Determine Budget For Your Construction Project

This is a series of blogs that are dedicated towards helping home owners traverse through the construction design / planning, budgeting, selection, and closing process.

Here are general items you should keep in mind for determining the cost of your project for budgeting purposes.

It goes without saying that funding is the life and blood of any construction project.  Normally, when construction projects become stagnant it is due to lack of funds so it is very important that funding is readily available for the project.

Often times, as part of planning, you must engage with contractors to determine the size of your project to determine the overall cost of your project.

Contractors will normally consult for free and help determine an approximate size of the project.  If your project’s planning process requires an extended time obligation from the contractor then they may ask that you place them on a retainer.  For custom homes or extensive remodeling, the contractor may ask for 5% to 10% of the overall cost of the project to be dedicated for the design process.  This allows them to fully dedicate their resources and help develop a detailed design for your project.  Normally, the funds allocated for design and planning are  applied to the build project if the contract is awarded to the same contractor.

Quite often, home owners will develop a working relationship with the design contractor and will award the work to that contractor.

Once you have a general design outlined you can determine the overall project cost and time.

In subsequent blogs we will discuss the scope and selection project and awarding the contract for execution.

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