Proceed with caution when selecting a contractor

Improving your home is a sound investment if done wisely.  These days, it’s difficult to differentiate the Service to Value Ratio (SVR) of remodeling contractors.  So we must be cautious.  SVR is measured by the following formula:

cost of goods and services
-------------------------------      =     value of improvements
     risk of relationship

The cost of goods and services is reliant on a thorough and accurate estimate.  Consumers should check with a contractor’s references to verify the historical accuracy of initial budgeting or estimating.  If you receive a consistent message, factor accordingly for your financial planning.

Risk of relationship is a function of the contractor’s financial solvency and their commitment to customer advocacy.  For a contractor to be financially solvent, they should be debt-free and operating at a profit on every job.  Unprofitable businesses typically do not survive long enough to be able to service their customers.  Some may go out of business in the middle of a job.  Because only happy customers become advocates, find out what your prospective contractors are doing to retain customers and make them advocates of their services.  Consider the amount of risk you are willing to take with an unknown resource and work out the worst-case scenario for the purposes of this formula.

Value of improvements is the cost of goods and services, divided by the risk of relationship.  If the cost is low and the risk is high, chances are your value will be very low.  If the cost is high and the risk is low, then chances are your value will be high.  Because of these variables, value is a relative term.  High value is often perceived as lifestyle enjoyment and improved resale value.

Deals and discounts on consumer products are conditioning our buying habits for professional services.  The problem is not so much that there are fewer home improvement projects to be had, but that undereducated consumers get caught by surprise when they find out their contractor is not performing with their best interest in mind.

Protect your investment and proceed with caution.

How much green does it take to go Green?

If you have been considering improving your home with “green” products, you’ve certainly noticed the cost is considerably more than their standard counterparts.  Because the products and techniques are not yet mainstream, they do cost more.  How much more depends on quantities, dependencies and individual conscience.

The three major components of building green are: 1) energy efficiency (measured in both in the effectiveness of the climate control device and the ability for the house to maintain temperature), 2) renewable products (short growing cycle or made from recycled materials) and 3) sustainability (low maintenance and ability to operate “off the grid”).

When renovating an existing home, it is unrealistic to expect a positive return on a green investment.  The decision to reduce the “carbon footprint” of your home is largely based on your desire to be environmentally responsible.  The more green you are willing to go may lead you into a series of dependencies, which begs the question: where do you stop?

For starters, some good cost-to-value improvements include complete window replacement, high-efficiency furnace, attic insulation, Energy Star appliances, low-flush toilets and gas insert fireplaces.  Do some homework before selecting your solutions to avoid adding grief to the amount of green you are budgeting to spend.  Click the Consumer Resource tab on my website for tips on selecting a contractor.

For more information about this topic and a list of resources visit www.builtgreen.net.

Michael Tenhulzen, CGR, CAPS is President of Tenhulzen Remodeling in Redmond (425) 885-9871 www.tenhulzen.com.

Mothers Day deliveries

Moms rule the house.  Without them, our business would be entirely different.  It is for this reason that Tenhulzen Remodeling is proud to announce that over 30 of our selected customers from the past couple years received a special delivery today:  A Mothers Day flower arrangement and gift of our Silver Premier Residential Services membership.

Happy Mothers Day to all the moms within reach of this message.  Especially to my mother and to my wife.

Michael Tenhulzen, CGR, CAPS
President, Tenhulzen Remodeling, inc.

May e-zine

The May issue was released 5/2/11.  Click here to subscribe.