construction education

Estimating House Construction Costs
Our Mother’s Favorite Word: “Budget”
So you have a house design you love; is it in your budget?
   
It is next to impossible for someone not in the construction trade to do an accurate material and labor take-off. This article describes a reasonable approach for doing a preliminary cost analysis of home construction costs.

Bombarded by images of movie stars in full-glass shower surrounds, "designer-dogs" laying on the finest imported marble tile, hurricanes battering asphalt shingles (that look like ocean-aged cedar shakes) warranted for forty years, televisions top chef working at his full-overlay cherry cabinet kitchen, brass entry locksets suitable for restorations of Newport mansions, and on and on. The problem the square foot price your working with is based on store-brand vanilla ice cream.

The following is a list of pitfalls to avoid;

blindly using square foot costs to budget your project (know what assumption are being made for square foot number you have been quoted),
not understanding the quality and complexity the construction required for your specific house design,
blindly accepting allowance numbers (you must shop costs for each type of flooring, different manufacturers of kitchen cabinets, etc.) You must do your homework, allowances are almost always to low, too optimistic, or adjusted to hit an unrealistic budget,
blindly believing there will be no "extras", no change orders, everything will go 100% as planned (like the rest of your life),
not understanding all the variables (why it is pointless to do a quantity item by item take-off), profit margins are determined by market conditions, time of year (winter work in snowy climates), competition (bidding) or your skill as a negotiator, overhead is determined by company structure, effected by company dollar volume, worker's compensation, health insurance, office staff, rent, etc.
know the costs particular to your job including builder's risk insurance, temporary utilities including heat, job phone, permit costs, etc.
understand lumber costs are volatile, change with Canadian tariffs, seasonal demand, and natural disasters such as hurricanes which effect plywood and other costs nationwide,
quality of materials vary widely, "clear all-hear vertical grain cedar clapboards, versus rough sawn pine with knots. Know what you are selecting and why,
be careful in analyzing prices at retail or list price, contractor discounts can be significant, but vary product to product, plumbing fixtures might be 30% off list, window prices 50% off list, use list prices only for comparison, and know nothing is sold at list price,
avoid proprietary specifications, allow for equals whenever possible, locking into one manufacturer will raise prices especially if local distributors have regions locked up from competition. (This will require you to do your homework)
Finally, use this article to develop a strategy for designing under your price per square footage targets, where to spend your scarce dollars most effectively, and when it might be appropriate to cave-in to Madison Avenue's marketing efforts.