The Right Time to Remodel

With a slowing economy, rising interest rates, and house values dropping at the fastest rate since The Great Recession, homeowners are starting to stay put instead of cashing out their home's equity and moving. In a world of uncertainty, what does that mean if you are looking to remodel your home?

Banks aren't only tightening up on mortgages, they're tightening up on home improvement financing as well. Not only are the banks approving less loans, but the loans they are approving are starting to see higher interest rates than they would under the same circumstances a year ago.

With some lenders charging more interest than your high interest credit card, it can be scary trying to find the right products, at the right price, with the right financing. Then add the fact that remodeling is one of the most complained about industries in consumer complaints, and that's enough to make even the most risk tolerant consumer think twice about getting work done to their home.

So, the real question emerges: "When is the right time to remodel my home?"

There are a lot of factors that play into the answer to that question; however, here at Legacy Home Improvements, based on our internal market research, we believe that the best time to get your next project done is now.

With investors and business owners like Tony Robbins dead set on the idea that "Winter is Coming," there are a few opportunities you can take advantage of in this market. If you remodeled your home today, you could:

1. Save money by missing out on massive price increased. With building product prices up nearly 20% since 2018, and no signs of slowing down, you could potentially save hundreds or thousands by taking action on your project.

2. Increase your home value during a market correction. Exterior projects like siding, windows, doors, and roofing all have an effect on the "curb appeal" of your home. According to Remodeling Magazine, these areas consistently produce the highest returns on investment, and can help you outpace inflation.

3. Save money by using fixed interest home improvement loans. If you are considering financing your next remodel, now is the time to do it. The average rate for a $30,000 HELOC is at 7.34%, rising 7 basis points week-over-week. Home equity loan rates also ticked up. If you don't want to tap into your home's value, Fixed interest loans with lenders like Greensky and Enerbank can range from 7.99%-9.99% for customers with good credit.

There is a lot of uncertainty revolving around home improvements, financing, and the market overall. With smart financial planning you can be prepared for almost any challenge that may come your way. There's one challenge, however, that is harder to plan for than any other: Unqualified Contractors.

The most frustrating and stressful thing that can happen to a customer is to do all the research, save up the money, acquire financing, and think they've found the right company, just for the contractor to come in and do a sub-par job.

Let's face it, you aren't a remodeling pro. It's easy to miss things when you aren't an expert in the remodeling field. That's why it's imperative to choose a high-quality company for your project. Here are a few things to check/ask for when choosing your remodeler:

1. Insurance - Before signing a contract with a remodeler, ask to see their certificate of insurance. Every company must obtain General Liability insurance to operate. General liability typically covers damage that may occur to your home during a remodeling project. While that is important, it isn't nearly as important as Worker's Compensation. In most states, if a contractor has less than three employees, they aren't required to carry Worker's Compensation insurance. Worker's Comp covers you if a worker gets hurt on your project. If a company doesn't carry it, you can get stuck with tens, or even hundreds of thousands of dollars' worth of payments to cover injured workers.

2. Lien Waiver - A lien waiver is a legal document stating that your remodeler has paid their vendors and their installers for work done on your project. This is important because if a remodeler installs your project and doesn't pay their crews and vendors, those crews and vendors can then place a lien on your home. This has severe impact on things like your credit score and has to be satisfied if you ever plan to sell your home. Asking for a lien waiver upon completion will protect you from any issues that may arise if your contractor is less than honest.

3. BBB Accredited - The BBB is known for setting standards for marketplace trust in the remodeling industry. When considering a company for your project, ask if they are BBB Accredited. If they aren't, there's a good chance they may not be the best company for the job. The BBB adds an extra layer of security to make sure your project turns out the way it's supposed to.

All that being said, the best time to save money was yesterday. The next best time to save money is today. If you can make your project work financially, and you have a company you can trust, go ahead and treat yourself to that new deck.

Whether you work with us at Legacy Home Improvements, or one of our many wonderful competitors, we wish you the best of luck on your project. If you ever have questions, our exterior designers are on standby to help.