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An illustration of a white door on a blue house.
An illustration of a white door on a blue house.
An illustration of a white door on a blue house.

Published July 29, 2015.
Updated March 14, 2019.

Three big ones to avoid.

We're all emotionally invested in our homes, so it's exciting to plan an improvement project. 

Maybe you envision a chef's workspace where there's now a dreary kitchen. Maybe there's a baby on the way and a third bedroom suddenly makes lots of sense. Or you're looking at selling, and think that a big upgrade to your bathroom could be just what moves your house off the market quickly.

You want to see your vision transformed into the walls, fixtures, and colors — and you want it done now!

Slow down, homeowner. Just like a home is a big investment, making changes to that investment requires some homework to ensure everything turns out like you imagined.

Here are three big home makeover mistakes that can quickly turn your dream project into a big stress:

1: Assuming all bids are the same.

The bidding process is important for more than the impact it might have on your wallet. There are two major types of contractor bids, and they each look very different.

Cost-plus bid.

A cost-plus bid — also known as "time and materials" or "estimate of cost" — estimates the cost of materials for a project as well as the amount of time that the contractor will likely spend on it. These bids could have many line items, depending on how big your project is.

Cost-plus bids are just estimates, and are intended to give you a general idea of what the contractor thinks the project will cost you. In cost-plus contracts, plans for everything from additional time approval to progress reports should be carefully laid out to protect everyone from misunderstandings.

Fixed-price bid.

A fixed-price bid, by contrast, is a proposal of exactly what work will be done, and the final cost of that work. Usually, fixed-price bids include all of the materials and work the contractor will be doing. The contract should clearly lay out what is included and what is not, and what the process for any changes will be.

Giving your home a makeover should be about what you want to live with for several years, not about what it will add to the sales price of your home.

2: Not paying attention to insurance.

In Washington, contractors must be registered with the Department of Labor & Industries, post bonds, and carry specific levels of liability insurance. You can verify a contractor online at the department.

In Idaho, contractors must be licensed through the Division of Building Safety to do electrical, HVAC, or plumbing work. The Idaho Bureau of Occupational Licenses-Idaho Contractors Board requires the registration, though not licensure, of all other contractors that do construction work.

Bonding provides a homeowner with recourse if a contractor walks away from a job before it's finished or if the work is subpar. A contractor's liability insurance — and workers' compensation coverage for employees — protects you from property damage, as well as from liability if someone gets injured.

Before the work starts, check with your own insurance agent to see whether you should temporarily increase your personal liability insurance while workers are on the job. Once any significant project is done, it's important to contact your insurance agent again. If you've increased the square footage of your home or increased its value, that should be reflected in your policy. Otherwise, you may not be covered for your home's full replacement cost.

3: Planning to turn a quick buck.

While it's tempting to tell yourself that the money you spend on a home makeover is an investment in your home's value, it is important to temper that with a dose of reality. If you intend to sell your home shortly after making upgrades, then you are not likely to get the full cost of those upgrades back.

Remodeling magazine does a yearly survey of the cost of upgrade compared to the value it adds to a home sale in that same year. For instance, in the 2019 Spokane area survey, the magazine reported that the most you could expect to recoup on new siding was 91.5% of the cost. Big upgrades, like adding a bathroom or a full kitchen remodel, recouped 60-80 percent of their cost.

The takeaway? Giving your home a makeover should be about what you want, enjoy, or expect to live with for several years, not about what it will add to the sales price of your home.

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