How to avoid cost blowouts when building a new home

Embarking on the journey of building a new home is both thrilling and gratifying, but it comes with its share of complexities and possible stumbling blocks, resulting in cost overruns. While unforeseen issues are inevitable, and some modifications may be necessary, effective budgeting and project management should encompass potential problems.

As a starting point, it is critical to establish reasonable expectations for your new house project from the beginning. While it's normal to want your dream home to have all the bells and whistles, keeping your budget in mind and prioritising important features will help you avoid overspending. Maintain your focus on your needs and avoid getting tempted by costly additions that may put a strain on your money.

To ensure a stress-free and successful building experience for your dream home, we have compiled a list of essential tips to help steer you away from potential and dreaded project blowouts.

Make sure you have an experienced project manager

To avoid project blowouts during the construction phase, make sure you have an experienced project manager directing your new house build. A skilled project manager brings an extensive range of knowledge and expertise to the table, allowing them to handle a variety of issues that may develop during the construction process. This could be unforeseen foundation works that were not known until construction starts, to managing contractors which could cause delays and council consent issues.

Quantity surveyor’s are your best friend

When it comes to minimising budget overruns throughout the design and build phases, quantity surveyors could prove to be your best friend. A quantity surveyor is a specialist that specialises in estimating and controlling building expenses accurately. A quantity surveyor can be a valuable member of your team as their responsibilities include cost estimation, budget management, variances, and claims.

They have all of the contacts and ties with suppliers and contractors and are able to investigate price, materials, labour, and equipment, as well as any other costs associated with the construction of your new house. A Quantity Surveyor will provide you with a detailed and precise estimate as well as identify any unforeseen expenditures that may arise throughout the construction process, ensuring that you are not caught off guard. Quantity surveyors can also keep a close eye on spending throughout the project to ensure it stays within the planned budget. If there are any deviations, they can quickly identify the source of the problem and work with the designer or project manager to solve it before it escalates.

At Location homes, we have an experienced in-house Quantity Surveyor who manages your budget, mitigate risks, and ensure that your dream home development continues on schedule, avoiding the usual budget blowouts.

Avoid amending council consents

Making changes to your plans or material specifications after they have been signed off, priced, and approved by council is one of the most common errors when building a home. Avoiding frequent changes is critical for avoiding construction delays and budget overruns. These consents indicate local government approvals required for construction projects. Amendments can not only lengthen processing timeframes but also incur extra charges. Thorough planning, expert assistance, and pre-submission evaluations can help assure regulatory compliance from the start.

During your project, clear communication with the council and regular inspections during construction help identify and address issues promptly. A project manager oversees this.

Budgeting for landscape costs that are not part of the build quote

Landscape costs in most cases are not included in the build quote. By budgeting for these landscape costs separately, you can have a well-organised financial plan that complements your building quote and ensures your property's overall value and enjoyment are maximised.

Landscaping costs to be considered are not only plants and lighting but also Include the expenses for hardscaping, such as pathways, driveways, patios, decks, fences, and any other structures you want to add to your landscape. Materials, labour, and any necessary permits should be factored in.

Unexpected site works that were not able to be predicted in advance.

While builders and designers typically strive to identify site restrictions and potential issues before commencing construction, unexpected site works can still arise. GeoTech reports and council plans play a vital role in providing crucial insights into the site's conditions, guiding the design and build process. Yet, some foundational site issues may remain hidden until construction is underway, making it challenging to predict them in advance. In such situations, having a skilled project manager becomes invaluable. A professional project manager can adeptly recognise any unforeseen issues that surface during construction and provide viable solutions to address them. Their expertise ensures that the project stays on track, minimising delays and cost overruns.

These unexpected site works can range from encountering unfavourable soil conditions or underground obstacles to discovering hidden utility lines that were not accurately mapped in council plans. Dealing with these surprises demands quick and informed decision-making to avoid disruptions to the construction timeline and budget. A project manager's ability to assess the situation, coordinate with relevant stakeholders, and devise efficient solutions is instrumental in successfully navigating such challenges. By swiftly adapting to the changing circumstances and drawing upon their experience, project managers can help keep the project progressing smoothly, even in the face of unforeseen site works.

Avoid frequent changes

The majority of contract modifications and cost overruns are caused by the client changing their mind after the design stage is complete and pricing for selections has been accepted. It is crucial to select the fixtures and fittings you want in your new house as early in the design process as possible, and to stick to those selections. Every change you make will cost you money, especially when it comes to significant alterations like floor plan changes or material changes.

Getting reliable and skilled advice from your team as soon as possible is critical, as is talking with interior designers, designers, or an architect.

We suggest you talk to the builder and make sure you know exactly what is and isn't included

We strongly advise having a comprehensive talk with the builder to establish exactly what is and is not included in the building quote. Especially if you contact different contractors and the quotes fluctuate significantly. This preventative measure will assist you in avoiding misunderstandings or surprises during the construction process. Some builders are known to leave significant prices out of quotations in order to secure a construction project, only to add them in once a contract is signed.

Discuss specifics such as landscaping, site work, and any other potential extra costs that may not be addressed in the original price. Having a clear idea from the start will allow you to budget effectively and make informed decisions.

Making sure that neighbours are happy with your plans

Although not every new home construction must be run past neighbouring properties, there may be some situations where it is critical to contact your neighbours as soon as possible to avoid conflict, which can result in time delays. In most cases, your designer will inform you whether or not you will need to speak with your neighbours about problems such as privacy and sunlight access.

Begin by engaging them early on, seeking feedback, and addressing any concerns they may have. Respect what they have to say and be open to making changes that satisfy both their expectations and your desired design goals.

Consider a Fixed-Price Contract

Consider opting for a fixed-price contract with your builder. A fixed-price agreement establishes a clear understanding of the total project cost, minimising the risk of unexpected expenses and ensures that the contract includes provisions for handling unforeseen changes or additional work.

By adopting a proactive and strategic approach, you can avoid project blowouts when building a new home. Thorough research, realistic expectations, transparent communication, and careful planning are key to a successful and stress-free construction journey. Remember, choosing reputable professionals and staying actively involved throughout the process will empower you to create your dream home within your envisioned budget and timeline.

At Location Homes, our commitment to excellence extends beyond having trusted project managers and quantity surveyors. Our unique design and process methods have been carefully developed to minimise known cost blowouts and ensure a smooth and efficient construction journey for our clients.

One of the key pillars of our approach is meticulous planning and design. Before construction even begins, our team collaborates closely with clients to understand their vision, needs, and budget constraints. Our skilled designers and architects then create comprehensive plans that take into account every aspect of the project, from the architectural design to the selection of materials and fixtures.

We firmly believe that transparency and open communication are essential for successful projects. We keep our clients informed at every stage of the construction process, providing regular updates on the budget and any changes that may arise. This transparent approach empowers our clients to make informed decisions, and it also allows us to be responsive to any concerns or adjustments they may have