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Home Building: 8 Ways to Follow Your Budget

Inevitably, any new customer will ask me “How much does the project price?” The answer is not always simple and easy. You see, a house construction funding, from both its creation and its maintenance, is more art than science.

Sure, it’s easy to say the job is a brand new 2,000-square-foot house that’ll cost $200 per square foot to build. But what does that represent? Will it be? Does it factor in each of the intangibles and idiosyncrasies that any home building project has? And you can certainly ignore any cost-per-square-foot guideline if it is an addition or remodeling job. Addressing an current house, particularly one that is a little old, has its own set of principles.

Having said this, the ideal approach to identifying prices for your unique job and place is to talk with several architects, builders and designers. Each will probably give you a different “amount,” so you are going to have to drill down to the detail of exactly what that number means. Just do not forget that the devil is in the details.

Michael Abrams Limited

1. Identify the job. Will it be a new house, an addition to your current house, a kitchen or bath remodel or even any mixture of them? Each has its own budgeting technique. While a simple “per square foot” cost may work for a new building project, it definitely will not work for kitchen and bathroom remodels. And for something like an addition or renovation into a historical home, toss out any sort of price guidelines. The very best approach to establishing a funding for jobs like these is to talk to professionals with expertise.

LaRue Architects

2. Identify the pieces inside your budget. Clients frequently don’t recognize each of the pieces of the budget. Sure, the largest piece might be the building costs, but there will be many different costs. They could include land costs, legal fees, moving, decorating, landscaping, impact fees, architectural fees, allow costs and financing costs. At the outset, identify all of your potential costs and assign each a value. It might be a shame to complete the house but have no money left for furniture or landscaping.

Garrison Hullinger Interior Design Inc..

3. Know thyself. If you merely have to get that beautiful range that costs up to a brand new luxury car, don’t budget for the generic range from the local appliance shop. Think about what you really want and how you really want to use the house you’re creating, and make sure you’ve budgeted for it.

LLC, Jason Ball Interiors

4. Expect to splurge. In the budget, allow for the few places where you’ll want to splurge. For example, the kitchen backsplash is a location you may want to do something truly unique and remarkable. If you spend a great deal of time at the kitchen, the backsplash is something you’ll see a few times a day for many years. Even though it costs a significant amount, allow yourself to splurge a little on something you’ll enjoy.

The Collins Group/JDP Design

5. Have a Strategy. A sure way of breaking up your budget is to reevaluate decisions, as they say in Washington, “kick the can down the road.” Construction has started and you have not made nearly enough decisions concerning what tile, what pipes fixtures, what trim, etc.. The builder starts pressuring you to make decisions, worse, simply does something without your input. You may end up tearing out work or, worse, have to live with something that you really don’t enjoy since you don’t have time or money to alter it.

The best way to prevent these nightmare scenarios is to get your architect and/or designer prepare a comprehensive set of drawings and make all of your decisions before starting construction. Then, don’t alter your mind. It’s easier said than done, but preparing a plan and sticking to it is the very best way to keep on track.

Wm. F. Holland/Architect

6. Have a contingency. Like other laws of nature, the regulation of a building job is that “stuff happens.” It might be an issue with the bearing capacity of the soil or uncovering rotted wood when getting ready to build the addition. The very best way to manage the unknown is to allow for a contingency in the budget.

The ideal approach is to start with a greater contingency, say 15% to 20% and then slowly decrease the contingency as you go throughout the job phases. When you first start the plan, you’ll have a line item in your budget for a, say, 20% contingency. After the drawings are done along with the pieces of the job are identified you might lessen the contingency to 10%. As you you go through structure, you’ll be able to decrease the contingency much more so that when building is complete the contingency is zero.

You don’t have to spend that contingency. If it is not used, think about it found money that you may save. That is a wonderful way to feel great about staying on course and coming in under budget.

Lewis Aquatech

7. Beware scope creep. A sure way to break your budget is the dreaded “While we are it we may as well … ” You may justify it by saying “it’ll only be a few hundred dollars,” but once you do this a few times, you’ll have added a bunch of work and will definitely blow your budget. Remember that you chose and stay determined to adhere with it.

Bud Dietrich, AIA

8. Consider tradeoffs. Sometimes it is difficult, if not impossible, to pass by that truly remarkable item that you find during the job that is not in the budget. While this happens, have a look at your budget and what you have left to accomplish, with the goal of reducing the price of something else to pay for this new find. Is there a part of the job, like painting a few rooms, so you can perform yourself? Maybe you can use carpet in lieu of hardwood at the guest bedroom. Get exactly what you would like and remain on track by moving budgeted amounts from one pocket into another.

Follow a Ranch Home Remodel from Start to FInish

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