Avoiding Cost Overruns When Building a New Home

Posted by ACyr on November 7, 2011 in About Schiavi's, Budget/Financing, Codes/Legislature, Construction, General Information, Modular Homes, Renovations, Uncategorized | 1 comment

We have all heard the horror stories of families building a home and the contractor going WAY over budget, or worse running out of money and not completing the home… How can people building a new home avoid this disastrous situation?

1. Don’t go it alone.  So many people think that by being the General Contact of their own building project they will save money.  In 95% of the cases where customers act as the GC, the project ended up over budget and WAY over schedule.  Find a General Contractor with a strong reputation.  Use the Better Business Bureau to check potential companies out, as well as customer referrals.
2. Build a relationship with your General Contractor.  If you don’t trust your GC, find a different one.
3. As you go through the sales process, listen carefully!  Beware of builders that consistently use estimates and allowances to give you pricing for your project.  There is a big difference between estimates and quotes.  Estimates are a general best guess of the cost, a quote is a real number based of the perimeter and details in the quote. Example: Estimate for Demolition of existing structure: $4500; Quote for Demolition of existing structure:  Excavator for 4 hours $4,200, 1 extra dumpsters for debris and site clean up $1,500, total $5700.  As you can see, the quote is higher than the estimate, but which figure is better?
4. By Maine law, there must be a construction contract between the homebuyer and the builder.  A construction contract is a binding legal document that must include certain details and wording in order to meet Maine State rules & regulations.  Maine has provided an example building contract for people to refer to.  We recommend printing this document, to help you get a better understanding of what you should expect in the contract with your contractor.
5. In the state of Maine, anyone with a hammer can claim to be a builder.  Kind of a scary thought!  Please Note: Modular Home Builders are required to be licensed through the state.  The Maine Attorney Generals office has set up a comprehensive list of items homebuyers should request from potential home builders on their website. Click here for the list.