What did you go over budget on and why?

saftgeekFebruary 15, 2013

We've been planning since 2008. Laid low and put off building about as long as I can. I think it is now-or-never time. We're approved for a loan, plans almost done, contractor chosen... It looks like it may actually take off this time. One of my main concerns is a conversation I had with our banker. He said 99% of his loans go over budget. From obsessive planners to the not-so obsessive planners... He said everyone seems to forget something. Landscaping, additional concrete, or simple upgrades drive costs an average of 10-20% over budget.

I have heard about the dangers of low-ball allowances and understand the importance of building the house on paper before signing a contract... I simply want to know why? Why did you go over your cost estimate? Was it an oversight or an upgrade? If you chose to upgrade, why? Were the upgrades suggested? Buyer's remorse on spending more? Was it your best decision? I am very curious.

Thank you in advance for your insight. I'm hoping to learn something and be able to recognize the danger areas.


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Unfortunately, I think your banker is right. There are always things that cause an overage in price....that has been discussed in detail several times on this forum.

My biggest overages was in concrete! Most of the other things were of my doing because of the up-grades I chose along the way..i.e. Granite instead of Formica, up-grade on hardwood...hickory instead of oak..better carpeting, windows in garage door, casement windows instead of double hung, painted cabinets instead of stained, SS appliances instead of white, more cabinets in bathrooms, composite deck instead of treated wood, solid core doors, and so it goes....

    Bookmark   February 15, 2013 at 10:10PM
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1. We had to re-design the septic. +1600.
2. We had to add additional notes to the plans during permit phase. +150
3. We upgraded our countertops +250
4. We had to cut down more trees than we thought but that was a wash since we got more money back for said trees.
5. We had to pull ropes through our conduit and clear out water. +560
6. The city is making us put in a firetruck turnaround since we are 400 feet off the main road. +3,500
7. City also wanted more rock over our culvert. +480
8. After the build began, we decided to upgrade to 5 inch base trim in the whole house. +1,000
9. We also added trim under the eaves of the roof. +250
10. Decided to make our island bigger, that will be +500 in cabinets.

Additionally, there were things that we wanted to upgrade but could not afford to. Like the hardwoods and carpet in the allowances were pretty crappy, so we upgraded but we are doing the install- which actually gets us money back. Same goes for tile in the bathrooms- wanted upgrade so we just did the install.

I don't foresee many changes from here on out. Our builder gave us a detailed bid with every little thing priced out. When I met with our loan lady, she said their bank does not allow builders who price things out a different way, with all allowances- no actual bids. We do have line items we are paying for and will be reimbursed for. So that puts a strain on us because we have to buy them and don't get reimbursed until those things are installed but it gives us the flexibility to shop for those items (for example we are buying all our tile and installing it but can only request money for that item in the draw after it is installed and inspected by the bank).

As we go on, I can report back with more info regards to budget and any more items we went over/under on.

    Bookmark   February 15, 2013 at 11:10PM
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Phoggie - I followed your build and you hired an Amish crew w/o a contract if I remember correctly. Did they provide a detailed list of what their build price covered or did you just chose along the way. I can see where I would be more likely to upgrade on almost all of the items you chose to upgrade.

Sweet - On your bid was the trim omitted and you added as a later option? We aren't that far yet, but the facade drawings all show trim. I'm hoping when I get the bid back they reflect our conversations. On your countertops, did you choose a high definition pattern. $250 seems like a small number for an upgrade to another type of countertop. One reason I chose this builder is because I met with the last couple of folks he built for and they each told me he completed at or below his bid. He told me he wouldn't be the lowest bid because he was going to give me realistic allowances we could actually find products for. I'm hoping this is the case. I've read enough posts on here to know it is impossible to build without upgrading some things. I fully anticipate the same in my case. I have a hard time telling myself no, let alone my wife.

Thank you both for taking time to post. I truly enjoy reading about your progress. Phoggie - I'd love to see pictures of your build. I know you say it isn't fancy, but I bet it's very, very nice and more in line with the type of house I intend to build. I love to look at the big fancy homes some folks build on here, but those are not my style. I wouldn't feel comfortable living in a house that looked magazine perfect. I'm way too ugly to live in a house like that.


    Bookmark   February 16, 2013 at 1:05AM
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We had 3 inch trim but 9 ft ceilings. We were undecided about what to do then visited a family who recently built and they had 9 foot ceilings and 5 inch trim and it looked wonderful. So that was that.

Our countertop journey went like this: first place we had a small group of LG Hi-Macs to choose from- lowest grade hard surface you can get I think :) But we choose a grade higher without realizing that it would be $900 more. But we were willing to eat that cost. Then a month ago, our builder dropped that counter supplier so we went to a new place. This place must have offered our builder some great intro prices because we are now getting quartz. There were a couple of grades of quartz and when we went into to choose, the supplier had labeled them by group and told us how much increasing each group would cost us. We fell totally in love with a quartz from group 2- up from our allowance in group 1- and it will be $250 extra. Not sure why the price jump is so small. But I am so excited to go from Hi-Macs to Quartz it is hard to describe.

We decided to buy our appliances out of pocket because I did not want to pay 30 years interest on appliances but our original allowance was $5,000 and we would have come in under that because it turns out that I have a secret skill which is: appliance shopping ninja. Ha! I have saved over 2K on our appliance so far but it has taken as much time as a part time job looking for deals and negotiating with sales people.

The thing is, your builder could say that your allowance is X for granite but that may be for the lowest grade granite. So when it comes time to choose, you realize the choices in your allowance look like poo and BAM you are over budget on non-poo countertops. The only way I can think to avoid this would be to visit tile, flooring, stone and other manufactures and figure out EXACTLY what you want and have the builder use that as a line item. That would not have been possible for us since we live in a island over here with two tiny, demanding children and never would have had time to go to all the places first, thus we out too much trust in our builder's expectations being the same as ours.

Keep in mind, ours is a 308K, 2400 square foot build. So we are not high end by ANY MEANS. No wolf appliances here. But our house will be a wonderful place for us.

I guess you have to decide where your budget might flex and prepare for it and where you are unwilling to move. Our big splurge was all hardi shingle siding on the entire house so had we chosen something less expensive there, we would have more flexible areas of the budget but like many women dream of fancy appliances or huge closets, I have been dreaming of a shingle cottage in the woods!

:) You will be fine. Just be clear and if you have the time, nail down all your details to a T and price from there.

Also, we are building on a 2.5 acre lot not in any sort of development in a totally custom house that we designed- that can be a different ball game where you're dealing with a builder who has a couple floor plans to choose from and upgrades from there- what is your builder like?

This post was edited by sweet.reverie on Sat, Feb 16, 13 at 2:07

    Bookmark   February 16, 2013 at 2:03AM
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Our main over budget items were the hardwood, cabinets, counter tops, railing, and electrical. Probably could have mitigated some of that by knowing exactly what we wanted up front instead of just asking for 'hardwood' (lots of options), solid surfaces (decided on soapstone and marble rather than granite), lighting and iron vs wood railing. Then we decided we needed central vac, a whole house stand by generator, water filtration system, and chose all our own hardware, sinks and faucets (that can add up fast). We took the appliance allowance and added about $25k to it (~$35k total). A lot of things we didn't know about until we started building. We knew it was all going to be overages but also knew we wouldn't be happy unless we got what we wanted. The pressurized septic system was also a pretty large overage from what we initially thought.

    Bookmark   February 16, 2013 at 2:13AM
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Sweet-thank you for you reply. I can relate to the hectic schedule with children who need a lot of attention. I sure am learning a lot about the reason why folks upgrade. Wide trim, solid doors, water filtration, nice counters, decent hardwoods, etc... All these choices seem logical. I've heard more than a few folks talk about builder grade stuff. One item I thought I'd hear about were doors and windows, especially entry doors.

Mail- your home sounds very, very nice. I won't be making stone decisions but I am very interested in your water filtration system. Why did you feel you needed that particular upgrade?


    Bookmark   February 16, 2013 at 10:07AM
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Our biggest over budget item was excavation costs. It was double the original bid. I'm not sure why as we didn't hit any rock and there werent any changes from the site plan. I just think the sub grossly underbid to get the contract. I wasn't happy with our GC on this one.

    Bookmark   February 16, 2013 at 10:21AM
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If your referring to me regarding water filtration. We are on a well and have a lot of minerals which cause deposits on our porcelain and it has a general minerally smell and taste. We use it for all cooking and coffee but drink spring water. We're hoping w/the filtration system w/UV we'll eliminate some of the 'flavor' of the water. We have it checked relatively regularly, it's potable but not very tasty. Also hoping that the toilet tanks won't be a biology experiment any more.
Doors and windows in our build were spec'd up front and we're happy with them.

    Bookmark   February 16, 2013 at 11:34AM
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My build is not the "usual" build....as I have said, we had no contract...my builder gave me an "estimate"..with approximate costs, for what most would probably consider a spec. house....we did cost +10% of everything he had to purchase...and I did the purchasing of the appliances, flooring, fixtures, cabinets, granite, etc...which saved me paying him the 10% on these items. I have not totaled all of my expenses to date, but know I am over his original estimate because of the concrete overage and my personal chosing.

Since I had a house that I sold...I am fortunate not to have a loan on this one, so I keep telling myself I am moving my funds from my money market to real estate...and hope someday I (or my kids) will be able to keep my money together...and make more than the little interest I am getting in the bank.

They are laying the carpet Friday (22nd) so the inside of the house will be ready for my new furniture delivery on the 26th..BUT the guy that is supposed to be hauling in more fill dirt (for the last three months) has yet to do so and then I need my driveway and sidewalks done after that.....and if we get the snow that they are talking about this week, who knows? But I am living in a friend's house...rent is cheap...so no great rush to move until everything is done.

The outside is my expense....cement, dirt, and landscaping, so I am holding my breath on these expenses....but for the house, I have had wonderful builders, and they only started the last week of November...so less than 3 months...and they have been a delight to work with and they have created me a place that I hope I can live long enough to enjoy for years to come........I would do it again, even at 71 years old!

I sorry I am so computer challenged that I can't get some pictures posted, but I promise that when I am done, I will take some and have my DD get them posted. So many on here have been so encouraging to me and I know they will be for you also. Happy Building!

    Bookmark   February 16, 2013 at 12:04PM
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We went over on just about everything! :-)

Lighting, about $2k, my wife fell in love with a few chandeliers that were more than we originally intended to spend.

Plumbing fixtures....we went with Brizo in the master bath opposed to Delta that our contract specified...and added a hand shower to the tub as well...in polished nickel.

Granite...again, we fell in love with slabs that were not 'in budget,' and we have a lot of square footage of granite with a U-shaped kitchen and a large (9' X 4' island).

Flooring...we went with travertine in in 2 bathrooms versus ceramic tile, and we did hardwood in two bedrooms versus carpet.

Appliances....we went high-end (Thermador) instead of sticking with our original $8k allowance. The refrigerator added $7k alone, otherwise we could have brought our existing fridge with us.

We went over on our closets systems. We are using Incognito Closets. The standard would have been fine with me, but once my wife visited their showroom, she added a lot of extra drawers, stacking spaces and lots of other thing$ she deemed necessary.

If we went with the standard items, it would have been nice, but we are electing to splurge since we plan to be here a long time. Heck, we broke our original budget right from the beginning by building 600sq bigger than we originally intended!

We will likely go over on our blinds, as we really want plantation shutters on the front of the house versus 2" blinds.

Good luck with your build.

    Bookmark   February 16, 2013 at 12:36PM
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I used a quote from a lumber yard last fall to aide me in budgeting. Sheet goods have gone up 50-100% since last Fall so that Is driving the cost of my rough lumber up about 25% from what I estimated. Be sure to use estimates that are current when budgeting!

It's not going to break the bank though because I plan on overages and all materials have not seen this increase. Some things are out of our control!

Also went over by about $2k on my well because we had to go deeper than expected and the quote didn't include a pump!

    Bookmark   February 16, 2013 at 5:01PM
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The list is endless...lol My well was way deeper than one I just had done 1/4 mile away. I had to hire a crane, (didnt figure that.lol) to put in a 3800lb LVL beam in my great room. The room is 36' x 28' wide, 23' high at center.

I built my house with cash I saved. I estimated each part and put away for it. Took about 6 years to save for it. When I had enough, I sold the home I was living in, to get rid of that mortgage, I began the build.

I designed it and hired an architect to bring it to life. I only hired out the concrete, framing, septic, well and insulation. Insulation was 1/4 of what it would have cost for me to do it and they were energy star approved. Electrical, drywall and plumbing etc we did.

My son(16) and I (mom) even put in a telephone pole with power, an underground electric line, 400' down my driveway so we have no poles except one at the road. That would have been over 15,000$, cost us about 1200$ lol and I took it one step farther and put my underground wire in a 4" corrugated sleeve. It isnt required but my cousin is an electrician and he said he has to replace lots of underground wire for a simple rock hole in the line.

I would never want another mortgage, especially on a new home, uhhgg. I think, I saved $200,000 doing it myself and was able to get the best materials etc. I lucked out getting some ace carpenters framers also. That made all the difference.
Lets just say the difference, just on the framing, on me hiring a contractor or me directly hiring the framer was $80,000. I know, because I started there and was like, dude your crazy !...lol

    Bookmark   February 16, 2013 at 7:16PM
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Just like 'pps7' our excavation was more than double because we did hit hard pan and rock!! Couldn't be helped :(

    Bookmark   February 16, 2013 at 11:01PM
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So far ( ha!):

We went over on our foundation because they estimated it for a post=tension and we ended up doing an elevated stem wall. The overage was mainly for the loads of sand we had to have.

We opted for geo-thermal instead of the normal heat/air they budgeted.

Our windows (Anderson wood) were actually under because we specified that in the budget meeting

Our lumber was over a little because prices went up.

I know we will go over on our doors because at the spec meeting we said we wanted solid wood but they didn't budget it that way.

If you take out the heat/air (which we are just paying for out of pocket) we are pretty much even right now. We will see how things are when we get to the finishes.

    Bookmark   February 16, 2013 at 11:36PM
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It seems to me that a bid just isn't a bid in the construction world. In the world I work in if you miss the bid, unless there is something extraordinary, you eat it. If I have a bid on excavating and there seems to be no reason for it to double, i would be really upset. $600 to get water out of pipes and put in a rope? That would upset me too. I can totally understand hitting rock or hardpan...

Matt-ks - Wow! Prices went up that much on sheet lumber.... I sure wish I'd have bought lumber at the prices it was 3 or 4 years ago. I'm hoping my General is current on his pricing.

OK- geothermal can be seen as an investment. Electric rates aren't going down, ever. I'm heavily considering ground source and upgrading our insulation. I haven't heard from anyone yet whose said they went over on insulation. Seems like floors, cabinets, and appliances are the areas where upgrades seem to be most common.

Again, thank you everyone for taking time to share your experiences.


    Bookmark   February 17, 2013 at 12:07AM
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Whenever I build for a fixed price or on spec, I have always been right on target.

No magic or special genius!

Just don't underestimate in the first place. The big unexpected costs in the lists above are: 1) customer upgrades; 2) unanticipated items arising from poor research, inexperience or neglect. That would include relying on out-of-date materials quotes, not realizing you would need a crane to move a 3,800 lb. beam (really), incorrect specifying. It's also easy to overlook all municipal and utility costs, limitations and requirements.

After I've budgeted, I add 5-10% for unanticipated occurrences. These mostly involve what you may find when you dig--water, poor bearing, buried filled oil tanks and even a 150- year old landfill!

This post was edited by worthy on Sun, Feb 17, 13 at 20:17

    Bookmark   February 17, 2013 at 3:05PM
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saftgeek - just make sure it makes financial sense. I have seen some crazy quotes from $60-80k for a geothermal setup. Even with a 30% tax credit, you will take a long time to try and make up that difference at $200 a month. There was a good thread on here just recently about upgrading insulation without going crazy. Sheeting the outside and sealing it is the key.

    Bookmark   February 17, 2013 at 4:25PM
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Worthy, it seems liken the way you do a bid I'd why my contractor said he could build for me cost + cheaper than fixed because he would have to add so much for the "unexpected".

    Bookmark   February 17, 2013 at 8:20PM
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Worthy - I totally understand what you're saying. I've read enough of your posts to get a feel for how thorough you are. I know the work before saves heartache in the long run. I'm hoping my contractor is current enough and understands my desires as far as finish. I've asked for a detailed list from him where we fill in what exactly we're expecting. He is currently building two homes, both about our size, and he says the finish is very comparable. Experience and knowlege is a great asset in a general.

8mpg- I work for an electric cooperative, so I am in tune to the market in our area. I will also be able to purchase the unit direct from the manufacturer. This will save me an additional 3k or so. Unfortunately, I don't live on our electrical system and won't qualify for the additional rebate of $750 per ton. That would have eliminated any need to balance the cost/benefit. I'm planning to install a bibs fiberglass insulation system. The contractor does very good work and comes highly recommended. I'm tossing around the sheathing material and still unsure if it is smart to put insulation under the slab. We are planning to finish half of the basement and plan to stain the conrete. I'm concerned about how cold the floor may be.

Thank you all for taking time to post. Many folks say they over-run or they upgrade and I at times have wondered why they just didn't tell their contractor they wanted granite, hardwood, ground source, etc... in the ffirst place. I guess Worthy is correct in saying experience and planning are important. Not underestimating in the first place... that is the trick it seems.

    Bookmark   February 17, 2013 at 8:49PM
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Many folks say they over-run or they upgrade and I at times have wondered why they just didn't tell their contractor they wanted granite, hardwood, ground source, etc... in the ffirst place

Perhaps they did tell the contractor. It is not enough to just say you want granite, hardwood, etc. There are different levels of granite with varying prices. 2 1/2" oak flooring is less expensive than wide board maple or mahogany. A chandelier can cost $200 or $5000, etc. Most people don't have all those little details down before they start construction. And there are thousands of details!

    Bookmark   February 17, 2013 at 10:38PM
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saftgeek- Im glad you are really looking at the numbers. A friend who is a builder recently told a guy on a local car forum " Unless you're paying cash for the house, you're also financing you're "energy package" for 30 years. $20k @ 3.6% is $90 a month for 30 years. That's every month. Just be sure and REALLY look at the NET savings before pulling the trigger. I've people spend $8k extra to foam a house, then move out in 5 years and never recoup that investment."

    Bookmark   February 18, 2013 at 12:04AM
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8mpg - I've heard countless folks say they are going to do this or that to increase resale value when they sell down the road. I'm not planning to do that. Unless something incredibly unforeseen occurs, this is it for me. I have read these forums almost nightly for years. I kept plugging away, improving our land and dreaming of the time we'd be able to build our forever home. Now that it's near, I'm starting to freak out. I keep thinking about how many decisions there are to make and how inexperienced we are. My family is counting on me to guide them and I'm trying to do as much research as possible. This is why I am so grateful for the kind folks who bare their souls to strangers on this site. Many folks want to save others from making mistakes or they want to steer others towards something truly remarkable. This site is full of well-intentioned individuals who really make visiting here a pleasure.

I guess deekeboo is correct in the fact that so many variables are at play. I hope I can post helpful items for others as we build and I'm not one of folks who have the unfortunate luck to post horror stories. I'm hoping I've chosen well with our general and my stories will echo Phoggie's.

Thanks to all who've posted...


    Bookmark   February 18, 2013 at 12:50AM
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My builder, seems to me low balled all the allowances. I will be over in just about everything. Example I picked out the cheapest bricks available and was still 400$ over. I know that's not a lot of money, but I should have at least be able to come in under budget with the cheapest brick gesssh. I'm wondering if all builders do this?

    Bookmark   February 18, 2013 at 3:18AM
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Well, the pulling the rope thing through was unexpected for everyone. The conduit was installed in 2009- long before we bought the lot in 2012 so no one knew the state of the pipe until we dug it up. We had our fingers crossed for no issues but it was a bummer that is cost that much for such a seemingly simple task- the conduit is 400 feet long though.

The only thing I wish is that our builder would have said: Everything I did with an allowance is an allowance for the cheapest thing possible in each category. That would have helped our expectations. :)

    Bookmark   February 18, 2013 at 11:12PM
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So far we wiped out our granite allowance with the island alone. I had a discussion with the designer and she supposedly wrote us in for the most expensive granite. I didn't double check these numbers. My mother was ill, and then passed away, so DH handled everything. He is very easygoing.

There are many decisions coming that I'm worried about. Insulation, electrical, a door that we thought was included but wasn't. I've been trying to get information from the GC about the exact numbers they budget for the basic options in the various categories (tile, fixtures) so I can find out what it is and see whether I can find something I like for close to that price. I think that is the only way to stay on track at all, as it seems to me the whole system is set up to make you fail to control costs. But so far I have not gotten the info after repeated requests.

Phoggie I have found your journey very inspiring. Thanks to all for their willingness to share - at least I don't feel completely alone!

    Bookmark   February 19, 2013 at 1:20AM
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We went over on several things:
Electrical: $1000 (we added can lights and extra outlets, receptacles, ethernet ports, etc.)

Lighting: We were I think $1500 over on fixtures

Cabinets: $2000 over

Countertops: don't know the exact amount but went for Granite over formica.

Flooring: We staid within out hardwood budget but for upgraded Tile and Carpeting. Not sure of the $ amount.
I could go on and on......
however, we built in a small contingency and planned many upgrades ahead of time so they were actually planned for. That helped a lot. We have a $7k allowance for driveway and patio, and our builder swears up and down it will cover everything, but I have a suspicion we will be over on that as well.

So my biggest piece of advice....PLAN AHEAD. Think of everything you might want and include it from the get to. And build in a contingency reserve, even it is only a few thousand bucks (that's all our was) and that gives a good bit of padding.

    Bookmark   February 22, 2013 at 1:18PM
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sweet.reverie - Your upgrade to 5 inch trim, is that crown molding you refer to?

    Bookmark   February 24, 2013 at 9:32AM
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