7 Homeowner Mistakes That Cost You Thousands on Renovations
Every year, homeowners across the country lose billions of dollars to preventable renovation mistakes. According to the National Association of Home Builders, the average kitchen remodel costs between $25,000 and $75,000 — and poor decision-making can inflate that number by 20% to 40% without adding any real value. The good news is that nearly every one of these costly errors is avoidable once you know what to watch for. Here are the seven most common mistakes and exactly how to sidestep them.
1. Not Getting Enough Quotes
This is the single most expensive mistake homeowners make, and it happens constantly. You get a referral from a neighbor, call one contractor, like the person, and sign on the dotted line. It feels efficient. In reality, it can cost you anywhere from $2,000 to $15,000 or more depending on the size of your project.
Contractor pricing varies dramatically — even among licensed, reputable professionals working in the same zip code. A 2024 study by HomeAdvisor found that quotes for identical bathroom remodels in the same metro area varied by as much as 47%. That is not a typo. Nearly half the total project cost separated the highest bid from the lowest.
How to Avoid It
Get a minimum of three quotes for any project over $1,000. Five quotes is even better for large renovations. Make sure each contractor is bidding on the same scope of work by providing a written description of what you need done. Tools like Quoterly can help you compare bids side by side against real market data, so you know immediately whether a number is fair or inflated.
2. Skipping Permits
Permits feel like bureaucratic headaches, and some contractors will even suggest skipping them to save time and money. This is a trap. Unpermitted work can result in fines ranging from $500 to $10,000 depending on your municipality. Worse, it can derail a future home sale entirely.
Title companies and home inspectors flag unpermitted work during real estate transactions. If a buyer's inspector discovers your unpermitted deck addition or basement finish, you may be forced to tear it out, bring it up to code at your expense, or accept a drastically reduced sale price. In some jurisdictions, unpermitted work voids your homeowner's insurance coverage for that area of the home.
How to Avoid It
Ask your contractor directly: "Will you be pulling permits for this work?" If they hesitate or suggest skipping permits to save you money, that is a red flag. Call your local building department to confirm which permits are required. Most permit fees are modest — typically $50 to $500 — and the protection they provide is worth many times that amount.
3. Paying Too Much Upfront
A contractor who demands 50% or more upfront before any work begins is waving a red flag. Yet homeowners agree to this regularly, often because they feel pressured or assume it is standard practice. The financial risk is enormous. If the contractor disappears, delays indefinitely, or does substandard work, you have already surrendered your primary leverage: the money.
The Federal Trade Commission receives thousands of complaints annually about contractors who collect large deposits and never complete the work. The average loss in these cases exceeds $8,000.
How to Avoid It
Never pay more than 10% upfront, or the cost of materials that need to be specially ordered — whichever is less. Structure remaining payments around completed milestones. A typical schedule might look like 10% at signing, 30% after demolition and rough-in, 30% at the midpoint, and 30% upon final completion and your sign-off.
4. No Written Contract or Vague Contracts
A handshake deal or a one-page "estimate" is not a contract. Without a detailed written agreement, you have almost no legal recourse if something goes wrong. And things go wrong on renovation projects more often than most people realize — roughly 30% of remodeling projects experience significant disputes between the homeowner and contractor.
Vague contracts are nearly as dangerous as no contract. A contract that says "remodel kitchen" without specifying cabinet brands, countertop materials, appliance models, paint colors, and completion timelines is an invitation for misunderstandings and cost overruns.
How to Avoid It
Your contract should include, at minimum:
- Detailed scope of work — every task, material, and finish specified
- Total price and payment schedule — tied to milestones, not dates
- Start and completion dates — with penalties for unreasonable delays
- Change order process — how modifications are priced and approved
- Warranty terms — what is covered and for how long
- Dispute resolution — mediation or arbitration clauses
- Permit responsibilities — who pulls and pays for permits
5. Not Checking References or Reviews
It takes about 30 minutes to check a contractor's references and read their online reviews. Skipping this step can cost you tens of thousands of dollars and months of stress. A contractor with a pattern of poor work, missed deadlines, or abandoned projects will almost always have a trail of unhappy customers — if you bother to look.
The Better Business Bureau reports that home improvement complaints consistently rank among the top five consumer complaint categories nationwide, with a median loss of $4,200 per complaint.
How to Avoid It
Ask every contractor for at least three references from projects completed in the last 12 months. Actually call them. Ask specific questions: Was the project completed on time? On budget? Were there any surprises? Would you hire this contractor again? Additionally, check their license status with your state licensing board, verify their insurance is current, and read reviews across multiple platforms — not just the testimonials on their own website.
6. Ignoring Scope Creep and Change Orders
Scope creep is the silent budget killer. It starts innocently: "While we have the wall open, should we move that outlet?" or "Do you want us to add recessed lighting since we are already in the ceiling?" Each small addition seems reasonable in isolation, but they compound rapidly. Industry data shows that unmanaged change orders increase the average renovation budget by 15% to 25%.
Some less scrupulous contractors deliberately underbid projects knowing they will make up the difference through change orders once work is underway and the homeowner feels committed.
How to Avoid It
Establish a written change order process before work begins. Every modification to the original scope should be documented with a description of the new work, the additional cost, and the impact on the timeline. Both parties must sign before any extra work begins. Set a personal budget buffer of 10% to 15% for genuine surprises like hidden water damage, but do not let that buffer become a slush fund for impulse upgrades.
7. Always Picking the Cheapest Bid
This might seem counterintuitive in an article about saving money, but the cheapest bid is often the most expensive choice in the long run. A bid that comes in 30% or more below the others is almost always a warning sign. The contractor may be cutting corners on materials, using unlicensed subcontractors, skipping permits, or planning to hit you with change orders once they have started.
A study by the Remodeling Futures Program at Harvard found that homeowners who selected the lowest bidder were 2.5 times more likely to report dissatisfaction with the finished project and 3 times more likely to require costly repairs within two years.
How to Avoid It
Compare bids based on value, not just price. Make sure every contractor is quoting the same materials and scope. If one bid is significantly lower, ask why. There may be a legitimate reason — lower overhead, a schedule gap they want to fill — but there may also be a catch. Quoterly makes this comparison easier by benchmarking each line item against current market rates, so you can spot exactly where a bid is suspiciously low or unjustifiably high.
The Bottom Line
Renovation projects are significant financial commitments, and the margin between a successful project and a costly disaster often comes down to preparation. None of the mistakes on this list require specialized knowledge to avoid. They require diligence: getting multiple quotes, reading contracts carefully, checking references, managing payments strategically, and staying engaged throughout the process.
The homeowners who consistently get the best results are the ones who treat their renovation like the five-figure or six-figure investment it is. Take the time to do it right, and you will save thousands of dollars while getting the home you actually want.