Tips to Skip the Sticker Shock by Michael Hall

Great article from the Journal of Light Construction discussing cost versus value and how much construction costs actually cost. If you are thinking of renovating or building, read this insider article.

http://www.remodeling.hw.net/benchmarks/cost-vs-value/tips-to-skip-the-sticker-shock-when-pitching-to-clients_o http://www.remodeling.hw.net/benchmarks/cost-vs-value/tips-to-skip-the-sticker-shock-when-pitching-to-clients_o

Tips to Skip the Sticker Shock When Pitching to Clients

Mark Maltry, co-owner of JEMM Construction, in Gainesville, Ohio, says that the current version of his company’s website is a work in progress. Even so, JEMM, founded in 2007 by Maltry and business partner Josh Edgell, prominently features Remodeling’s Cost vs. Value Report from 2014, which clients and prospects can easily reference. It’s one way of averting the sticker shock that can sometimes hit homeowners who are unfamiliar with renovation costs.

A Tool To Help You Sell

Cost vs. Value provides you and your customers with two things: The sense of what a project costs, and what its return on investment might be. And while homeowners have more access to project cost information today than they ever have—thanks to the Internet and websites such as Houzz.com—few will have a clear idea of price on a first meeting. (The exceptions are those clients you’ve previously worked with.)

“One company’s bathroom might be $10,000, and someone else is saying $30,000. [Homeowners] might have an expectation, until they sit down with the remodeler in their local area.” —Bob Lutz, operations manager of DBS Remodel, Poughkeepsie, N.Y.

For instance, most clients of Hammer Contractors, in Olney, Md., still begin with no firm idea of cost or, if they do think they know about what the project is going to cost, are often misinformed, according to director of sales Greg Buitrago Jr. “They might do a bathroom in the basement with Chuck in a Truck for $6,000 plus materials,” he says. “Now they want to talk to a company about remodeling a master bath that’s maybe three times the size, with different materials. The math doesn’t translate to the company or the scope of work.”

These days, the problem is just as likely due to too much information as it is to having too little. Between what’s online, home renovation programs on TV, and what they might pick up via local home shows, it’s easy for homeowners to get the wrong idea, notes Bob Lutz, operations manager of DBS Remodel, in Poughkeepsie, N.Y. “One company’s bathroom might be $10,000, and someone else is saying $30,000,” he points out. “[Homeowners] might have an expectation, until they sit down with the remodeler in their local area.” At that point, Lutz says, they can begin to get an idea of how, above and beyond cost, service levels play a role in the price of a renovation project—often a big role.

Price-Conditioning Help

On simple projects such as door or window replacement and siding or roofing jobs, the Cost vs. Value Report provides a cost that’s typically a little on the high side, not because the specifications are inaccurate but because discounting is rife in specialty contracting, which is more the province of one-truck operators. If a homeowner wants to know why your estimate for their (roofing/siding/window) job is so much higher than the estimates from low-ball competitors, direct your customer to Cost vs. Value and explain.

On midrange to upper-end projects of complexity, such as additions, whole-house remodels, and even kitchens, Cost vs. Value provides the homeowner with a ballpark figure. Not every contractor wants to go there, especially on jobs that are expensive and entirely custom. For remodelers such as Patty McDaniel, owner of Boardwalk Builders, in Rehoboth Beach, De., what past clients paid for similar projects in the same or adjacent neighborhoods, is the better reference point. It’s her company and her clients in the same locale, so those comparisons mean more.

Many homeowners, though, want some kind of idea that lets them know the project is at least affordable, so that they can begin to set a budget. If that idea comes from a third-party source produced by the National Association of Realtors and the renovation industry’s leading trade publication, so much the better. “They need some kind of ballpark,” says Michael Mroz, of Michael Robert Construction, in Westfield, N.J. “It’s a resource,” he says, “but more importantly, it’s a guideline.” So, in the case of the attic-to-bedroom conversion remodel, typically about $51,000 and change, for homeowners otherwise clueless, it’s “a base to build on,” Mroz says. “You know it’s not going to be $25,000, and it probably is not going to be $100,000.” If your prospect had no idea before, now he or she at least has a sense.

Establish Price Without Giving the Price

Many salespeople deflect the request for ballpark numbers when homeowners ask. The standard reasoning: Every job is a custom job because every building has its own unique set of conditions and (on kitchens/baths/additions) a universe of products to choose from. That argument is both obviously true and obviously self-serving.

What’s behind it, of course, is that salespeople are reluctant to address price before they’ve had the chance to show value. Value here doesn’t mean what the project adds to the market value of the home—often an afterthought—but rather, what the quality of the job is relative to what competitors could build it for. Those remodelers who are selling projects and elect to omit guidelines about ballpark pricing run the risk of arriving at a price so disconnected from homeowner expectations that the result is sticker shock.

For K & B Home Remodelers, sales manager and Remodeling columnist Mike Damora says that the most effective time to introduce the Cost vs. Value Report during the sales process is right before presenting the homeowner with the contract price—something he often does on a second visit, when he takes homeowners to the report on his iPad. The value, Damora says, is that you can use this to establish a price without giving homeowners the actual price of the job. And since Cost vs. Value provides a third-party reference by a known and accredited source, “nobody ever says a word,” he says, “because I’m not the one saying it.”

Remember, you’re dealing with both value and cost. Cost makes little or no sense until prospects understand the value that’s going to be delivered. In cases where multiple contractors are bidding on the same job, for instance, a company might low-ball the price by failing to include key costs. The Cost vs. Value price, prefaced by a scope of work that includes contractor overhead and profit, is going to give you the marked-up price, Damora says. In selling a roofing, siding, or window job, that eliminates the need to “come up with a fictitious way of lowering the price to create urgency. I’m showing them a price based not on what I say but on what the National Association of Realtors, plus other contractors, says.”

Value Added

Whether you’re selling a complex project or a simple re-roof, the sales visit eventually centers on asking the homeowner two questions: What is your budget (can you afford the project)? And, how long do you plan to stay in the house? To the first question, a ballpark number provided by Cost vs. Value can dissolve prospects’ fears that they’re about to pay too much.

“Ask about what their five-year plan or 10-year plan may be.” —Mark Maltry, co-owner of JEMM Construction, Gainesville, Ohio

The second question, about how long they intend to remain in the house, goes directly to the information in the report. “I ask about what their five-year plan or 10-year plan may be,” Maltry says. “If you’re not going to stay in the house for a while, maybe you’re not going to spend $40,000 on a bathroom. You may spend $25,000 or less. We’ve done $8,500 bathrooms and $70,000 bathrooms. It ranges.”Since, for many contractors, so many variables—such as the quality of the work, change order process, etc.—factor into the final cost of the job, the question of how long prospects plan to remain in the home becomes a way to help close (see “Where They’re At,” this page). Tim Shigley, owner of Shigley Construction Co., in Wichita, Kan., points out that “in 27 years, I’ve never done the same bathroom twice.” That said, he asks prospects to tell him what their long-term plans are for the house. If homeowners are moving within two or three years, they need to be aware that an updated kitchen or master suite helps sell a property that’s on the market. “If those things are looking swell, people who come looking are going to stick around and maybe become a buyer,” Shigley says.

Shopping With An Architect by Michael Hall

An article with Builder Magazine and Residential Architect. We went shopping with Nigel F. Maynard from RA to discuss what is good to buy and what is not at your local big box store.

Miles of Aisles

Hopefully this may give you some insight to what architects - and Studio CrowleyHall in particular - look for in materials, and pit falls to avoid.

Pervious Concrete by Michael Hall

A great material that is easily available through most local concrete suppliers, porous concrete is a wonderful option to control rain water run off. Good for trees and the watershed, for not much - if any - more money, this is a material that is becoming more popular for municipalities and projects where rain water run off is an issue.

Here is a video demonstration of this type of material at work - very cool.

Aesthetically attractive and appropriate for most low volume traffic and pedestrian uses, it is a great option to have in your design arsenal.  Pervious asphalt and various


7 Ideas for Decorative Longevity by Studio CrowleyHall

  1. Use neutral, warm colors on most walls. Let these be the background for your more decorative items, such as art, fabrics, or an accent wall. Personal favorites in the beige-gray family include HC-83 'grant beige' with accent color HC-86 'kingsport gray'; in the bluish-gray family, try HC-171 'wickham gray' with accent color HC-165 'boothbay gray' (all part of the Historical Color collection in the Benjamin Moore "Classic Colors" line).

  2. Use the same color for trim and walls. Rather than calling attention to baseboard or window trim, create cleaner lines and a greater sense of space by using the same color on each surface. On walls, a matte or (washable) flat will provide the softest-looking finish and hide the most flaws. On trim, provide a little sparkle with a semi-gloss that matches the wall color. For interior doors, select a semi-gloss color one or two shades deeper for a bit more overall depth to the room. 

  3. Select furniture with clean lines in neutral, warm colors. Similar to #1 above, pick simple pieces that can stand the test of time, but may be dressed up with decorative pieces that are easily changed. Whether you lean more traditional, such as West Elm's upholstered Chester sofa, or more modern, such as Room & Board's Hayes sofa, pick something comfortable, then dress it up with some cool throw pillows or a pretty blanket. (Sometimes when I need a change, I create a new look by mixing up pillows from various pieces I already have.)

  4. Take into account how you'll use a space and make sure the furniture fits. As enticing as a huge sectional may be, make sure it's what you need. For a media room used mainly for watching TV, a sectional might be just the ticket—one streamlined piece that accommodates everyone in the family. For a more formal living room where you entertain friends, you might consider a sofa and a couple club chairs. Ottomans and cubes are also great options, especially for small spaces where furniture can do double duty as an extra chair or table. 

  5. Whatever the configuration, be sure to select pieces that fit the scale of the room. For smaller spaces, consider furniture with low arms and visible legs—they feel less solid and create a feeling of more space. Also consider a loveseat, rather than a sofa—it's not often that more than 2 people will use it at a time anyway. A sectional can work nicely, as long it's configured specifically to work with the flow in your room—just keep in mind they're less flexible if you ever want to rearrange your room or use elsewhere. 

  6. Create a variety of lighting levels. This creates visual interest and ensures you have the light where you need it. Ambient lighting, such as recessed ceiling cans, provides overall light so you can see your way around a room. Task lighting, such as a table lamp, provides brighter light where it's needed to complete a task. Accent lighting, such as spotlights on tracks, highlights art or objects which require special attention. Switch up your look from time to time with new lamp shades or adjusting accent lighting to highlight a different art wall. Whenever possible, put all switches on dimmers so you can control the amount of light and further affect the look in the room. 

  7. Don't be afraid to throw in a few surprises! With a neutral background palette, you can afford to paint one wall your favorite purple color or use that sequined pillow you found on your travels. All the simple lines and muted colors are now in place, so reflect your unique style with a few things you really love!

The Client's Role for a Successful Residential Project by Michael Hall

A helpful video with balanced information regarding the Client's role in the construction process. If you are wondering what it is like to work with an Architect, and what you can get out of it - this is worth a look!

(Brought to us via CRAN (Custom Residential Architects Network), a Knowledge Community of the American Institute of Architects.)