I'm worried I'll go over budget
You've seen the HGTV special or the nightly news reports about renovation nightmares. Unsuspecting homeowners tell harrowing tales of renovations gone wrong. Budgets explode. Projects go unfinished.
I'm not writing this to scare you or tell my version of the renovation nightmare story. Mine is just not one of those stories. Did we have obstacles? Oh yeah we did. But what I realized is that many of our challenges in the process were largely preventable. I'm here to share what you can do differently as a homeowner to set yourself up for success.
If you're feeling worried your project will go over budget keep reading. I share things you can do to get more accurate bids upfront and avoid blowing through your budget.
Get realistic and specific
What you are willing to spend is not your budget.
It doesn't work to set an arbitrary number. Homeowners get unrealistic ideas about what things should cost to build. It's not really their fault, let's blame HGTV. Don't feel bad, we did it too. When you watch an entire house get gutted in Waco, Texas for $67,799 its pretty amazing. It's also sets extremely unrealistic expectations with homeowners about their own prospects. I swear, you can't even finish a basement in Seattle for $150k.
What you can afford or what you are willing to spend aren't necessarily the same thing. If you have a hard and fast budget limit, understand that you'll need to trim and prioritize your wish list. Don't forget to build in a buffer for surprises.
If a contractor does a walk-through with you and grimaces when you share your budget, it's not very realistic. If this happens to you, dig deep and get clear on what the most important transformations are for your home.
Don't wing it
You need detailed plans to get accurate estimates
Estimates aren't real until they are bids made from actual plans and a build of materials. If you wish to stay on budget, get specific and don't delay decisions or finish selections. The more you leave vague and ambiguous in the plans, the harder it will be to get an accurate bid.
You have to pay for designs before you know if you can afford to build them.
It is enormously frustrating to spend thousands on design worth that you may not be able to afford. Unfortunately, if you want to get accurate bids, you need detailed drawings and specifications for contractors to base them on.
I have always found this so backwards. The building industry in general lacks transparency. Getting an architect to design your renovation can costs thousands.
For example, you walk into a showroom to look at quartz and granite slabs and ask for pricing. The answer is infuriating. Materials are grouped in broad "how expensive is it" categories labeled A, B, C, D & E. You have to get individual measurements and estimates from fabricators. If you're like me you'll think, wow that's pretty! Then find out its the most expensive material in the place.
If transparency is really important to you (me too neighbor), consider more standardization in your approach. Do you want to build your dream? You don't need to necessarily start from scratch. You can buy and lightly customized vetted plans or consider a prefab home.
Be cautious with arbitrary budgeting benchmarks
Sure you can ask your neighbor or a contractor how much their renovation cost. But that isn't what your project will cost. That might have been a realistic number in 2003. It should not be the basis of how you set your budget. Labor and material costs generally increase over time. It costs way more to finish a project now than just a few years ago. (Thanks for nothing inflation!) Plus their project isn't the same as yours - more on this later.
Broad brush estimates make a lot of assumptions
One bid we received to rebuild our house was a single number. No joke. We did not go with this builder. In the end, his number was not that far off, but I still have no idea what assumptions he made about our project.
Before you worry about going over budget, do your homework so you know what is and is not realistic.