Building a New Home: How to Control Costs

A successfully managed budget is a partnership between the builder and client.

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A green home project comes in on time AND on budget when the builder and client work together to control costs.

Professional builders work hard to control costs, thus ensuring clients get the home they want — at a price they can comfortably afford. Strategies to successfully manage a project’s budget include value-engineering the structure, writing clear product specifications, and managing the construction in the most efficient manner possible. Controlling costs is a responsibility that the best builders take very seriously.

But the builder is just half the equation: every new home project is a partnership between the builder and the client, and there are things a homeowner needs to do to control costs and avoid going over budget. The majority of these have to do with decision-making.

Most clients understand the importance of making timely decisions and minimizing changes once the project starts, but many lack a framework for making those decisions. The following five concepts will help a new home project come in on time AND on budget.

1. Complete the creative process before breaking ground.

Some people find it difficult to visualize how a finished space will look, so they postpone some design decisions until after the house has been framed, which can mean reframing certain spaces. Building something twice costs more than building it once. People who have trouble envisioning spaces should mention this as early as possible in the design process, so they can take advantage of the many tools available — from 3D design software to physical models — to help them get a better grasp on how their rooms will look and feel.

2. Choose as many products as possible before work starts.

Even people who don’t have trouble envisioning spaces may feel tempted to change their minds about products and finishes after construction begins. But changes almost always add cost, even if the substitute products are comparably priced. Take choosing a different tub for the master bath, for example: there will be administrative charges for ordering the new tub, canceling the original order, and maybe even returning the original tub. Depending on the stage of construction, the change could also delay the drywall while the builder waits for the new tub to arrive. That, in turn, might throw off the rest of the construction schedule.

3. Understand that every item has a cost.

Some people approach the process of designing their new home as they would an all-you-can-eat buffet. They sign the contract and then act as if they can add anything they want to the plate without financial consequences. Even if the extra costs are small — a more expensive faucet in the kitchen, a better grade of carpet in the bedroom — in the end it all adds up.

4. Learn to love multiple choices.

Rather than settling on one particular product, pick good, better, and best options for each product category. If the budget numbers start swelling, it may help to substitute that top-of-the-line lighting package for something less expensive that still works with the rest of the decor. Defining these options ahead of time makes the process a lot more efficient.

5. Leave plenty of lead time.

The more days or weeks between the clients’ product selections and when those products have to be installed, the better. That way, an unexpected delay from the product manufacturer or distributor won’t hold up the job.

The above guidelines are a proven framework to control costs. Following them will reduce stress and help ensure a more satisfying project.