We have all heard horror stories from friends about their building experiences, especially when it comes to the budget. Somehow everyone seems to end up spending way above what they had anticipated.
Why does it always cost us more?
The most common mistake people make when initially pricing their project is that they begin by asking a contractor to provide a quote. Why is this wrong?
A. Without detailed plans, it is not clear what the quote actually includes. Did you know that you will need to move the plumbing? Did you specify the number of electric points and how many meters of molding? You may find yourself adding money to the project as it moves ahead due to all those things that were unaccounted for in the original pricing. This also makes it impossible to compare two different quotes; are you comparing apples and apples or, more likely, apples and oranges?
B. The contractor's quote includes his work only. There is an entire list of items that are not within his job description, such as: gardening, carpentry, kitchen appliances, hookup to the electric company, light fixtures, window treatments, furniture, consultants' fees and so much more. All these additions could add up to a sizeable amount.
Let's do it right!
1. Start off by consulting with a planning professional – either a designer or an architect. A designer will be able to give you an idea of the project scope and of what it would entail to bring your house to the final state you are envisioning. The designer escorts a project from the most preliminary stages (sometimes even prior to purchasing the house) until the last picture is hanging on the wall. Therefore, she is the one that has the full picture, encompassing all the stages and costs involved.
2. The next step is to start preparing actual plans. Once your plans are set, make a detailed list of everything you expect to be included in the job (even clean up at the end). Now you are ready to call in a contractor.
Tip: Always prefer to price more work than less. Break up the plans into several paragraphs and request detailed pricing for each. That enables you to examine your priorities. If need be, you can go back to the drawing board and adjust the final plans to meet your budget.
3. Make a list of all the items that are not included in the contractor's quote and estimate their costs. Choose your floor tiles, price your kitchen and carpentry, and so on. Ideally, make many of your choices in advance so that you can get exact pricing and not just rough estimates.
⇒Planning ahead allows you to determine your priorities while your money is still in your hands. When starting the project, your pockets are full and you tend to be more generous with your choices and upgrades. As the money starts running out, you may find yourself compromising on things that were actually more important to you.
⇒Even the unexpected can be planned for. Include a 20% deviation in your budget. This number is built on vast experience. It may seem like a lot, but better to have set it aside than to find yourself in debt.
I'm going to let you in on a secret: I have worked with budgets ranging from the thousands to the millions. Regardless of the amount, the budget always feels limited. Therefore, setting priorities in the construction of your home (and in life in general!) is the most important step. With the correct priorities and good planning, your dream home is not far away …
If you've been following these posts carefully you must have noticed that this topic has been discussed already. Unfortunately, people renovating do research on many topics and yet are unaware of what I wrote above. This issue seems to be the most common cause of aggravation and unsuccessful renovating projects. We'll go back to the fun stuff soon but PLEASE, if you have friends renovating – do them a favor and share these tips too…