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Angie's List: Home Remodeling Tips

By Jim Donovan

PHILADELPHIA (CBS) -- This time of year many people are thinking of doing some remodeling. Updating things like your kitchen or bathroom can actually be a smart investment. But in this week's Angie's List, Jim Donovan shows you why you need to be smart when it comes to doing any upgrades.

Remodeling your kitchen or bathroom won't just make your home look nicer, it can be a great investment too.

"But the key here is not overdoing it, but keeping up with the Jones's. So if you're the only house in the neighborhood without granite countertops then it makes sense to add them, if you're not, skip out on that extra," said Angie's List founder, Angie Hicks.

The best way to make sure your home improvement job goes smoothly, make a clear plan.

"Plan ahead. Lay out your budget. Have ideas ahead of time and then communicate with your contractor regularly. That starts with the estimate, documenting in the contract, all the way through the entire project," said Hicks.

Any major renovation can end up being very expensive so be smart when it comes to arranging payments.

"The one thing consumers should remember is that the payment schedule on a remodel job is a negotiable item. Be comfortable with how the payments are going to work. Typically what happens is payments are tied to certain hurdles. Make sure you hold back money at the end until you are completely, 100 percent satisfied before you make your final payment," said Hicks.

More from Angie:

Projects with a high return on investment: If you're going to invest in projects designed to improve your home's value, it makes sense to know what remodeling projects will give you the most return for your money.

  • Kitchens and baths

Projects with the lowest return on investment: Unless your home is the only one on the block without these items, these projects could actually detract from your home's attractiveness.

  • Pool
    Home office
    Sun room
    Master suite
    Adding a third bay to the garage

There are a number of routes you can go when remodeling your kitchen and bathroom - from simple items such as replacing a fixture or floors - to a complete remodel that includes expanding the size of the room. Where you live, material selections, and the scope of the work are all factors that determine costs and can make a difference in your budget.

Angie's List tips: How to hire the right remodeling contractor:

Know what you want: Before you begin talking with contractors, read remodeling magazines, search the Internet for designs and materials and put your ideas on paper to give potential contractors a better sense of your expectations.

Get estimates: Get at least three written estimates to review. Make sure the estimates include the same things so you're comparing apples to apples. Never hire on price alone.

Do your research: Check out contractors in your area using Angie's List and talking to your neighbors. Ask for references from your potential contractors and call those customers. Try to get a customer who's been in the remodeled home for several months so you can see how the work has held up.

Require proof of proper license, certification and insurance: if your contractor can't show that, get another one no matter how nice he or she seems. If your home is older than 1978 your contractor must be certified in lead safe practices - ask for that documentation as well.

Working with a General Contractor (GC): Get everything in writing from the GC, including the names of the subcontractors and suppliers. Ask your GC to provide lien waivers that show subcontractors and suppliers have been paid. Stay in touch with the subcontractors and make sure they're being paid on time. If possible, make checks out to both the contractor and subcontractors or suppliers, requiring two signatures to cash.

Read the contract BEFORE you sign: Make sure the job details, warranty, payment terms and penalties for not completing work are spelled out in your contract. Documentation is often the best ammunition you have if things go wrong.

Paying for the project: Expect a minor kitchen remodel to cost about $20,000 and a minor bathroom remodel around $10,000. Never pay the full cost of a project up front. Your payment schedule should be clearly spelled out in your contract. Tie payment plans to the job's progress. Most contractors will ask you to pay a portion of the project upfront - which is OK - but you can negotiate that down payment. Hold back the final payment until you're satisfied with the work.

Communicate with your contractor: Every project is going to have something unexpected pop up. To get the most cost-effective work out of your tradespeople, outline the scope of your project and establish a budget in advance. Make sure you are communicating your wants and needs directly with the contractor overseeing the project.

Prepare for the stress/mess of a remodel: Regardless of size, all projects will include unexpected issues that may cost more or delay completion. Be prepared for stress as the project stretches on, work crews enter your home, materials may pile up, or you might have a few days without a working kitchen/bathroom.

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