If you’ve talked with family and friends about wanting to build a home on your land or lot, you’ve probably heard some stories. Unfortunately, when it comes to new construction, everyone seems to have a home building horror story about a terrible experience with a builder. And the two most common horror stories involve time and money. In other words, somebody always knows somebody whose home build went over budget and/or took longer than expected. So, how can you avoid a home building horror story? Well, in our professional opinion, this comes down to good planning and realistic expectations.
How to avoid the “way over budget” home building horror story
Whenever I hear the “way over budget” horror story, I wonder about three things:
- Was the budget set too low in the initial bid?
- Were there unexpected circumstances that forced the build to go over budget?
- Were changes and/or additions made that caused the build to go over budget?
First, let’s talk about the bidding process that should take place before you begin building. There are so many factors that must be considered when bidding a custom home. From land prep to utilities to what hardwoods, tile, brick, and faucets you choose… There are literally hundreds of items to discuss when establishing a budget. In fact, we have written over a dozen blogs about the cost to build a house. For links to those articles, click here.
Even when a realistic budget is established prior to building, unexpected circumstances can occur that force certain line items to go over budget. For example, tariffs may cause the price of lumber, cabinets, and other materials to increase in price. A hurricane may cause a shortage of certain materials, again increasing prices. Or a company may stop carrying a product, requiring a new (and possibly more expensive) choice to be made.
Sometimes, an overage on a line item can be “made up” during another portion of the build. This, however, requires commitment from both the builder and the homeowner.
As for changes and/or additions that cause a build to go over budget… Let’s just say, we strongly encourage our clients to avoid making changes once the budget is set. Read our article, “The Price of Change Orders” for more information about that.
How to avoid the “took longer than expected” home building horror story
First, I use the word “expected” for a reason. Who expected the house to be done by Thanksgiving or Christmas or the first day of school? The client? The builder? As I stated at the beginning, realistic expectations are necessary.
So, when I hear the “took longer than expected” horror story, I again wonder…
- Was the initial timeline too short from the beginning?
- Were there unexpected circumstances that forced the build to take longer?
- Were changes and/or additions made that caused the build to take longer?
We tell clients that we hope to have their home built within six months; however, they should expect it to take nine months. Why? Because we know that “unexpected circumstances” are bound to happen. It rains for two solid weeks, which means no outside work can be completed. The temperatures stay below freezing, so concrete can’t be poured. A natural disaster in another part of the country causes delays with shipping materials. You get the point. These issues are nobody’s fault. But both the client and the builder should factor in time for “the unexpected.”
As a client, you can help the schedule by making selections in a timely manner and not changing your mind mid-build. Because, truthfully, the price of change orders is about more than money. Change orders cost time, too.
Don’t give up on your dream home!
Don’t give up on building your dream home because a home building horror story might happen. Hopefully, we’ve shown that there are usually legitimate reasons why the over-budget and took longer stories happen. In other words, knowledge goes a long way in helping to avoid a horror story situation. So, do some research and hire a qualified design build professional who can help you through the home building process.
Ready to start your research?
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You might also be interested in this discussion on Houzz, which explores “What did you go over budget on and why?” Click here to read.
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