Now is a great time for a home renovation project. Business is so slow that contractors who couldn't return calls previously are now begging for work. The whole process is more affordable. However, The Wall Street Journal reports that the payback during resale is not amazing. For example, you can expect to get back about 75 cents on the dollar if you're doing a big kitchen remodel. So try a minor upgrade instead that can freshen up your home and doesn't cost a fortune. But make sure you're doing it for the right reason -- because you and your family will enjoy the results. Don't go chasing a financial reward that's not going to be there.

Of course, having contractors in your home is not enjoyable. Clark's rule of thumb is expect it to run 30 percent over-budget and for it to take 50 percent longer than planned. One word on expense: The more specific you are about what you want to accomplish -- as to the materials, the scope of work -- the more likely you'll be happy. Hiring a contractor is like getting hitched. It's much easier to get into it than it is to get out. And the honeymoon period ends very soon once they're on board. So do thorough reference checks. Ask the contractor's former clients, "Were they on schedule? How much did they go over-budget?" Go see the homes of former customers if possible. If deadlines are important to you, write it into the contract. But in order for that clause to have teeth, you need to stipulate monetary penalties if work runs over-schedule.

We've all be hearing about how tough it is to sell a home right now. Clark's read a number of articles that give some advice to sellers that he's been championing for years. Before you go to market, you should hire an inspector to carefully vet your home. Then fix whatever it is that needs repair, and have the inspector's report and your receipts available for prospective buyers to examine. As a seller, you have to psychologically try to get inside the head of a buyer. Even though a buyer may consider a used home, they still want it to be perfect like a doll house. Imagine that a corner of your roof needs repair and you don't spend the money to fix it. When their inspector finds it, the buyer is more likely to blow the potential repair cost out of proportion and make a lower offer on your house accordingly.

What should you do if you're upside down in your home -- that is, you owe more on it than it's worth? Some lenders will permit you to do a short sale, where you sell your property for a lower value before it financially takes you (and the lender) under. This idea came from the government's FHA program, which would allow people to sell for less than they owed on a property and walk away clean without going into foreclosure. Now private industry is learning from the government's short sale idea. Remember that the average foreclosure costs a lender $70,000, so they don't really want to foreclose. A short sale could be a win/win option for everyone.

Clark has noticed that a lot of garage space is not used for parking cars very much anymore. Garages have become giant storage rooms for a lot of people. There's a whole cottage industry of contractors who will convert your garage with special shelving or storage units. The Washington Post recently reported on one such company that offers slanted walls covering, ceiling mounted bike hoists and more. Why do more and more Americans want to trick out their garages? Clark thinks it's simply because we buy too much stuff, which also accounts for the growth of the off-site storage industry. Not too far from where Clark lives, there's a posh neighborhood with a storage company that's built their facility to look like it's from colonial Williamsburg! But while storage may be necessary during certain times of life -- when you're moving or getting divorced, for example -- the bottom line is that we're just buying too much junk. When Clark goes jogging at his beach home, he passes by a house with a three-car garage. Once the doors were open and he saw that two-thirds of the garage was stacked with storage boxes from the concrete floor to the roof. Maybe we all need to stop buying so much and discard some of the stuff we don't need. Clark's wife dates everything she puts in their home's storage room. If a year passes and she hasn't needed it, she sells it or gives it away. Meanwhile, Clark never grabs a cart when he's shopping -- unless he needs to get a very heavy item. That way he can cut down on impulse buys. When was the last time you went through your closet? If you want to cut down on what you have, try having a garage sale or giving it away on Freecycle.org.

Clark is doing a renovation to his house solely for enjoyment. He and his wife, Lane, want to expand the front of their home so they have more space and can enjoy the home more. But often people renovate as a way to help sell a house or to increase the value. This rarely works. Yes, you want to fix appliances and fixtures that are broken. Cleaning, landscaping and painting are also important in terms of upkeep. But home improvements are personal, not financial in gain. Some insist that kitchen renovations give you the best bang for your buck. But, it’s important to remember that fads and trends for kitchens and other rooms come and go quickly. So, you could spend $20,000 to redo your kitchen to look more modern. A few years down the road, though, what was modern is now outdated. Stainless steel refrigerators are a perfect example. They were huge a few years ago; today, no one buys them. Spiral staircases are another loss. So, if you’re going to renovate, do it for you and your family, and don’t go overboard.

This year, we are experiencing the greatest oversupply of wine ever. At the same time, wine is getting better. So, if you like wine, you are loving it right now! Wines are much less expensive and of much better quality these days. There is a twist you need to know about though. Vineyards that normally sell expensive, high-quality wines don’t want to lose their cache or the reputation of their good name by selling their bottles for much cheaper. But they need to make money. So, they are rebottling and relabeling these expensive wines and selling them for much less. Bottles that normally cost $100 are being repackaged and sold for $10 or $15. So, try something new these days that costs much less. It could actually be a fine wine concealed with a different label.

People have lamented to Clark over the years about how much home renovations cost. Last year alone, people spent $215 billion on home remodeling projects. The boom took off in the late 90s and hasn’t stopped since. But a number of factors have changed, and renovations are about to get a lot less expensive. People have gotten nervous about he values of houses, with the number of homes on the market rising dramatically. Plus, people who were making a living building new homes are suffering because those homes have stopped selling. So, the whole supply and demand has reversed. Now, contractors are looking for customers and sending notes, asking if people need any work. They are even showing up the next day to do work, and going above and beyond to get projects right. New homebuilders are becoming renovation and addition contractors, according to the New York Times. The result is that the cost of remodeling is declining. Materials cost less and people need work. So, margins are reduced. Just make sure you see thorough lists of jobs that the contractor has done in the last 18 months. If there is a gap in projects, ask why. There may be some people who didn’t like the contractor’s work. Also, make sure the contractor has insurance or you could wind up paying twice for the project. You want to talk to those folks and be choosy about who you hire. A good price doesn’t necessarily mean a good contractor.

If you’re renovating your home, you may have noticed that the cost has gone up a whole lot. That’s because building materials are so much more expensive. The price of copper pipe & tubing is up 71 percent; drywall is up 24 percent; asphalt singles – 20 percent; concrete – 12 percent. The only items that have gone down in price are lumber and plywood. The L.A. Times reports that people are changing the materials they use because they find out the price and they’re shocked. The good news is that the boom of home improvements is slowing down. It just takes a while for the drop in material prices to catch up. Next year may be the year of change. If you want to do an addition to your home in 2007, contractors will be hungrier for work and will offer you better prices. In addition, builder stock prices are under assault and building activity is likely going to slow, as well. That, too, will affect what has been a shortage in building supplies. With more supplies in the market, prices are likely to go down.

Clark has great news for you if you’ve been considering a renovation or improvement on your home. You are about to have much more negotiating power when renovating or adding on to your home. So, doing improvements is going to be a much better deal. For years, renovators and contractors have been too busy to handle all of the requests out there. Some would often fail to call back or offer services because they were so busy. And, because of the demand, prices were high. But that time is over. Aside from a tiny number of cities, home prices aren’t going up anymore, and borrowing against homes has decreased. So contractors and renovators aren’t as busy anymore, and it’s a great time to renovate. Just be careful. When you hire someone to do a renovation on your home, you’re stuck with them for a while. So, you must screen them thoroughly and check references. Talk to at least five people that have used a certain contractor. Also, if you have work done on a home you already own, be mindful of lien laws. You have to get a release from the contractor that says he or she will pay a subcontractor as part of the deal. If you don’t get a release and that doesn’t happen, supply companies and subcontractors can place liens on your house.

When it comes to renovations, what should you do? When should you renovate and when should you leave it alone? Well, first of all, you should do renovations solely because you want to. Renovations do not make you money. Even the most successful improvements cost more than the amount of value it will bring to your home. If you do a kitchen renovation, for example, you’ll recoup 92 percent of your money. Bathrooms, you’ll make back 90 cents on the dollar. Other areas, you will make back much less. But you shouldn’t do renovations to make money, so it shouldn’t matter.

Clark has always said he will accept lower quality for a lower price. The one exception for him is his house. If you buy a poorly built house, you buy nothing but problems over time. Clark thinks people should pay extra to make sure their homes are structurally sound and environmentally efficient. In recent years, people have started paying more – about three percent – to ensure that it does meet those standards. It’s still a new concept, though. Most people buy based on the monthly payment and that is all they consider. But it’s clear based on recent news that building homes to certain standards pays off. Compare Hurricane Andrew, which struck Florida in 1992, with Hurricane Charley, the hurricane that struck the same state just a few weeks ago. Florida upgraded its uniform building code about three years ago. And according to emergency management types, homes that had been built to the new standards sustained far less damage than did those that had not been built to the standards. Clark thinks government should provide some kind of role here. Yes, it will cost additional money. But over time, cities and counties will recoup the cost. Not to mention the amount of lives that could be saved. It took a lot of courage and hard work for the Florida legislature to overcome the power of the building lobby to set up standards for builders. But it has paid off and it’s benefited everyone.

Home equity line values are growing dramatically. The amount of money people are taking out has been steadily increasing. But as you take more money out, your net worth declines. As you borrow against the value of your home you have debt against your assets. So your worth declines. Home equity lines have become like ATM machines, meaning people just withdraw money whenever they want. There are circumstances when these loans are a good idea. For instance when you’re remodeling or redecorating. But paying back the money can get tough. And if you have a floating rate, the interest rate could jump all over the place. So, bigger banks are now offering you the chance to lock in the rate on your loan. The Wall Street Journal reports that Bank of America and Wells Fargo are a couple of the banks offering fixed rate home equity lines. They allow you to take a portion of the home equity line and fix the rate on it. If it convinces people to use these loans for their intended purpose – making home improvements – that’s great. But don’t use it to buy a boat, car or to take a vacation. If you get deeper in debt and are unable to make payments, the bank can take your house.

The television is filled with shows about renovating your house these days. Contractors are at work everywhere, it seems. Americans became “homebodies” after September 11, 2001, and that has led to some of the home renovation frenzy. But it can be a real hassle. Sometimes you have to move out of your home while the construction happens, and – if you don’t move out – it’s a lot to live with while the work is being done. The prices can get out of control, as well, especially if you let the project get out of control. So, keep the project small and keep it on schedule. If a contractor says a job will be finished by a certain date, make sure it happens. And add language into the contract that says what the contractor will do for you if the project runs long. Also, ask for the last 10 jobs done by the contractor, along with the start and end date. And call the people on the reference list. Ask them if the work was done on time, how it was handled and what - if anything – went wrong. Also, don’t think you’re doing the improvements to increase the value of your home. Research has shown that this doesn’t work. So, do it for aesthetic value because you will like living there.

People like the idea of doing home improvements or remodeling a certain area of their home because they think they’ll make money when it sells. But Clark is wary of this kind of thinking. According to Money Magazine, a no frills bathroom remodel will make you 87 percent of the money you spent on the project. A no frills kitchen remodel will get you an 80 percent return. In the best examples given, you end up with about the same return. So, you want to remodel your home because you will enjoy the results, not because it will make you money. Make it fun, too. That means having a clear plan with and idea of exactly how much it will cost and exactly what materials you’ll need. If you make back 80 to 90 percent on a home improvement and you get to enjoy it, then it’s really worth it in the end. A story in Smart Money magazine reports that an outdoor fireplace will cost you about $6,000. Media rooms, indoor hot tubs, personal spas, granite countertops and cathedral ceilings are also popular improvement ideas.