Do you need a permit?

Do you need a permit? This is a bit of a “chicken and egg” question. In a perfect world, you’d only take on a renovation project that didn’t require a permit. I think of these projects as a refreshing; interior paint, carpet and floor covering, cabinet re-facing, etc. These are all activities that don’t require a permit.

Since getting any permit entails time and money, avoiding a project where they are required means you save both. However, having to obtain a permit shouldn’t be the sole reason to disqualify a project.

There are some relatively simple projects that usually require a permit, these include:

• Building a deck

• Rebuilding a porch

• Moving or removing a non-structural wall

These are simple projects that add a lot of values, even though they require a permit, don’t disqualify them simply because a permit is required. 

What’s your home renovation program?

On large commercial or institutional projects, the client spends a lot of time creating what’s called a program or project scope (not to be confused with a government program, like the FHA 203k one we discuss here).

This document is given to the architect/design team and acts as kind of a project bible to define the goals of the project. Typically, a program/scope document addresses:

• The project budget

• The project schedule

• Square footages of all affected areas

• The project design goals

• The project's sustainability goals, etc.

By their nature, these “programs” are complex.  Now, I’m not suggesting that you need anything of this complexity for your home project, but there is tangible value in thinking through these questions. Also, before you can intelligently hire a design professional, you’ll need to know these answers anyway.

When planning your home project, consider these big-picture categories mentioned above. This will be helpful for you in understanding what you need and then to share with your designers. 

BuildSmart tip: being ready to engage with your professional team by understanding your project's scope will save significant money and headaches as you proceed.

Tried and true, or tired and true? Design matters

For most local home builders, who re-purpose home designs long past their “sell by date”, tried and true quickly becomes “tired and true”. These uninspired designs, only add to the weak demand for new homes.

When you go to sell a house you’ve renovated, your local builder’s somnolent embracing of design has importance to you.

As an owner/investor embracing design can give you an edge.

If you are building to resell, competing homes will undoubtedly be old, tired or suffer from “Homedepotism”. By being the hip, well designed house, you will instantly be miles ahead when it’s time to market your home.

BuildSmart tip: Embrace well considered design when you renovate if you want to see the maximum return upon resale.

About home design and designer homes

The housing industry has only slowly and inconsistency integrated design into their product mix. Given that design and architecture is an integral part of housing, it’s surprising the home building industry hasn’t embraced it more completely. I think the reason for this is as follows;

Home building is a traditional industry with a “if it isn’t broke, don’t fix it mentality”. Most builders stick with floor plans, house plans and community layouts that have worked in the past and that they know home buyer will like. 

As an industry, home building is a mix of large publicly traded companies and small independent builders. While large builders have in-house architecture and design staffs that are up-to-speed with current design trends, much of the home building industry is still small scale and local.

Most small builders look at re-using proven home designs as a way to minimize their risk, so they keep using tried and true designs.

At its best, these trends create communities of visual consistency. At its worst, tracts and tracts of cookie-cutter houses blight the built landscape. 

Not every house can be a custom one - and we're almost thankful for that when it comes to the opportunity for rehabilitation. If you're looking for a property to rehab and live in, a custom home, with custom solutions, finishes and fixtures can be a money pit. 

BuildSmart can help you understand and identify homes that are well designed and appropriate for rehabilitation. Contact us today to learn more. 

Home inspectors

Home inspectors occupy a strange role in the real estate transaction. Since virtually every lender requires a home inspection before making a loan, you obviously need them for a transaction. The costs of these inspections (typically $300-$400) is paid for by the home owner, so in theory at least, the home inspector is working for the buyer.

The reality though, is that again, since the agent is focused on getting the deal approved and closed, the allegiance of the home inspector is more closely aligned with the real estate agent.

Also, over the course of a year, the inspector is only going to do one inspection for you, but many more with the agent. So, when it comes time to disclose the hard fact/unpleasant facts regarding an inspection, inspectors have a tendency to sugar coat the facts in order to “keep the deal” together.


I’m not implying they are acting fraudulently, it’s more a matter of tone and presentation. Trying to sugar coat any findings that might “blow-up” a deal. The inspector only need to complete 120 hours in home inspection instruction, plus 40 hours of field training, so how much they can really tell you is impossible to say.

BuildSmart take away: don't assume a home inspector is working for you. Consider using one who isn't directly tied to your agent.

Lenders and mortgage brokers

Since the real estate shake out, the world of lending has changed tremendously.  Previously, everyone was a mortgage broker or “mortgage banker” if you were high-falutin.

Storefronts for independent mortgage brokers opened faster than Budweiser stand at a NASCAR race - appeared faster than ice cream trucks on a sunny day.

Since that time, there has been a contraction in the number of lenders (Countrywide being purchased by Bank Of America, for example), increased regulation of individual brokers and a drop in the number of mortgage applications. This has had the combined effect of forcing many people from this  industry.

As a group, lenders suffer from a lack of transparency; unlike real estate agents, they have a less of a public presence (no pictures on billboards) and tend to work behind the scenes.

Many lenders and mortgage brokers get referrals from real estate agents, rather than directly from potential clients. Working with a lender/mortgage broker recommended by your real estate agent is not necessarily a bad thing. Real estate agents have an obvious interest in seeing a transaction close and increase their odds by working with mortgage brokers who have a track record of getting deals funded.

Before, the economic reset, having transaction close successfully this was less of an issue, however, with tighter underwriting and appraisal standards, working with someone who can get a transaction financed is now more important than ever.

Your real estate broker is not your investment strategist

Be clear about what your real estate agent is supposed to be doing for you. Many real estate agents freely offer advice (maybe too freely). They can be a great source of information about local market data (time on market, closed transactions, sold price vs. asking price, etc.) However, once you get out of these topics, you are swimming in the deep end of the pool.

Asking “how’s the market”, “is this a good time to buy” or other open ended questions of this type is non-productive. Real estate agents simply don’t have the skill set to address these issues.

Remember - your real estate broker is not your investment strategist.