Monday April 23, 2018
Controlling Project Costs
A new custom home is a partnership between the homeowner and the builder
This blog post was inspired by a post by Castle Homes of Brentwood, TN
Successfully managing a home construction budget requires a partnership between the builder and the homeowners.
Controlling costs is a responsibility that a professional builder takes very seriously. We understand that your overall satisfaction requires that there are no budget surprises. Cost-control strategies that we employ include value-engineering the structure, writing clear product and trade specifications, and managing the construction in the most efficient manner possible.
But the builder is just half the equation: a new home is a partnership between the builder and owner, and there are things the owner needs to do to keep the project on budget. Most of these have to do with decision-making.
Homeowners usually understand the importance of making timely decisions and minimizing changes once the project starts but may lack a framework for making those decisions. The following concepts are essential if your project is to be on time and on budget.
- Complete the creative process before breaking ground.
Many people have difficulty imagining how a finished space will look, so they postpone some design decisions until after the house has been framed. Unfortunately, this can mean reframing certain spaces. Building something twice costs at least twice as much as building it once. If you have trouble envisioning spaces let us know early in the design process. Great tools like 3D design software and physical models are available to help you get a better grasp on how your completed rooms will look and feel.
- Choose as many products as possible before work starts.
Changes always add cost, even if the substitute products are comparably priced. For example, choosing a different tub for the master bath could involve administrative charges for ordering the new tub, canceling the original order, or returning the original tub. The change could also delay the drywall while the builder waits for the new tub to arrive. That could easily throw off the rest of the construction schedule.
- Understand that every item has a cost.
Unless you build homes for a living it is difficult to appreciate the web of interconnections between seemingly unrelated elements of the new home. Clients are often surprised by the cascading effect that one “small change” can have on other construction elements, and on the construction schedule. We are happy to explain these cost drivers, but we can’t make them go away.
- Embrace multiple choices.
Rather than settling on a particular product, we can help you select good, better, and best options for most product category. If the budget numbers start growing, it may help to substitute that top-of-the-line appliance package for something less expensive that still works with the rest of the decor. Defining these options ahead of time makes the process a lot more efficient.
- Leave plenty of lead time.
One of the most common friction points between a custom builder and the homeowner revolves around the owner’s inability to make timely selection decisions. From the owner’s perspective it often doesn’t make sense that they would need to select an item weeks or even months before they will be installed.
Experience has taught us that the more time between the product selections and when those products will be installed, the better. That way, an unexpected delay from the product distributor or shipment of the wrong product, or a defective product won’t hold up the job. Also, we know that correct framing and mechanical rough-ins often require that selections be made many weeks in advance.
The ability to efficiently procure, inspect and plan for the installation of selected items makes all the difference between a project that runs smoothly (on time and on budget) vs. a job that is over budget and behind schedule. When the project goes off schedule, unbudgeted costs begin to pile up. Time is money when it comes to the project schedule and budget.
The above guidelines provide a proven framework for controlling project costs. Following them will reduce stress and help ensure a more satisfying project.