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Author: YewGuise Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121150  
Subject: Re: Avoid Tax Problem with House Date: 12/8/2013 2:48 PM
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OK, totally OT for taxes:

Basic home renovation options are:

1. Design-Build. Design and construction by same company.

2. Design by architect, then construction by independent G.C. after competitive bid process.
Even the most upstanding contractors run the project to their own benefit as much as possible. It's well worth it for the owner to have an architect on his side during construction, to review requisitions for payment (e.g., contractor says "I'm 80% done framing, so you owe 80% of the framing cost," but to you it looks like he's 50% done, so you can let your architect determine what percentage is right), to review materials substitutions (e.g., contractor says "These doors are stain-grade," but to you they look paint-grade, so let the architect tell him he can't use them), etc.
A contractor likes to keep the homeowner happy to a point, but he really defers to the architect, because the architect is (1) in the field and knows what he's talking about, and (2) a source of future business.

In fact, my daughter's an architect (3000 miles away) and offered to design my home renovation, but even though she's terrific I said no thanks, because I wanted someone local who knows the local contractors and can both guide in their selection and help supervise during construction (not that the he would be there every day, but he'd be available via phone/email, and would visit as needed).

I thought I'd have the best of both worlds by hiring a Design-Build firm owned by an architect, but it turned out his designs were uninspired. He'd done some terrific work for others, so I figured the fault lay with my house and budget, but when he gave me the construction price it was so over budget we parted ways (and I got the ridiculous haircut and swore off Design-Build). My new architect came up with a terrific design, and we're in the bidding process now. I've paid him $18k so far, and for another $5k will keep him on board through construction.

Not sure whether the price differences (between your architect and mine) are due to scope of work or regional differences, but the concept of having an owner's rep during construction is the same.

Best of luck with your house hunt, renovation, taxes, and new life together!

YG
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