Getting the Best Work from Your Contractor

Managing your contractor is your biggest job during a remodel. You must make sure the project stays on target, on time, and on budget. Get apathetic or lose your focus, and you may pay for it—literally. Here’s what you need to know to stay organized and keep your contractor and construction team on the ball.

AVOID ALLOWANCES

Make important decisions about finishes and hardware before your contractor delivers an itemized bid. Otherwise, the bid will contain “allowances,” estimates that may grossly overstate or understate the cost of items you eventually pick. Allowances ultimately can send your budget reeling. If you can’t pinpoint the master bath tile or kitchen sink, at least give your contractor an accurate ballpark price for items you’re considering. Guess higher, rather than lower; that way you’re more likely to come in under—rather than over—budget.

ESTABLISH COMMUNICATIONS

Discuss with your contractor how you prefer to communicate. Establish a regular meeting time, perhaps at the site for a few minutes before work each day. Exchange cell phone numbers so urgent questions—from either party—can get answers quickly and keep work moving. Your contractor may ask you to speak with the project manager who is running the job. Whatever the arrangement, chat at least once a day. These discussions are your opportunity to hear progress reports, review work schedules, ask questions, and voice concerns. Daily chitchats help identify and remedy problems in their infancy. And even though no one likes change orders, it’s better to spend a little more to fix a problem then to live with it for the next 10 years.

KEEP A PROJECT JOURNAL

Part scrapbook, part diary, part to-do list, a project journal will help you stay organized. Use a notebook to record progress, remember questions you want to ask your contractor, jot down ideas, record product order numbers, and anything else that comes along. It’ll help you keep things on track, communicate with the team, and provide a record of exactly who said what when—which could help you iron out disagreements later on.

TRACK ALL CHANGES IN WRITING

No matter how well you planned, your home improvement job will change as it moves along. You may encounter unforeseen structural issues, or you may decide to include additional work. Any good contractor can handle these changes—just make sure all costs are specified in writing first. Tell the contractor at the outset (and put in the contract) that you want to sign off on written change orders for anything that’s going to add to the bottom line of the job. That means the contractor has to give you a bid (a description of the change and a fixed price for what it will cost) and you both have to sign it before the work is done. This eliminates misunderstandings about the scope and price of the new work. Also, it helps you keep track of your bottom line.

CHECK ALL WORK

It’s easier to nip problems in the bud than to undo mistakes after the fact, so diligently check your contractor’s work. As fixtures arrive on site, compare model numbers on the boxes against your receipts, invoices, and the contractor’s bid to ensure that the correct product was delivered. Check locations of walls, windows, and door openings against blueprints. To the extent that it’s possible, conduct these investigations after hours or during lunch breaks so you don’t seem like you’re looking over the workers’ shoulders (even though you are).

PAY ONLY FOR COMPLETED WORK

Money is power. As soon as you’ve paid the contractor, you no longer have the upper hand. It’s crucial that you keep the payment schedule in line with the work schedule. The contract should establish a series of payments to be made when certain parts of the job are completed. For example, your contract could stipulate that you’ll pay in three equal installments, with the last payment made after the project is complete, and after you and your contractor agree the work is satisfactory. Never put down more than 10% upfront; that’s too much cash to hand over before any work is complete. Your contractor should be able to get any necessary supplies on credit.

BE A GOOD CUSTOMER

One of the best ways to get quality work out of a construction crew is to make them enjoy working for you. That means making decisions quickly and paying on time. It also means being friendly and accommodating of the workers in your house: designating a bathroom they can use, greeting them by name each morning, and perhaps serving cold lemonade on a hot day. Complimenting their work (as long as you feel it’s worthy of praise) can be a great way to motivate others to do their best.

---------------------------------- By Oliver Marks. A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

Source: http://www.houselogic.com/home-advice/contracting/getting-best-work-contractor/

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NINE COMMON MISTAKES HOME OWNERS MAKE ON THEIR TAXES

As you calculate your tax returns, consider each home tax deduction and credit you are — and are not — entitled to. Running afoul of any of these 9 home-related tax mistakes — which tax pros say are especially common — can cost you money or draw the IRS to your doorstep.

Sin #1: Deducting the wrong year for property taxes

You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind — that is, you’re not billed for 2013 property taxes until 2014. But that’s irrelevant to the feds. Enter on your federal forms whatever amount you actually paid in 2013, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount.

Sin #2: Confusing escrow amount for actual taxes paid

If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two. For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

Sin #3: Deducting points paid to refinance

Deduct points you paid your lender to secure your mortgage in full for the year you bought your home. However, when you refinance, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year.

Sin #4: Misjudging the home office tax deduction

This deduction may not be as good as it seems. It’s complicated, often doesn’t amount to much of a deduction, has to be recaptured if you turn a profit when you sell your home, and can pique the IRS’s interest in your return. Hampton’s advice: Claim it only if it’s worth those drawbacks. If so, here’s what to know about what you can write off.

Sin #5: Failing to repay the first-time home buyer tax credit

If you used the original home buyer tax credit in 2008, you must repay 1/15th of the credit over 15 years. If you used the tax credit in 2009 or 2010 and then sold your house or stopped using it as your primary residence, within 36 months of the purchase date, you also have to pay back the credit. The IRS has a tool you can use to help figure out what you owe.

Sin #6: Failing to track home-related expenses

If the IRS comes a-knockin’, don’t be scrambling to compile your records. Many people forget to track home office and home maintenance and repair expenses, says Meighan. File away documents as you go. For example, save each manufacturer’s certification statement for energy tax credits and lender or government statements to confirm property taxes paid.

Sin #7: Forgetting to keep track of capital gains

If you sold your main home last year, don’t forget to pay capital gains taxes on any profit. You can exclude $250,000 (or $500,000 if you’re a married couple) of any profits from taxes. So if your cost basis for your home is $100,000 (what you paid for it plus any improvements) and you sold it for $400,000, your capital gains are $300,000. If you’re single, you owe taxes on $50,000 of gains. However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523.

Sin #8: Filing incorrectly for energy tax credits

If you made any eligible improvements in 2012 — or will in 2013 — such as installing energy-efficient windows and doors, you may be able to take a 10% tax credit (up to $500). But keep in mind, it’s a lifetime credit. If you claimed the credit in any recent years, you’re done. Fill out Form 5695. Part II of the form, which covers systems eligible for a larger tax credit through 2016, such as geothermal heat pumps, can be incredibly complex and involves crosschecking with half a dozen other IRS forms. Read the instructions carefully.

Sin #9: Claiming too much for the mortgage interest tax deduction

You can deduct mortgage interest only up to $1 million of mortgage debt, says Meighan. If you have $1.2 million in mortgage debt, for example, deduct only the mortgage interest attributable to the first $1 million.

This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice. Read more: http://www.houselogic.com/home-advice/taxes-incentives/common-tax-mistakes/#ixzz2MV2cwUht

TEN PIECES OF ADVICE WHEN SELLING YOUR HOME IN THE WINTER

If your home will be for sale this winter, it is important to understand some basic seasonal issues that are less significant or even non-existent at other times of the year. Here they are:

1.  Let Those Lights Shine: The best way to combat winter’s short and frequently cloudy days is to turn on your house lights. For a showing, every single light in the house must be on, even in the closets and utility/mechanical rooms.  Make sure all the bulbs are working, and stock up on all the right bulbs for lamps and fixtures so burned out bulbs can be replaced immediately.  Also, it’s a great idea to keep the lights on in the front of the house even if no showings are scheduled. People are always driving past the house, and keeping it lighted makes it look happy and welcoming.  It ias also advisable to keep the drapes and blinds open during the day to let in light and let visitors enjoy the view.

2.  Provide Convenient Parking: It’s vital that buyers have a convenient place to park. They won’t want to walk very far in cold weather or be forced to climb over a snow bank to exit their vehicle. Because parking is often more restricted around condominiums, sellers should make sure their agent can pass along parking details to buyers.

3.  Make It Easy to Enter: Winter showings can get off to an awkward start if prospective buyers arrive with snow or salt on their shoes. Put a festive area rug at the front door for a great first impression and so visitors can wipe their feet. Have slippers or disposable booties available, along with a bench or chair, if there is room for one, where a visitor can sit and easily remove or put on their boots.

4.  Keep Odors Under Control: Any home tends to be stuffy in winter when windows are opened rarely. That can allow odors to build up, which can be a turn-off to buyers.
Pet odors can be especially worrisome in winter. Use a room fragrance if needed, but nothing too strong, and I recommend that in winter sellers clean more often. For example, change the cat litter daily, rather than every third or fourth day, or even consider using an air purifier.
If pets are in the house, consider setting the thermostat control so that the furnace fan runs constantly during the day to keep air moving through the house and dissipate odors. Also try to avoid strong cooking odors, especially if a showing is scheduled that day.
Cultivate a Festive Look: Appropriate decorations for Christmas and even St. Valentine’s Day help give a home a cheerful look during the winter months.
“I really believe that holiday decorations can help homes sell, but don’t go to excess,” suggests Starr Zook of RE/MAX On Track in Aledo, Ill. “Keeping small, decorative white lights on trees and bushes pretty much through the winter season is fine, but other decorations should be taken down quickly once the holiday passes.”
Don’t Ignore the Outdoors: Make a good first impression on buyers with a neatly maintained yard. Walks and steps should be kept clear, especially of snow and ice.
Look after Condo Common Areas: If the home you are selling is a condominium, your job as a seller may be relatively easy in winter, with no snow to shovel or yard work to worry about. However, that is only the case if your condominium association does its job well.
If the association isn’t doing it, the homeowner may have to take responsibility for keeping the entrance area and hallways clean. If the association isn’t getting snow shoveled promptly, consider buying some de-icing salt and sprinkling it judiciously around the building entry.
Don’t Roast Buyers: We all tend to prefer a specific temperature for our homes during the winter, but don’t blast buyers with hot air. Keep the temperature at a comfortable 65 degrees for all showings. Remember, buyers are likely to be wearing their coats even as they walk through the house.
Keep Seasonal Clothing under Control: “One major challenge of selling a home during the winter months is the overabundance of cold weather gear that must be stored,” says Mike Mondello. “A buyer doesn’t want to find the mudroom filled with boots or the hall closet overflowing with heavy coats. Shift some winter coats to another closet and put anything not needed in the closet into storage.”
To keep gloves and scarves from piling up in the front hall or mudroom, put a special container for them, such as a decorative chest, where the family typically enters the home.
Encourage Day Time Showings: A home shows to its best advantage during daylight hours, which are relatively scarce in winter.
“Encourage your agent to show your home before 3 p.m. and have it ready to show by 9 a.m. if you want the best results,” Granacki recommends.
Despite the special challenges of marketing a home during winter, there also are benefits, notes Laura Ortoleva, a spokesperson for the RE/MAX Northern Illinois real estate network.
“Buyers out looking at homes in December or January are, as a group, quite serious about buying. Therefore, sellers tend to benefit because each showing is more productive, and fewer showings are needed to sell the property,” she said.

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