Check out the chart from BuildFax on how many homebuyers are remodeling these days. I don’t quite grok what the index on the left means, but the line moving steadily upward gives a pretty clear picture of the trend.
I may even be part of the trend, if you count our current landscaping project, and the fact that we’re on our favorite contractor’s waiting list to tile the bathroom floor. (It’s been months. I guess good contractors are being kept busy.)
So, this seems like a good time for a couple of reminders from your legally minded friends at Nolo:
1) Sign agreements with whoever you hire. These really, truly don’t have to be anything fancy. It’s not the end of the world if you leave out the arbitration and choice of law clauses. But unless you get the basics down in writing — like who the contractor is and his or her official business address, what he or she is going to do for you, by when the job should be finished, and what you’re going to pay for, on what schedule — there’s guaranteed trouble ahead. For further advice on drafting a solid agreement, see The Essential Guide for First-Time Homeowners, by Ilona Bray and Alayna Schroeder (Nolo).
2) Keep records of repairs and improvements. These will be especially important if you ever sell the house. Your buyers will want every detail of what work was done, so that they can be assured that the appropriate permits were obtained, understand the house’s history, and know who to call (or not) for follow-up work. You’ll also want to be able to add up everything you spent on home improvements, to reduce your cost basis in the event that you profit on the sale of your home and face any capital gains tax. For more on those issues, see Easy Ways to Lower Your Taxes, by Sandra Block, personal finance columnist, USA TODAY, and Stephen Fishman, J.D.