Remodel & Renovate in 07747>Question Details

Neupane, Home Buyer in Jersey City, NJ

contractor question. please help

Asked by Neupane, Jersey City, NJ Sat Aug 27, 2011

Hey, I'm a first time home buyer and considering a house that needs very few changes. But some changes non the less. Like installing kitchen vent, painting cabinet, painting old scratched hardwood floor, installing shades outside house, paving a bit of backyard, taking down a part of deck, some lawn work.. etc. Now question is how does it work? Do i hire 1 contractor and he does everything? Does one contractor does everything from electric work to painting floor? or i should hire separate? whats typical??
And also who buys supplies? Like if i want kitchen vent, and kitchen range changed, install new chandalier . Who buys it? does contractor usually have whole catalog of equipments, and appliances, lights ? Can someone guide me?
Also what should i be careful for and watch out in hiring contractor?

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Answers

7
Hi Neupane,

There are some very good general contractors who can hire all the subs to do the work. Look on The BBB website for some input.

The purchase of a house that needs repair is often a catch-22 situation, because the bank won't lend the money to buy the house until the repairs are complete, and the repairs can't be done until the house has been purchased.

HUD's 203(k) program can help you with this quagmire and allow you to purchase or refinance a property plus include in the loan the cost of making the repairs and improvements. The FHA insured 203(k) loan is provided through approved mortgage lenders nationwide. It is available to persons wanting to occupy the home.
The down payment requirement for an owner-occupant (or a nonprofit organization or government agency) is approximately 3.5% of the acquisition and repair costs of the property.

The 203(k) loan includes the following steps:
A potential home buyer locates a fixer-upper and executes a sales contract after doing
a feasibility analysis of the property with theirreal estate professional. The contract should
state that the buyer is seeking a 203(k) loan and that the contract is contingent on loan
approval based on additional required repairs by the FHA or the lender.

The home buyer then selects an FHA-approved 203(k) lender and arranges for a detailed proposal showing the scope of work to be done, including a detailed cost estimate on each repair or improvement of the project.

The appraisal is performed to determine the value of the property after renovation.
If the borrower passes the lender's credit-worthiness test, the loan closes for an amount that will cover the purchase or refinance cost of the property, the remodeling costs and the allowable closing costs. The amount of the loan will also include a contingency reserve of 10% to 20% of the total remodeling costs and is used to cover any extra work not included in the original proposal.

At closing, the seller of the property is paid off and the remaining funds are put in an escrow account to pay for the repairs and improvements during the rehabilitation period.

The mortgage payments and remodeling begin after the loan closes. The borrower can decide to have up to six mortgage payments (PITI) put into the cost of rehabilitation if the property is not going to be occupied during construction, but it cannot exceed the length of time it is estimated to complete the rehab.
Escrow funds are released to the homeowner during construction through a series of draw requests for work that is completed. To ensure completion of the job, 10% of each draw is held back; this money is paid after the homeowner informs the lender that the work has been completed and after the lender determines there are no additional liens on the property.

Try this link for more detail

http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou…

Hope this helps.

Paul Kimmel
Realtor Associate
DINEEN REALTY
3 Parlin Dr
Parlin, NJ 08859
Phone: 732-613-9300
Cell: 732-822-5310
kimmelproduction@yahoo.com
0 votes Thank Flag Link Mon Jan 28, 2013
There are a lot of ways to answer this question. A lot depends on how involved you'd like to be in supervising this project. In most cases a general contractor will handle everything you mentioned (can include the yard work) for a percentage of the cost of completing the work and handles each item from start to finish including scheduling, hiring sub contractors based on their area of expertise, and can give you a detailed breakdown of the costs associated with your job. This type of arrangement would usually take the burden off you. Most contractors would warranty the work they provide including materials used. Materials you purchase may not be included in the warranty. We got a lot of our customers through word of mouth so ask friends and you've automatically got a reference. You can check with your state licensing board for any complaints as well as the local home builder's association. Hope this helps!
0 votes Thank Flag Link Thu Sep 8, 2011
Hey Neupane:

There are Handy Men who will do most of what you speak about. Generally, you'll at least divide the work between structural/decorating vs. landscaping with the driveway work being a specialty. Within the structural / decorating end of the spectrum, you generally have carpentry, electrical, plumbing and painting. Of your laundry list of things to do, probably the kitchen vent calls for a Building Permit from the town, which your contractor should obtain but you should pay for.

Generally, the contractor purchases the materials (providing you with choices), except where something 'decorative' is involved.

For the most part, a handy man can do all you describe with the exception of a landscaper and paving specialist. Get estimates. Check references.

Keith Radhuber, Broker Assoc., Monmouth County and NYC, (848) 667-6622
0 votes Thank Flag Link Sun Aug 28, 2011
Hey Neupane:

There are Handy Men who will do most of what you speak about. Generally, you'll at least divide the work between structural/decorating vs. landscaping with the driveway work being a specialty. Within the structural / decorating end of the spectrum, you generally have carpentry, electrical, plumbing and painting. Of your laundry list of things to do, probably the kitchen vent calls for a Building Permit from the town, which your contractor should obtain but you should pay for.

Generally, the contractor purchases the materials (providing you with choices), except where something 'decorative' is involved.

For the most part, a handy man can do all you describe with the exception of a landscaper and paving specialist. Get estimates. Check references.

Keith Radhuber, Broker Assoc., Monmouth County and NYC, (848) 667-6622
0 votes Thank Flag Link Sun Aug 28, 2011
Yes, I agree, Landscaping would be separate.
0 votes Thank Flag Link Sat Aug 27, 2011
Everything you listed, I have done myself, for myself and for others; but alas, I am not a contractor, and I'm on the left coast.

I believe that my compatriates in New Jersey will be able to give you some referrals that will beat anything you could get in Home D.

My advice on the materials; if there is a light fixture that YOU want to choose, do it.
When you're ready have them give you a room-by-room estimate for parts and labor:

My only caviat would be to give them money as the work is being done, not up-front.

Good luck and may God bless
0 votes Thank Flag Link Sat Aug 27, 2011
follow up to that: some guys are telling me that everything else is one contractor but lawn work + tree removal is someone else? .. Please answer my question from both posts here :) thank u.
0 votes Thank Flag Link Sat Aug 27, 2011
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