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Design Build Projects - Whose Minding the Store?

So you're ready to start your design build remodeling project. You have hired yourself a contractor and are raring to go right? Wrong!

Of course a new renovation project is an exciting time especially a design build project which allows for the most instantaneous freedom of expression.

Anticipating the end and having a fresh new look is a temptation to hurry the process along. But a word of caution; walk don't run. A design build project can also be difficult to keep on track if you don't have a plan.

Unless you are someone with endless means, don't get ahead of yourself, the work you do up front could potentially save you thousands even tens of thousands of dollars in the end.

Working out a comprehensive budget that will get you both the final design you desire while keeping you out of financial trouble is sometimes a high-wire balancing act. But it can be done.

Ok so how do you achieve this important goal when you don't even know everything you want? Well first you must take some important steps that if not done, can have a negative impact on your actual budget.

Here's the Top 10:

1. You must realistically decide how much you can "invest" in this project. And it is truly an investment as you will benefit financially from the return on investment (roi).

2. Determine what type of funding will you use? Savings, personal note, home equity line of credit or loan? Choosing the right type of funding can also save you money. You should speak to your financial advisor.

3. How much of a contingency are you able to set aside for unforeseen conditions which result in changes. (It should be at least 15%; 20% if possible).

4. Get the basic design on paper as soon as possible. This would include plans, elevations and specifications. Whatever can be determined up front should be. This will help solidify your budget.

5. Obtain a minimum of three bids from contractors based on the basic design intent. Make sure they are pricing apples to apples.

6. Establish allowances for all large purchases such as plumbing fixtures, appliances, lighting and stick to them.

7. Check contractor references thoroughly; view their work if possible. Having an incompetent contractor will cost you money.

8. Get it in writing. Whatever pricing, materials and/or project schedules are agreed upon up front, they should be part of a written contract.

9. If your renovation project is large (and large is relative to your budget), you may want to consult an attorney to review or even write the contract for you.

10. Require insurance certificates (general liability and workmen's compensaton) from your contractor and subcontractors.

So What's Up With the Title?

Ok why is this article is entitled "Whose Minding the Store"? Well of course it is only a metaphorical question but it is one of great consequence. The "Store" is your budget. And the question is who will be minding it?

Believe it or not, I see many just sort of loose track of it. Then all of a sudden, wham, the reality hits them like a freight train. Someone needs to be in charge.

It can be you, your architect or your designer but it should be done consistently by the same party and updated no less than once a month on a good size project. A written comparison of actual costs versus estimated costs. This will keep your budget from derailing.

Design build projects are difficult to anticipate costs way in advance keeping constant tabs on them is imperative. A good way to do this is to create categories or phases in the beginning. The construction industry uses what are known as CSI codes. These construction cost codes break down a project by every category and assign a number to it thus creating a schedule of values.

If your contractor is unfamiliar with them, they can create their own just make sure it covers all the categories you can think of and includes material and labor. Then when they invoice you, they should bill against these categories.

Not only will you see where you may be getting into trouble, you may also see where you have a windfall and can move some money (theoretically) around.

Your contractor should be able to provide you with this information. It can easily be managed on a simple spreadsheet.

Don't Forget This One:

A category that many people overlook is general conditions. These costs can add up especially on a large project. It includes items such as dumpsters, temporary utilities, portable toilets, cleaning, management fees, temporary controls and protection to name just a few.

Other substantial amounts of course will be found in the major trades. These will include rough carpentry, plumbing, HVAC, electrical, millwork and finish carpentry, flooring, doors, windows and roofing materials.

Ok so now you have your design and a budget you can live with. Now what? Now a call to action.

Research your product selections and their availability. The earlier decisions are made the earlier the orders can be placed. Delays cost money pure and simple.

Dilligence is the key:

Don't let the inertia of your project get your budget spinning out of control. By carefully monitoring your budget, you will not only get the finished project you desire but also may find a way to get things that were once only on your wish list.


For additional information please see Construction Budgets; How to Create and Stay on Them.


About the Author: Tammy A. Borges is the founder and author of the popular website Remodeling101.com. This website is a complete beginnerís guide to the home remodeling process.

She is an experienced and accomplished Senior Project Manager and has been in the construction industry for 25 years.

Following the tips and strategies she uses will help lead you to a successful remodeling project.




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