When you are building your new dream home, it’s important to consider the possibility of cost overages. Overages are expenses incurred during construction that can increase the cost of the home. When a builder provides a cost for building, it is most likely an estimate and not a guaranteed quote. If you do not carefully read all contracts and agreements, plan carefully before starting construction, and have an allowance for unexpected overages, you may find yourself with an unpleasant surprise when construction is complete. Many construction loans have overage protection built in. Typically there is a 10% to 20% allowance, so speak with your lender as well for the details. Below are some of the most common overages that occur, and can help provide some insight to avoid or minimize them.
Home Building Prices Are Estimated
The raw materials used to build your home must be estimated. The estimate for lumber is by the board foot, but lumber does not necessarily come in the same length you need. Often, lumber is cut to size and the waste can make it necessary for more lumber than was estimated. There are also times when the lumber and other materials are damaged or unusable. The same issue is true of items like shingles or floor tile that come packaged in bundles or boxes that may not be fully used.
Material Costs Can Change
Usually, the cost of building materials do not drastically change during construction, but it is still a possibility. Building products are often priced based on supply and demand. If there was suddenly a shortage of a material the cost could rise drastically adding a large expense to the home construction.
Changing Your Mind
One of the most common and easiest overage to avoid is when the owner changes their mind about the home. Sometimes, even changes in the design are made during construction at the request of the owner. Some changes can be made without adding a significant expense. Changing the color of paint for example may not be a huge expense, but adding a room can make a very big difference between the estimate and the finished cost. Plan carefully and make all changes and choices before construction begins if possible, and you can reduce the risk of overages. Working closely with a professional and experienced builder is important to limit the chances of construction overages.
Progressive Builders Is Here For You!
Progressive Builders is dedicated to partnering with you every step of the home building process to ensure that your home plan will accommodate your lifestyle and will meet the needs of your family. We also can assist you in finding the right floor plan and constructing your home with a focus on quality, all at an outstanding value. With over 20 years of experience we’ve built a reputation across the Twin Cities metro area and beyond and are committed to continuing that level of excellence for your new home construction project. We have a number of customizable home plans to suit your needs and several lots available in neighborhoods across the Metro. We invite you to contact us today for more information.