Avoiding Cost Overruns When Building a New Home
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?
- 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.
- Build a relationship with your General Contractor. If you don’t trust your GC, find a different one.
- 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?
- 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.
- 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.