You probably ended up reading this post because you are dreaming of doing a home project and are finding out the construction cost is over your budget. This is common. Almost every construction project goes over budget. Let’s learn about why that is common and what you can do about it.
Most people who want to save money on building their home commonly expect to save money by doing these four things: 1. Doing their own demolition. 2. Phasing the project. 3. Doing the painting themselves. 4. Being their own general contractor.
I can almost guarantee that none of these things will actually save you money. You can either believe me and skip to the part below that does describe how to save money, or you can take a “written ass-whooping” and read about why these won’t save you money:)
Demolition:
Doing your own demo work will not save you money during construction. When you start taking apart your house, you soon realize that you aren’t as tough as you thought. You tear into drywall, and you try taking a sledgehammer to lumber while wearing your “work clothes” thinking you deserve a merit badge when you’re done. You’ll probably even hurt yourself. Maybe a minor cut, or something that requires a trip to urgent care. Either way, the end result will not be what the builder (who has to come in and work after you) really needs. You will leave rough edges, exposed nails, incomplete areas, and disarrayed scrap piles that the builder will need to clean up. When an experienced builder does demo, they actually have a plan, and the plan is not just: tear shit up. They strategically dismantle certain parts and carefully store them, so they can be reused again. In other areas, they pull apart materials in a way that keeps them whole - which enables the cleanup to be easier and dump runs to be faster as they strategically sort the debris, glass, recyclables, etc as they go. More and more, this sorting is actually required to be documented by building departments for their sustainability initiatives. In areas where new construction must tie into old construction, pro builders know how to make the cuts, so it will be easier to tie things together later. There is a true method to the organized chaos. Also, these guys are tough as nails. They can work proficiently without complaining in a wet, cold, dusty, dirty environment as you are riding high in your warm office clicking away with a nice cup of coffee at arm’s length. You will barely last through the demo while these guys can do it without being phased. These guys will also do it in a fraction of the time. When you try to take on your own demo, they will spend more time fixing your mess, and this will cost you extra money.
Phasing:
When you get your bids back from builders, you will see that the scope of work you want is over your budget. The first thing most people think is to just do it in phases to reduce the cost. This is a fallacy. One of the major costs in construction is mobilization. This is the time it takes for a builder to setup the jobsite by doing things such as: erecting scaffolding, ordering materials and deliveries, transporting and setting up tools, setting up temporary water and power, creating a jobsite office area for reviewing plans, and getting their crew up to speed on what needs done. After the job, all this happens in reverse. The cost just to get on the jobsite is major. It is not as simple as opening up a laptop. Think about how long it would take to setup a table saw, miter saw, saw horses, arrange the lumber, etc. This is all before the work even starts. By phasing a project, you incur the cost of mobilization more than once. This also causes recently completed work to be redone when the next phase needs to tie together with the previous work. This is very inefficient. Take the drywaller for example. The drywaller comes one day to hang the wall board. They come another day to mud and tape the seams. They come another day to sand it all. Then they come another day to do more mudding and sanding. Then they come back and sand it again and clean up. Then they spray primer on it to be ready for paint. If you call a drywaller more than once, you are paying for all these steps more than once. This will cost much much more - and that’s just one example.
Painting:
We have all painted our college dorm or childhood room, and we all did an OK-enough job at it. Well, not really. You painted a door frame that already had 20 layers of drippy paint on it, so you really just did the best you could and moved on. When you hire a painter, they need to do a professional job that everyone expects. The painting is actually a very small part of their job. They should really be called sanders instead of painters. They spend most of their time sanding, caulking, sanding, filling, sanding, taping, sanding, and masking. After all that is done, then they finally paint. Pro painters are really good at what they do. They don’t leave drips. They don’t get paint on the ceiling or trim when they are painting the edge of the wall. They are precise, they use good equipment, and they understand the effects of humidity, temperature, and even the brand of paint. They are very fast at it too, and they don’t leave with drops and globs of paint scattered throughout your house. These pros have respect for the builders who did the work before them, and they understand that their work is the top layer that everyone sees - so they treat their work accordingly. You wouldn’t go to a fancy steakhouse and put catsup on your steak, so don’t get a nicely built house and ruin it by doing your own painting. You will mess up the craftsmanship and make it harder (and more expensive) for the real painter to fix.
Being your own general contractor:
People commonly think they can “run their own subs” to save money. How hard can it be to call up a plumber and say: come install 2 toilets, 3 sinks, and a tub. Well, we all wish it were that easy. The plumber needs to have the framing in exactly the right place to coordinate with the exact model of plumbing fixtures that you’re going to use, and the work of the plumber must also later coordinate with the tradesmen that will come in next. When you haven’t worked as a general contractor on several prior projects, you don’t know how to get everything setup properly. You don’t know how to set expectations for the plumber or the framer who built the work for the plumber to follow. You don’t know how to setup a contract, you don’t know what prices are reasonable, and you don’t know how to solve the problems that will come up with scheduling, budgeting, lead time issues, and coordinating everyone. One mis-step, and you’ll be calling your plumber (and framer) out more than once. This leads to more mobilization, and as discussed earlier, this leads to more cost. Don’t think you can do the job better than someone who has made a career out of learning from their mistakes and assembling the best bunch of tradesmen they can. You would be starting from scratch, and you will be making tons of costly mistakes. Leave this to the pros. The 10% you might save won’t happen. You’ll spend at least 20% more.
HERE’S HOW TO ACTUALLY SAVE MONEY:
The best ways to save money during construction are to not make any changes, keep your scope of work reasonable, and trust your builder while keeping the architect involved through the whole construction process.
Don’t make changes:
When you change your mind during construction, your builder is literally changing horses in the middle of the race. The workflow stops. Subcontractors experience delays and go to other projects (sometimes they charge liquidated damages). The work that was completed may need to be unbuilt. When you finally make up your mind, the builder provides pricing for the new work, and that includes the cost of re-mobilization. Often times, the reason for the change is to try and save money by simplifying something, but it is common that the stop in work actually causes the price to get higher. Also, when you make a change from the original design and original contract sum, not only is it harder for the builder to re-coordinate everything, but that builder also knows that THEY are YOUR builder and nobody else is going to come do the work. So they can really charge whatever they want to do the work. You are stuck with them. Your best bet is not to change the work and just enable the builder to stick to the original bid.
Smaller scope of work:
People often want what they can’t afford. We see stuff on TV and in magazines, and we want it. We don’t realize what it all costs, but we think it might be within reach and keep piling on more and more scope onto the project. Let’s be real. The projects you see in magazines are built by people where money is no object. Those are multi-million dollar projects with no budget usually. Also, the stuff you see on HGTV is not real. It’s not even close. Don’t believe what you see. The best thing to do is to reduce your scope. You can’t have it all. Keep your project small and remove the complexity and expensive items. There’s plenty of room to go over budget during construction, so during the design process, keep it simple. Don’t go overboard. Allow at least a 20% contingency for the what-ifs that happen during construction. I know… you might be thinking, “this doesn’t apply to me because my my spouse and I have great, full-time, high-paying jobs, so we can afford the stuff we see in magazines.” Dual income families grossing half a million per year typically cannot afford the stuff you see in magazines unless there is some other revenue source. Those are the upper 0.1% - not the 1%. Construction is REALLY expensive, so keep it small and simple.
Trust your professionals:
Believe it or not, your architect and builder are likely very very experienced. They build projects all the time. They actually get paid to help people do it! When they recommend something, take their opinion into very strong consideration. You are part of a team with them, but your contribution to the team is really not so much about your knowledge - it is more about being realistic about your goals and being prepared to pay for them. Listen to your builder’s advice on ways of building things, and follow your architect’s advice on creative things to build and ways of solving problems. Your architect has a big picture view with an expansive knowledge of ideas that you would have never considered. This is actually what you are paying an architect to do. When there’s a problem to be solved with budgets, design options, arguments, timelines, permitting, etc, your architect is the most likely person to solve those problems, and this will save you money.
In summary, be realistic about what you will build, don’t change your mind once the realistic budget is set, and trust your architect. If you do these things, you have the best chance of having a successful project.
If you’d like to learn more about our design process, visit www.josharch.com/process, and if you’d like to get us started on your project with a feasibility report, please visit www.josharch.com/help