Plan early and be realistic to pull off a home construction project smoothly.
1) Establish Your Budget Early: Consider ahead of time how much you would be comfortable spending on the project. Otherwise, the design team may interpret your needs with a ballpark figure that is much more than you thought it would be.
2) Ensure your Budget is Realistic: Pricing varies based on location, level of finish, complexity of construction, etc. You can consult your design team, ask friends who have done recent project, or check the houzz.com Real Cost Finder. After you create your budget, subtract 20%, since unforeseen situations will arise that may increase the cost. This 20% is referred to as “contingency”. Be sure not to use this amount for upgrades.
3) Understand What You’re Paying For: Hard costs include the costs of construction materials & materials to build, and soft costs include fees for permits, consultants and designers. Understand what your team is referring to when discussing budget: For example, construction is often expressed in dollars per square foot, which usually does not include appliances or soft costs. Work with your design team to understand all the costs.
4) What If You Run Out of Money? Costs may be reduced by changing the scope of the project, such as choosing to rough in the plumbing now for fully constructing a basement bathroom at a later date. You may also reduce the cost of fixtures and finishes such as flooring or faucets.
Excerpt summarized from houzz.com 4/9/14