Adding to your home? Remodeling? Building new? Here’s why every estimate is wrong (and how you can get your project done on budget).
Whatever you’re building, whether it’s a backyard cottage, a basement apartment, a remodel, or a new custom home, you’re going to want an estimate before you break ground.
After all, remodeling or adding to your home is a big commitment. Of course you want to know how much it will cost.
The problem with estimates is that they’re just that: estimates. No matter who is doing the estimate, it’s never going to be exact. And if your estimate isn’t done right, you could end up paying thousands more than you’d planned. Your project might even fail.
So the trick is getting the most accurate estimate possible.
Tip #1: The best place to start is by looking at similar projects.
At New Avenue, we meticulously gather data from each of our projects. That’s accurate records from over 500 projects—something no one else in the industry has. It’s more data than a single professional will see in a 30-year career.
We use that information to show you exactly what real-life projects like yours cost. While every project is different, this is the best way to find out what to expect with yours.
Tip #2: Get your contractor on board as soon as possible.
It’s important to consult with a contractor as early in the process as possible. Having your contractor at the first meeting gives you a complete design/build team right from the start: The owner (that’s you), the designer, and the contractor.
At your first meeting, the designer will talk ideas, and the contractor will address building concerns, ways to avoid mistakes, and opportunities to keep costs low without cutting corners.
Then we can start drawing your schematic design. This is usually a floor plan and one or two elevations, like this:
As soon as we have this schematic plan done, we want to estimate the construction cost, so we have our building team do a detailed estimate.
Tip #3: Choose the contractor that’s the best fit. (Warning: This is where a lot of projects go wrong.)
Once you have your schematic design and estimate, it’s time to decide whether your team is a good fit for you and your project. While finances might play a role, the decision should be mostly a personal one. If the first contractor you talk to is right for your project, that’s great. If not, talk to another.
But be careful. A bidding war is definitely not going to get your project done on budget. The competition often causes a race to the bottom. You may end up with someone you don’t want to work with on a long-term project, and you’ll definitely end up with a lot of change orders, which will increase your costs.
Choosing the lowest bidder simply because they are the lowest bidder is a huge mistake (and, unfortunately, a common one). It compromises your quality and your budget; you’re practically guaranteed to spend much more than you planned.
Tip #4: Understand that an estimate is just that—an estimate.
Our estimates are the best numbers you will ever see. However, everyone’s estimates, even ours, are wrong. The precise construction bid can’t be created until after the drawings, engineering reports, and plans for finish materials are all completed.
In the end, you may end up spending a little more or a little less than you’d planned. The key to making sure it’s a little (instead of a lot) is having the right people on your side: people who will give you honest, real numbers up front and help you find ways to make your project fit your budget.
If you start your project right, you can keep your costs in check and keep surprises to a minimum.
At New Avenue, we do the estimating early so we get the right people on your team: true professionals that you’ll enjoy working with. Then we manage the design and build to stay in your budget.
With the right process, access to data from hundreds of projects, and the right team, you’ll be able to get more out of your property, with fewer surprise costs along the way.