the walls yourself? Can you break the job in smaller segments? Are you willing to use different materials? (i.e. clearance tile, contractor paint, less than customized finishes, etc...)
I would never grant a contract based on only three bids. Typically I used 10 or more and more than one round of interviews. Don't be afraid to ask for detailed quotes, including markup and profit.
It's your money, you make the rules.
I used to use a detailed quote form and if I spotted a large price that wasn't broken down as far as possible I asked for detail.
Thanks, Texas Native.
I'm not very handy - I can paint, but I know how time consuming it is to do a good job, so I'd rather not.
I don't think we're going to get 10 quotes, but we are going to get more. I'm definitely going to leverage each bid I get, and try to see how far I can get them down in price. I would like to pay under $25k for this project.
Jewel, this may not help you, but here's my X cents.
My neighbor, who put on a permitted addition to his house and did other work himself, said finishing his basement was a royal pain, because there is so much retrofitting and other (time consuming) complexities involved in old Arl. houses. Before he did his, he could never understand why contractors gave such high estimates to do them, but later he did. He said it would be much easier and cheaper for builders to finish the basements in new houses for much less cost, which is why that's often used as a bargaining chip.
During the bubble years (when contractors were charging more, obviously) I got an estimate for a similar sized area (to yours) in a partially finished basement, from a guy who came highly recommended by another neighbor who is extremely careful with money. I think the contractor wanted $50K+, but he would also have added a kitchenette in addition to the work you described.
A second, highly recommended contractor gave me a general, eye-ball bid of "around" $18K without the kitchenette, but said he'd have to go back to the office and lay it out in detail and check with subcontractors. He came back with an estimate about twice that and said he had been shocked at what the subcontractors were charging and that was why the bid was so much higher.
I decided not to do the project because I didn't think even the lower bid would have added that much value to the house. I don't know what today's bids would look like.
IMHO, it often is not a good idea to go with the cheapest contractor willing to do the job, unless you spend so much time detailing every bit of the material and labor that you are certain your bids are apples-to-apples. To do the job the right way likely will take more time and $, so the cheapest will cut corners or you will have to spend so much time supervising/ correcting them that you would have been better off to go with someone else. I'm sure you've seen Holmes on Homes or similar HGTV type shows, showing how even careful homeowners who worked with allegedly reputable contractors sometimes get burned, sometimes because they tried to get the job done cheaply. At the same time, paying more is no guarantee that you are getting higher quality.
Looks like C-S is up again in DC, 184.9 from 180.5. Interestingly, last month's new data said that our index level was 186.76. Now it's 180.5? These revisions are pretty significant considering that they happen every single month.
Kevin-
I agree I don't know what to make of the current moves. Every month they report that the gains are large, but the previous months gains were actually close to 0 rather than the 1-2% they said earlier.
Although after the revisions are done it looks like the market is staying relatively flat. The YoY numbers so far this year are between 0.5% and 2.3%.
I also continue to find it odd that the total index at 184.9 is higher than the three tiered indexes, which are at (168.8, 182.4, and 184.2) for low,mid, and high tiers.
As of now I think it is hard for either the bulls or bears to be happy with the numbers. It really does look like the long slow flat crowd is winning out so far.
From S&P...
“May’s report showed unusually large revisions across some of the MSAs. In particular, Detroit, New
York, Tampa and Washington DC all saw above normal revisions. Our sales pairs data indicate that these markets reported a lot more sales from prior months, which caused the revisions."
http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1245315652608&blobheadervalue3=abinary%3B+charset%3DUTF-8&blobnocache=true
1.3% Year on year, 2.4% MTM
must be PG holding down the area plus the exurbs
"HB said...As of now I think it is hard for either the bulls or bears to be happy with the numbers. It really does look like the long slow flat crowd is winning out so far."
Sounds about right. The monthly nutkicking the "165 was nowhere near the bottom" crowd received wasnt nearly as big as it normally is. Same for the minority who believe we should be at 210 by now.
The good news for me I guess is that my "170-190 range" prediction, (which is set to expire June 2011), is suddenly looking much better. Last month I thought we would bust it to the upside in the last 2 months of its existence. Now it looks like im pretty safe.
I thought "bounce along the bottom" for a number of years ala 90's. I never thought that 165 was anything but an over-correction. While I'm not foolish enough to completely rule out a dip of 5-10%, it's looking increasingly unlikely. I'd say "bouncing along the bottom" is now CS 180+. Above that is great.
Contrarian:
Congress is going to eliminate the mortgage interest tax deduction, which I have been saying would happen for five years.
God-willing that will happen, but I wouldn't count on it. At best you'll see it phased out over a long period of time.
The mortgage deduction is becoming relevant to a smaller and smaller segment of the population. On the lower end, the standard deduction often exceeds itemized. The upper end has to deal with AMT. And AMT is increasingly affecting the middle class.
Please correct me if AMT doesn't factor in for mortgage interest for mid-upper income. I don't do our taxes.
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