Expensive remodeling costs you haven't planned for

Amy Howell Hirt

Ten percent doesn't sound like much… that is, until a contractor is advising you to add it on to the four- or five-digit price of your remodeling project.

The reality of remodeling is that there are many unexpected costs you may never see coming.

"We usually recommend people add 10 to 20 percent onto the budget, because there are always unforeseen things," says Jeff Gorszczyk, certified remodeling project manager with Cook Remodeling & Custom Construction in Mesa, Ariz.

In fact, a survey on the "Top Five Remodeling Headaches" from Consumer Reports supports Gorszczyk's projection: Half of the respondents faced unexpected remodeling issues that cost hundreds to thousands of dollars, according to senior editor Daniel DiClerico.

But hiring a qualified contractor - and heeding their advice regarding budgeting and potential problems - will go a long way toward preparing yourself financially and emotionally for these unexpected budget-crushers.

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"A good contractor can't see through walls," DiClerico says, but will know what to check for to help ensure there are no surprises down the line. "They will do the necessary poking-around to find out what's going on behind the walls before asking you to sign a contract," he says.

Want to see what's behind the curtain of your home remodel? Here are few of the most common-yet-unexpected expenses people run into on remodeling projects, and how to plan for them.

Unexpected Expense #1: Pest Control

If only these walls could talk! Many unexpected remodeling costs come from issues that are concealed behind a home's walls and floors. In fact, insects and other pests that are drawn to the food and moisture found in kitchens and bathrooms may remain hidden behind walls, says Consumer Reports in an article titled "'If only I had known that before…' and other remodeling headaches."

That was the situation that blogger and retro-décor enthusiast Pam Kueber encountered during a renovation of her home office. Kueber, who blogs at RetroRenovation.com, uncovered a nest of carpenter ants within the walls, resulting in a $350 charge from the exterminator.

The good news is that some insects, like termites, do leave tell-tale trails that a good contractor should spot, DiClerico says. And even if your state doesn't require a pre-remodeling inspection, it might be smart to get one so that you know what costs you could incur.

Unexpected Expense #2: Rotten Flooring

While unseen, slow-but-steady leaks from a toilet or shower can cause serious damage. Water can eventually rot the wood that supports everything in a room - creating not only a dangerous situation but a very unexpected remodeling expense.

This is what contractor Jim Casey, of Jim Casey Construction in Athens, Ga., experienced during a bathroom remodel. A previously undiscovered shower leak had rotted the floor joists underneath the shower. To provide the proper support, the entire floor and sub-floor had to be replaced - adding a significant amount to the cost of the project.

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Moral of the story? If you're remodeling a kitchen or bathroom, be sure to consider this scenario, as the damage can be widespread and costly, DiClerico says.

Unexpected Expense #3: Outdated Wiring

For a remodeling project to pass electrical inspection, the wiring must be brought "up to code." This refers to compliance with the National Electrical Code (NEC), which most states and municipalities have adopted, according to the National Fire Protection Association.

But it's not always easy to tell if the wiring has been updated prior to beginning a remodeling project. While upgrades require a permit and must be reported to the county, that doesn't always happen, Gorszczyk says, so it's not always easy to know the age of a home's wiring. And once the contractor comes across outdated wiring, "We have to upgrade it or we're liable," he says.

This kind of project can quickly snowball into a major shock to your budget - if you aren't prepared. For an average-sized home, updating wiring will cost $3,500 to $8,000, according to the National Association of Realtors' HouseLogic's article titled "Do you need an electrical service upgrade?" Costs can also range as high as $20,000 if a home is particularly large or the wiring is difficult to access.

Unexpected Expense #4: Structural Issues

Like electrical upgrades, structural revisions made by a previous homeowner might not always appear in the property report that your contractor will pull prior to beginning work, DiClerico says. In some areas, renovations made to homes may even pre-date the local jurisdiction's documentation system.

This means it can be difficult to detect if weight-bearing walls and joists - which carry the serious load of supporting the overhead floors - have been compromised by moisture, or if drywall has been weakened by high humidity or a water leak, notes Granite Transformations, a granite countertop company in Miramar, Fla.

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Other unrecorded structural issues may not pose a threat to your safety, but they can endanger your budget.

In an article by the National Kitchen & Bath Association titled "What to Expect…When Expecting a New Kitchen or Bath: Part I," kitchen and bath designer Molly Erin McCabe recalls a project that uncovered an abandoned chimney in the wall where the light switches were to be installed. Because it wasn't cost-effective to remove the chimney, they moved the light switches, and likely incurred an additional charge for the plan change.

Unexpected Expense #5: Asbestos Removal

The building blocks of homes built in the 1970s or earlier - insulation, flooring, wall materials - usually don't look much different from modern-day materials, but they may contain asbestos. And what you can't see could hurt your wallet, and even your health.

That's because disturbing these materials through remodeling can release fibers that have been found to increase your risk of developing lung disease, according to the U.S. Environmental Protection Agency. And unfortunately, the only way to know for certain if an older home has asbestos is to hire a licensed inspector to take a sample for testing.

If the asbestos material is in bad shape, a professional may need to seal or cover it, according to the EPA, and that comes with additional costs.

Unexpected Expense #6: Plumbing Update or Repair

While many homeowners don't include new plumbing in their budget - opting to work around the existing system, it's usually cheaper to do any necessary repairs while the system is exposed during remodeling - and before any minor issues have developed into leaks or breaks that cause costly water damage.

That's why the National Association of Realtors, in the article "Do you need to replace your plumbing?", suggests checking for corrosion, discoloration, dimpling, stains, or flaking in the tubing. By checking before the work begins and including the cost in the budget, you might avoid the shock of this unexpected expense.

In addition, plumbing systems can be damaged by remodeling work, notes Conover Plumbing in Culver City, Calif. While this dilemma can't be anticipated, homeowners can plan ahead by knowing where the main water shut-off is located in order to minimize damage.