Keep Costs Low by Knowing What You Want

This Blog post is provided by our friends at Armchairbuilder.com:

As a builder, I am regularly asked what can be done to keep costs low for a particular home build.  One of the most basic ways to keep your costs down when creating your dream home is to know what you want before you start.  Changes can be extremely costly in terms of both time and money.

Can You Give Me An Example?

A home builder just got off the phone with a customer.  They are about to finish framing the customer’s 2700 square foot ranch, and they want to add a couple of windows to the garden-level basement and a door from the laundry room to the master toilet area.  The builder informed the customer that changes at this stage are very costly both in time and money.  The response from the customer went like this… “I don’t see why it’s a big deal, I’m only talking about a couple windows and a door”.  The builder went through the reasons why it’s not a good idea to make big changes in the middle of the project, including the following:

Time:  When building a new home, you order products well before you need them, including windows and doors.  Many of the best quality window manufacturers use just-in-time manufacturing, which means they don’t warehouse windows…they make them just before they ship to your job site.  This lowers their cost of capital and lowers your cost to build.  The particular windows the customer wants will take four to six weeks to get…which means you can’t install siding until they are in, and you shouldn’t be installing wiring, insulation, and drywall without the house being weather-tight.

Before construction begins, you submit a permit application to the city along with the plan you are building.  If you make changes, you must make the building department aware of them.  Depending on the municipality’s process, it can take weeks to go back through the plan review.  Technically, you shouldn’t make the change until they review it…just in case you are denied.

Money: Of course, you have the normal costs of making the change, including the windows, flashing, and lumber.  Then add on top of that the rework involved for the carpenter.  Also, there is typically a plan review fee from the municipality and you will need to pay the architect to make changes to your plan.

The most expensive cost is delaying the project.  The average daily cost is between $75-100 from a construction loan perspective.  Then add in the cost of temporary housing and storage for your things and it gets really expensive.

If you live in a cold climate, you may also have temporary heating costs to deal with which can be as much as $20 per day.  On top of this, add on the management time of making the change. From calling all of the subcontractors about the schedule changes to packaging and submitting the revised plans to the municipality, a change during construction can be quite time-consuming. This “simple” change involves coordination and communication to over ten different vendors from the window supplier… to the company that installs the siding… to the building department, just to name a few.

You are building your dream, and if the additional costs and time noted above are worth making the change, by all means, you should make the change.  Just know what you are getting into before you jump into “simple changes” once construction has begun.  If you want to keep costs down, spend the time upfront identifying all of the things you want in your new home at the design stage.