The Top 5 Current Myths about Major Home Improvements

1. Home Improvement Retail Chains Offer the Best Deals.
This one is huge and runs counter to the vast majority of homeowners. Indeed, the ability of retail stores, like Home Depot and Lowe's, to use their mass buying power does create some solid bargains for homeowners. What most people don't realize is that these stores also have a tendency to over-charge on installation and labor. Meanwhile, some independent contractors and interior designers may be receiving similar discounts without higher labor costs.

Don't believe it? HomeAdvisor, the largest online contractor referral service, tracks information on thousands of home improvement projects everyday. Time and time again, they hear from homeowners who thought these stores would offer the best deals, only to find out the exact opposite after the project was over?..

"Shop around for your product but go through an actual installer and not a large company like Home Depot or Lowe's. Although these companies are wonderful, the cost of installing is outrageous compared to going through the installers themselves." —Homeowner, Austin, TX, $900 Tile installation

"You can think you are getting a good deal at Home Depot or Lowe's when it comes to windows, but what I have puts those products to shame." —Homeowner, Minneapolis, MN, $13,000 window replacement

"Get far more estimates than I did. Thought I was getting a deal over at Home Depot but got screwed in the end." —Homeowner, Palm Bay, FL, $8,000 tile installation This wisdom applies only to larger home improvements, where you need a home improvement contractor to do the work. For DIYers, home improvement retail chains still have great deals on supplies and parts, and you can usually pick up a tip from a sales associate here and there. This is exactly what we heard from one Kansas City homeowner, who spent $500 on a sprinkler system repair, "Go to Home Depot and ask them for assistance in possibly doing the job yourself. Otherwise, be sure you ask about labor charges up front. $100 per hour is excessive."

2. Kitchen and Bathroom Remodels are Disappearing with the Housing Market.
Interestingly enough, this myth is a new one and runs counter to a previous misconception that remodeling essentially "paid for itself," in terms of added value. Sure, we're likely to see a temporary dip in major remodeling projects, especially for homeowners who need to seek some type of home loan from cash-strapped banks to finance these projects.

That said, the larger demographics of home remodeling will play a larger role in months and years ahead. The Joint Center for Housing Studies at Harvard University states that "several factors—including the recent underinvestment in portions of the owner-occupied and rental housing stock, as well as the long-term strength of the high-end improvement market—ensure a robust recovery in spending." This study goes on to say that, in 1995, major home improvements, including kitchen and bathroom remodels, accounted for just one in three dollars spent on home improvements. In 2005, that number had jumped to one in three. Plus, ask any respectable realtor out there, and they'll tell you that kitchens and bathrooms sell homes.

3. Solar Panels and Geothermal Heating Systems have Arrived.
Ask most HVAC contractors about solar panels or geothermal heating systems, and you're likely to get the same answer: It's not cost-effective. Some are even weary of homeowners who seem insistent about the potential for these heating systems to save the planet and have heard that they're more cost-effective than ever. It's true that the economic benefits of these systems have improved with favorable tax credits and the cost of oil, but it's still a hard case to make. Asked about solar panels and geothermal heating systems, a HVAC contractor who asked to remain anonymous said, "they're three times the cost to install and will take about 15-20 years to get your money back."

To be fair, if you live in an area with a) high heating costs, b) a utility company willing to pay a good price for your energy surplus, and c) strong federal, state, and local tax credits for these energy-efficient heating systems, you're likely to stay on the shorter end of this rate of return. Keep in mind, however, that dramatically lower heating costs and tax credits are also benefits of conventional heating systems with some of the highest efficiency ratings. Worse yet, the contractor indicated that "the cost of these systems isn't likely to come down in the next few years." Unlike computers and cell phones, the engineering cost of solar panels and geothermal wells are relatively fixed.

4. Vinyl Siding is the most Cost-Effective Siding Material.
This one is visible in many cities and neighbors across the country, as vinyl siding is unquestionably the most popular siding material. In terms of cost-effectiveness, it may be the best, it may not. Fiber-cement siding definitively outperforms basic vinyl siding, generally outperforms high-end vinyl siding. It costs approximately 20-30 percent more than basic vinyl siding and negligibly more than high-end vinyl. According to Remodeling Magazine's Cost vs. Value Report 2007, the average rate of return for fiber-cement siding is 5-8 percent higher than vinyl. Does this necessarily make it more cost-effective in terms of homeowners' pocketbooks? No, but between this and climatic factors causing premature fading and weakness in cheaper forms of vinyl siding, it should give many a moment's pause.

The same 2007 report has tells us that along in the south central region of the U.S. and along the Pacific Coast these return rates jump between 10-20 percent. Moreover, a house with fiber-cement siding in a neighborhood full of bland vinyl siding will stand out, especially in upcoming years when the housing market has a chance to recover. Nothing is going to knock vinyl siding off its well-deserved perch, but the perception that vinyl is the only answer for homeowners who want financial value from their siding, simply isn't true, anymore.

5. Home Inspections are only for Buying or Selling a Home.
Home inspections are mandatory for anyone who wants to responsibly sell or buy a home, but this is far from their own use. Most homeowners are surprised to find out how many potential problems lie beneath the surface of their home, and how many can be identified by a qualified home inspector. Often, they'll be able to catch harmful movement in your foundation, mold lingering behind your walls, creases between roofing shingles, loosening roofing fasteners, dangerous fireplace chimneys, and indoor air pollution, to name a few. In almost every case, fixing minor problems now prevents having to fix major problems later; instead of spending several thousands of dollars, you can remedy the situation with a couple hundred.

Do you need to have a complete home inspection every year, the same way professional roofers recommend getting an annual roof inspection? Probably not, though it wouldn't be a horrible idea. If you own a home that's older than ten years—when homes can begin to experience their first signs of significant wear—and you haven't had an inspection done in a while, this might just be the best thing you could do for your home. These inspections should include full written documentation and a consultation that helps you identify home maintenance that needs to be completed in the upcoming years.