Builders of custom homes often quote a 20-month completion timeline, only to deliver the finished product in 24 months. Similarly, they may estimate the price of a custom home at $450,000 only to end up building a $520,000 house. A new study reveals that 68% of such projects are completed in more than three months. And they come in at least 15% over budget.
Look at past performance. If the builder has performed well on similar-sized projects with similar scope and specifications, it is likely that they will perform well on your project.
You’ll notice that successful builders have systems in place to ensure that a quality home is completed on time. Professional builders create a detailed construction schedule and utilize construction management software and other resources to efficiently track your home’s construction progress and coordinate with the rest of the project team. Systems like these keep the building process moving and provide you with timely progress reports along the way.
Get the names and phone numbers of several past clients and ask hard-hitting questions during the interview. Find out what their experience was with the proposed builder regarding the completion date of the home and whether the home was built within budget. Most Harrison County OH home builders have completed several homes in the area and have information on all of the homes they have completed building. The numbers are there!
Lock in Material Specifications and Pricing Early
Prices of building materials account for about 30% of the cost overruns on single-family home construction. Selecting building finishes, appliances, and products requires brutal precision. Each product or building material selected for the home must be clearly described in writing, including the manufacturer’s model number, color or finish, and a detailed scope of work for the installation. A simple phrase such as “granite countertops” or “hardwood floors” can trigger huge problems and many costly overruns. Home buyers must incorporate these cost considerations into their purchase agreement and negotiate with the seller to increase the purchase price for the home by no more than a fixed percentage because of materials price increases.
Establish Clear Change Order Protocols
Change orders are infamous budget busters on out-of-control remodeling projects. Many professional builders have a systematic approach to handling changes to the scope of work on a project, including a formal change order process, and most include a detailed scope of work, an estimate of the costs to complete the work, and an assessment of the potential impact on the completion date of the project.
Establish a robust change order management system that clearly outlines the labor, material, and scope impacts on the overall project timeline. By implementing this process, projects on average reduce the chance of overspending by 40%.
Monitor Progress Through Regular Site Inspections
I am a strong believer that the best way to detect trouble is to show up at the job site regularly. This is especially true for homeowners, and I think that they should make it a point to regularly inspect for quality issues, deliveries, proper management, and scheduling of all of the subcontractors involved in the project.
It is important to understand the construction sequence as early as possible to recognize potential delays as the project progresses. For example, electrical rough-in and completion must be done before insulation, and all plumbing inspections must be completed prior to drywall installation. A professional builder and developer can be invaluable, and we encourage them to join the Tenison | Real Estate staff for daily site inspections. Any additional observations or concerns are also welcome. Inspections will take place around key project milestones, and all progress will be documented with photos in the interim.
Address Weather and Seasonal Considerations
Weather-induced delays occur on 85% of construction projects. The smart builder creates realistic schedules in advance of construction, allowing for the normal seasonal variations. Additionally, some contingency is built into the plan to allow for the time difference between the occurrence of a weather-sensitive event and the manifestation of its effects. For example, the smart builder may lay the roof on a new single-family home in the autumn and winter months, and delay the interior finishing until the following spring or even summer. Alternatively, the foundation work could be scheduled for the spring and early summer, completed before the late summer/autumn wet weather, while the exterior finishing, such as stucco or brickwork, would be started in late summer/early autumn.
Maintain Realistic Contingency Planning
No project ever comes “on time and on budget,” as contingency sums and time are built into the initial quotes. There is general agreement within the industry that a 10 to 15% contingency on the build budget for custom building projects is reasonable. If the scope of the works changes, then the build budget may need to increase. Projects with innovative details or complexities may also require a 15% contingency or more. Once all quotes have been received, owners and builders need to discuss contingencies. The owner must then make an informed decision about how to utilise any contingencies for the project.
These contingencies are in place to mitigate risks to the project not accounted for in the original scope of work. These are not intended to account for scope creep but to handle unknown risks, such as encountering rock during excavation, unforeseen conflicts with embedded utilities, or an unforeseen delay in the acquisition of required permits. Effective management of these contingencies is dependent on accurate tracking of remaining balances on contract and effective communication as needs become apparent.
Verify Permit and Inspection Scheduling
Municipal delays due to the approval process are anticipated by some professional builders. Efficient builders are ahead of the building process by being very communicative with the local building department and knowing the typical timeline for approvals. As a result, they apply for the building permits needed ahead of time and schedule the appropriate inspections between construction phases.
Building a house is about finishing a project in a timely and cost-effective manner. It is the job of a great builder to plan, communicate, and meet the commitments that he makes. See more