4 Unexpected Costs That Can Happen During Home Design Projects

In most design projects, some things go as planned, and others don’t. Typically, unexpected costs occur, causing the initial renovation budget that you projected to be off. It is almost impossible to predict which items will come up that throw off your original renovation cost projections. Many house flippers simply add in a line item labeled miscellaneous. It’s a smart idea to budget accordingly for mishaps. If you plan to sell a house directly after finishing the design project, you’ll want to stay within your budget as much as possible. In order to help you with your next design project, here are some of the common unexpected costs that can happen.

1. Project Design Planning Errors

Imagine that you assign proper resources and time to estimate the schedule and budget before designing the project, and your plans turn out to be incorrect. In that case, unexpected costs will rise. If you have inaccurate measurements for a particular part of the project, it could completely throw your plans off. For example, when designing a kitchen, it is important to leave as much space for appliances as needed. Have you ever tried to put a dishwasher into a space that is too small? It happens to people constantly!

However, these types of errors are sometimes avoidable. During the design phase, using construction software can help reduce the risk of errors or unfinished design by making sure that everyone working on the project is on the same page. Project management works well when you depend on software as everything is automated. You can also update real-time changes that contractors can acknowledge. For instance, if you come up with a design change midway through your project, you can easily add those changes in digital form rather than drawing it again on paper.

In addition to that, if you want to avoid such errors in your design, you can get a second set of eyes to verify your measurements and overall plans. By adding this extra level of review, you are ensuring that the designs are accurate. This will help avoid pitfalls later.

2. Ignoring Change Orders

Unexpected costs during home projects may also occur due to a change order. A change order happens when the contractor or manager of the project finds flaws in the design and then decides to add new specs or requirements to it. This can happen during, or even after, the initial design is completed. At this point, you hope that someone budgeted a miscellaneous line item for the project to help with the cost. Furthermore, you now need additional materials, manpower, and time to complete the project. You also need to consider if the changes or improvements are affecting any other aspect of your project. Certain portions of the projects need to happen before others.

During the contract phase, you can add a Change Order Provision that specifies the conditions of the budget and procedures when changes occur in the future. If you fail to address this on time, the contractors will increase the total cost, or simply refuse to follow the changes. It is vital that you put as much in writing as possible before starting the project to protect yourself and everyone else involved.

3. Write Project Details in Contract

This is great advice for any type of transaction in life that requires people working for other people in exchange for money. By writing out all details that come along with a project, everyone is instantly on the same page. How do you know how to handle weird scenarios that pop up during your home project? If it is stated in the contract that you sign, you simply follow the instructions of what is expected. For smaller home projects, lengthy contracts are not as common. However, if you plan to hire out a larger renovation, it is extremely important to put as much in writing as possible to protect each party involved.

If this is one of your first large home design projects and you are unsure what to include in a written agreement, reach out to others who are doing it successfully in your market. They can give you a good idea of what makes sense to include in a contract. Of course, you’ll want to review any contract with an attorney as well to get a true, legal opinion of it. For any ‘what-if’ type situations, it is not a bad idea to include those in your written contract. For example, what if the company that you hired for the design project goes bankrupt midway through the project? Include clauses like that around one-off situations that could happen to ensure you are protected if the worst-case scenario does happen.

4. Poor Project Management

Since it is common for projects to not go according to the original plan, you may face unexpected costs along the way. Unfortunately, there is sometimes a trust gap between project workers and the owners based on the natural conflict of their interests. Even if a good relationship is maintained among both parties, it is hard to manage when the project is large. This will make communication slower. If communication is slower and management is not working towards the same goals, the disconnect can cause costly mistakes to happen.

On-site communication can be improved through communication software to help avoid potential issues between personnel. The quicker that issues can be resolved, the quicker the project can get back on track. Delays usually cost money and add frustration. Utilizing things like software may be a learning curve to initially set up, but can save loads of time by preventing errors later in the project.

Your priority while designing the project should be to reduce unexpected costs that you may encounter during construction. Projects typically never go perfectly according to plan. Don’t beat yourself up over it. Know that random things can happen. Do your best to plan ahead for these situations by reviewing your plans and protecting yourself through written agreements. Additionally, if you increase the communication amongst people involved in the project, it helps save you money in the long run by avoiding costly mistakes.

Additional real estate resources

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