One of the most common fears of remodeling is a project snowballing out of control.
It is true that when remodeling there will always be unforeseen items that will impact the budget. Most situations can be anticipated by working with architects and contractors experienced in the remodeling process, but surprises can be lurking behind Sheetrock or plaster. Factoring a contingency fund into your budget (we recommend 5 percent to 10 percent of your projected project cost as a reasonable amount) is critical to minimize stress during the construction stage. If all goes well, these funds can be used for the last phases of your project (window coverings, furniture, landscaping, etc.), which often fall by the wayside if the budget is completely depleted at the end of construction.
So why do people run out of money before they run out of project? A remodeling project snowballs for several different reasons.
The first reason is the homeowner gets a case of the “while we are at its.” It obviously changes the dynamic of the budget when what starts out as a simple kitchen remodel turns into a whole house overhaul. While it is tempting to move into different parts of the house “while you are at it,” each decision needs to be made in light of your total project budget. Unless money is no object, funds spent up front are consequently not available later on in the process.
Planning really does pay off. The more specific you are in what you want in the planning and design phase, the more accurate your drawings (and therefore your bid) will be and the more efficiently the work can be completed. Your contractor plans the sequence of your project. He schedules sub-contractors to come in at specific times to do their portion of the work. If you decide you want an additional light fixture after the electrician has wired the rest of the project, it is going to cost you more money for that light, as well as more time to complete the project.
The attitude of “we’ll just figure it out as we go along” is a sure recipe for snowballing and will undoubtedly cost you both time and money. Incomplete drawings leave holes in the plans that will lead to costly change orders. It is not uncommon to hear of situations where homeowners bid their project without complete drawings and specifications, with the consequence of tens of thousands of dollars in change orders appearing before the project ends.
Sometimes a project snowballs through no fault of the homeowner. There are times a contractor underestimates the bid, so when the work actually begins, the real cost of the project is considerably more than the original bid. This can be avoided by carefully selecting a contractor well-experienced in residential remodeling. However, even good contractors can sometimes miss the mark on an estimate. Architects, or other project consultants, offer bid review services. Having a professional help you review and compare contractor bids can help you save money and avoid accepting bids that don’t reflect the true cost of the work. While a low bid can be enticing, it helps to look at the bigger picture. One client wanted to proceed with a bid that seemed attractive until we identified $30,000 worth of work missing from the bid, which would not have been such a bargain in the long run.
Many contractors these days prefer to work with a project model called design-build, rather than the traditional design-bid-build model described above. This means that instead of waiting until the construction drawings are complete and then soliciting bids from two or three contractors, the homeowner interviews contractors up front — beginning the process while the architect is still working on schematic designs. The contractor is not selected on the basis of the bid for the work, but rather on such items as his company structure and approach to a job, his experience with similar project types, references and a general overall markup.
This markup will be applied to all subcontractor costs, and the whole process is open to the homeowner’s review and scrutiny. The contractor then joins the design team and provides an estimate when the master plan is created. This is usually followed by value engineering, which is the process of matching the design to the desired budget. (As you can probably guess, this involves some redesign as the budget is inevitably smaller than the design wish list!)
The goal here is to recognize this discrepancy before thousands of dollars are spent on construction documents, thus avoiding the cost in time and money to revise drawings at the end of the design-bid-build process when the contractors’ bids come in too high. This process provides much better control of the project budget and is most valuable when trying to keep the project from snowballing.
Overall, planning ahead and working with professionals to help you anticipate the true cost of what you want will help you to avoid a project getting away from you.
Most people underestimate what their project will cost to build. Sitting down with an architect at the beginning of your project and talking real numbers may be a little disappointing when you find out the reality of the cost to remodel, but facing reality is crucial in the remodeling process. Many homeowners find that what they want to do to their house is not in line with what they can afford or with what makes sense in terms of investing in their home or neighborhood.
The good news is that architects are able to see your house and situation from a different perspective and can come up with design alternatives. Even if you can’t do what you originally wanted to do with your house, an architect can help you design something great that fits into your budget and will change your life for the better.