HIDDEN COSTS IN CONSTRUCTION WHEN BUILDING A HOME

Construction projects often come with a variety of hidden costs. These construction cost could be a result of incomplete designs, lack of specifications, plan changes and unrealistic project planning to name a few. To avoid these hidden costs, the client should communicate with the Principal Agent to ensure a full understanding of the building process.

Choose a design professional:
To create a plan and detailed scope of work, a homeowner should hire and architect. Using a subpar or cheap draftsman can cost a client dearly in the end. Most inexperienced drafters do not know how to design within the client’s budget. Due to this inexperience or omissions based on partial knowledge of codes, the client could be over their budget even before the project gets to the construction phase. Meeting with a reputable, experienced architect to go over design and discussing what needs to be included in the design and what pitfalls to look out for, can help curtail this expense.

Lack of specifications on the design drawings:
Building plans should have certain material specifications on the drawings. The building plans created by an architect should specify a particular manufacturer for certain materials when there are cheaper alternatives. For instance, a certain brand of basin may be specified to go in the bathroom because it falls within a certain budget. A way to mitigate this kind of cost is to have an ‘approve/equal’ clause on drawings/specifications to ensure you’re not overspending unnecessarily. To not specify this item will leave the drawings open for interpretation and the contractor may source a more expensive unit which will add to the cost of the project. It’s important to discuss this with your architect before accepting the final plans to make sure your budget is met.

Council fees and permits:
The architect should inform the client beforehand on what invoices are to be expected from the local council on processing their building plans. A scrutiny fee is applicable for each building plan submission and is payable by the client.

The professional team:
Appointment of a professional team is another hidden cost item that the client should discuss with their appointed architect. The architect should confirm to the client if the following team members should be present on their projects: Engineer, Quantity surveyor, land surveyor, landscaper, mechanical engineer etc. These disciplines have their own professional fees which should be included in the overall project budget.

Interviewing contractors:

Contractors are frequently brought into the process once a sketch plan design has been finalised. The sketch plan layouts should at least include what the home will look from the outside, a dimensioned floor plan and some preliminary material selections. With this much information, it is possible for the contractor to provide the client with a preliminary estimate of cost.

Contractors are often asked to estimate the sketch plan design as part of the interview process. It may take a couple of weeks to set up the interviews and generally at least two to three weeks after interviews to receive the estimates. Altogether it could take four to six weeks to interview candidates and receive estimates. After that you may want to call references, visit jobsites or do additional research before making a decision about the contractor you will hire.

Completion time:
When trying to move too quickly to meet an unrealistic deadline, quality work is at risk. It may end up costing you more in the end when trying to speed up a completion date. In order to alleviate this unnecessary cost, allow more time for a project to be finished and ensure more quality work, with a smaller chance of driving up costs.

These are not all of the costs that can come as a surprise during the construction process, but are perhaps the most common. The most important thing you can do to lessen the probability of these costs is to communicate with your contractor regularly.

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