Custom Homes: Managing Cost Overruns

Cost overruns refer to the situation when you overshoot your budget due to unexpected expenses for home additions, constructions and renovations

. This is not an uncommon occurrence as 90% of projects tend to exceed their original budgets, said the Journal of the American Planning Association. Particularly when building a home that takes several months to finish, price fluctuations of construction materials will drive up the costs from the original quotation when you first made your inquiries from hardware companies. Fortunately, there are ways to manage the overruns.

Wrong estimate

The wrong estimate can be a result of inexperience, lack of information and complacency. The most common mistake is to take on a project using the DIY method, thinking that you will ultimately save money if you dont hire general contractors in Toronto to handle the construction, renovation or any other home improvement.

But theres the thing: an experienced home builder will double- and triple-check the estimates according to the real costs of materials. And you can actually save on the costs because contractors generally have suppliers and contacts where they can get special discounts. Another danger of DIY method is failing to take into account the topographical characteristics of the land where the house will be built. If the land expands when it rains, your house might sustain irreparable damage.

Missing tools, unaccounted equipment

Supervising the construction process on your own will be very difficult without prior experience. Poor monitoring and record keeping can result to tools being stolen or equipment being lost. This could prove to be costly for you because you cant hold any worker accountable for the missing tools without proper evidence.

In contrast, General contractor in Toronto only hire people they worked with previously and trust. That means you dont have to take time off work in order to go on site every day. Your only concern is the finished product when your home is delivered and turned over to you.

Modifications to original plans

The blueprint is just a guide for both the contractor and the client. Any modification that has not been discussed should be the liability of the contractor. Typically, the contractor will issue a field order for the client to read before proceeding with the changes. In the same vein, the client can also ask for some changes during the construction process. This is called the change order. Both process will cause cost overruns and can be avoided by regular meetings and consultations between the client and contractor. Remember, any changes will result to delays and push back the target project completion. Make sure to meet with the builder of custom homes regularly to apprise yourself of the changes in the original design.

by: Antonia Clarck

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