Construction Estimating – A Planned Approach To Building Cost Estimates

Any construction venture, whether it be building from the ground up, remodeling or a commercial venture, depends on accurate construction estimating to bring the project in on time and on budget. The project plan, after it has been conceived, requires appropriate building cost estimates for labor, material and any associated administrative and permit costs. Accurate cost determination helps to avoid budgetary shortfalls. If you are in the construction business, the companies profitability is affected by project outcomes and the effectiveness of your efforts as a project manager will ultimately be determined by how well you manage the overall project costs.

Construction estimating services can be used for residential or commercial projects to improve the overall quality of the estimating process and eliminate areas of risk. When attention to detail is paramount to the costing process, it is easy to overlook small details that can result in costly blowouts. Research indicates that home building projects that are undertaken with the intention to save money actually experience a total cost of up to 30% more than the original anticipated building cost estimates. This can be detrimental to individuals who have not allowed sufficient scope for cost overrun. For commercial projects that rely on accuracy to submit contract bids, their services can be useful for improving the chances of turning in a winning and profitable contract bid.

Construction Estimating

Construction cost estimating guides are a useful source of information for individuals and industry professionals. Documented case studies on building construction can provide a useful breakdown of overall construction costs. Whether you are an industry professional or undertaking a home or remodeling project, these guides are a valuable source of construction estimating information that can help improve your overall costing process. There are several online sources that provide this information by subscription or by individual case study purchase.

Construction quoting software is an additional aid that can be used to improve the overall estimating process. Apart from saving time and money, you can use this software to produce detailed reports for labor, material and subcontractor costs for any project. This type of software often has a built-in dimension calculator which makes scoping and bounding material requirements a breeze. You can also build a requirements library for items that are reused frequently in projects. For minimal cost, this software can make your construction estimating efforts more efficient and accurate.

Additional articles throughout this site provide further guidelines, tips and advice to improve your overall construction estimating endeavors. It is important to remember that additional evaluation and planning can help you better prepare your project for a greater chance of success.

Guidelines For Building Construction Cost Estimating

As a prospective new homeowner, you need to decide if you are going to purchase a previously built home or if you are going to have your home custom built according to your personal specifications. If you decided to build, building construction cost estimating will become a very important part of your overall cost needed to get you into your dream home.

There are a lot of variables that are taken into account with new building construction. Building construction cost estimating is largely speculative and is determined by not only local conditions but also national trends. The first thing to do once you have decided to build your custom home is talking to a few local contractors or home construction cost estimating firms.

Using a local contractor is very important because they will know all of the local nuisances when it comes to building a home. There are permitting fees, impact fees, and environmental requirements that a local contractor will know to add into their building construction cost. Estimating done by non-locals may underestimate these fees and you may end up spending more than the estimate you were originally given. Get several building construction cost estimates to determine a reasonable estimate of costs.

How the new housing market is going in the area you are building it will also influence your building construction cost. Estimating is done by the volume of business that the contractor has. If they are extremely busy they will estimate the cost higher because they don’t really need the work and if they get your job then it is “gravy” for them. If the new construction in the area is slow then you will see the contractor’s bids go down some so they can get the job.

When the local building construction market is booming it also means that the contractors will have to pay their subcontractors more. The sub-contractors will also be much busier and be working lots of hours so they will want to be monetarily compensated for their time. This is especially true if there is a shortage of one particular trade. For example a few years ago after Florida was hit by four hurricanes it was virtually impossible to find a roofer, and if you did, you paid for it. Home building estimates can vary due to economic circumstances.

National trends will also have an impact on the way your contractors do their building construction cost estimating. For example in the last ten years, there have been two major supplies that were in high demand and short supply. When this happens you can expect the estimated prices to go up. It is just simple economics of supply and demand. The supplies at that time were concrete and plywood. Both affected not only the pace of completing the projects but they also added expenses to the building construction cost. Estimating projects became harder to do so the home improvement estimating contractors made sure that they added plenty of extra money to cover the rising costs. With the recent wildfires in California, you will see that estimates will rise nationwide to protect themselves from any supply shortages that may arise.

As you can see there are both local and national trends that can impact your building construction cost estimating that you receive from your contractor. In essence, it really comes down to the basic economics of supply and demand.

Where To Get Residential Construction Loans

A residential construction loan is basically a credit line that the lender sets up on behalf of the homeowner for the payment of subcontractors and suppliers, who really cannot afford to wait until the house is finished for payment of labor and materials they have provided. Before a construction loan can be obtained, though, an application and approval for a residential mortgage must first be made. Residential construction loans can be availed through many different sources. Here are some of these sources and their attributes.

The Builder

The builder hired for home construction can finance the construction on loan. This will usually mean a higher price quote on the house since the builder gives the quote to its lender before the duration of construction is known. The builder has to assume a longer period in order to cover the risk. Taking this option assures the homeowner that the builder is financially capable to accomplish the job. In addition, since the builder is paying interest on the construction loan, it is spurred to get the job done quickly.

Banks

Banks (and other lending institutions, as well) consider residential construction a market for excellent business and are always hungry for such ventures. They offer a range of loan offerings with respective rates and terms to choose from. However, these institutions are often wary to stick their neck out considerably without some guarantees.

Construction loans are called story loans because bankers or other lenders would want the story of the construction plans before they are willing to loan the money. They would want to know details on where the home will be built, how it will be built, schedules, the cost, and estimates – a complete construction package of the home proposed for construction. Banks are frequently very hesitant to grant the loan without the involvement of a licensed contractor. Lastly, chances of getting the loan are upped if the homeowner actually owned the land, which the bank will then take as collateral.

Construction Companies

Many construction companies offer financial packages for residential construction loans packed with incentives. However, this does not make them the best deal in the subject of residential construction loans, and homeowners would best compare these offers with that of other opportunities.

Government Assistance Programs

There are many government programs that offer residential construction loans or assistance or both in the U.S. Such programs include offers for down payment assistance for low to moderate-income home purchasers and special home loan programs for veterans, teachers and law enforcers. State housing banks propose different homeownership programs like fixed-rate mortgage loans at lower interest rates than regular home loans.

Some programs fund local public agencies and private entities to produce affordable housing or make loans. The Mortgage Credit Certificate (MCC) Program involves income tax reduction and net earnings increases, which thus allow a buyer to easily qualify for a mortgage.

Private, government-sponsored enterprises like Freddie Mac and Fannie Mae also exist to provide financial services and products through savings and loans and mortgage bankers to low to moderate-income families, especially in rural and underserved areas. Freddie Mac and Fannie Mae extend their services online in providing tutorials and other resources on home purchase and loan processes.

New Home Construction, Step By Step

New home construction at Georgia, USA

After the costs of construction have been estimated and all other necessary planning has been made, it is time for the actual new home construction to begin. The construction phase is one large step closer to owning one’s dream home. It is when all the painstaking preparations slowly but gratifyingly pay off in a most enjoyable way.

Home construction varies with the home and the location. Homes near the hurricane belt will have to be fortified against hurricanes. Some places will require homes with basements, while in other places, basements are unheard of. Methods and materials in building a home may also vary, but there are certain processes that remain in common. In order to be able to follow on the construction process, below is a detailed guide to low-cost home construction:

Home Site Preparation

The positioning of the house is usually finalized at this point, following specifications in the plans or the most suitable alignment that can be achieved between the design and the conditions of the site. The area is marked with stakes to show the final positioning. The clearing of trees and other possible obstructions to the house is then carried out. It is also at this stage that a rough driveway is sketched.

Foundation

Laying out the foundation is the first stage in the construction and one of the most important. Holes for the foundation will be excavated. The plumbing and electrical undergrounds will be installed and trenches for utility lines dug. The concrete flooring of the house will be poured and waterproofing is carried out. Grading of the lot is then made. After the foundation is placed, the structure is ready for the framing process.

Framing

At the framing stage, the skeletal structure of the home is created. Wood studs and steel beams for floor joists and rafters and other support masonry are put up. Exterior and interior walls are erected at this point, including the windows and door frames. Roof trusses and the stairs are raised.

Exterior Work and Roofing

The exterior is improved at this stage with some sheathing. The windows and exterior rear doors are better outlined. Siding is installed around the entire house. Roofing is also furthered here. Rain gutters, eaves, facia, and overhang are formed, while decking and shingles are laid out. Work on the garage is included in this step as well.

Mechanicals

The lifeblood of the house is set up in this leg of construction. Electrical wiring, plumbing, and H.V.A.C. (Heating, Ventilating, and Air Conditioning) equipment are installed. Wiring for telephones, cable television, and pre-wiring for a security system are also part of the process. After these have been completed, insulation is then laid out over the house. Further to this, the drywall is installed and once through, the texture can then be applied. It might be insightful to ensure that all components of this stage are in working condition before insulation is placed to minimize wastage and additional costs.

Interior Work

By this time, the interior of the home would need some well-deserved attention. The installation or building of cabinets for the kitchen and other rooms are done and floor surfaces are improved with ceramic tiling or other specified finishes. Doors will be hung and fireplaces and mantles, if any, will be built. Painting, caulking, and staining will be accomplished during this period.

Trim and Finishing Touches

The work is almost finished at this point. Only minor installations will have been undone and cosmetic items are to be added. Plumbing fixtures in the bathroom, kitchen, and other places will be installed, as well as light switches, electrical outlets and hanging electrical fixtures. The H.V.A.C. faceplates or units, thermostats, and compressors are mounted along with intercom, television and telephone outlets. The interior finishing touches include fitting the carpets and carpet padding, and wallpapers, as well as painting touch-ups. Outside work requirements would include finishing the driveway and landscaping. General cleaning of the entire, newly finished home would then be advisable.

It is important that every aspect of construction is monitored and the finished segments inspected by the appropriately qualified professionals to ensure that the new home will be strong and secure for the present and for years to come.

Guide To Low Cost Home Construction

If you are planning your ideal home then make sure you figure in low-cost home construction strategies in your plan. Having a good plan will not only make your ideal home nicely done but it will also help you keep the costs down.

Residential construction cost goes up depending on your materials. Make sure you have a game plan which specifies possible sources of cheap and recyclable but quality materials. Expensive does not always mean the best so make sure you choose your materials based on quality and costs and not on the name of the supplier or manufacturer alone.

Getting cheap construction materials is easy if you know the art of being a wise shopper. The first thing to do is to look for materials in garage sales; most homeowners dispense of still useful materials, sometimes new but no longer useful for them, at such cheap prices. You can also look at broken tiles along construction supply yards and buy them per kilo. Broken but colorful tiles can be designed in such as way as to give a unique or abstract pattern to a certain space.

It would be great if you can scout and buy cheap construction materials a few months before you plan to build your home. Place the materials in an unused room or enclosed lot so you will have them ready by the time you start with your construction. This is more ideal than buying them when you need them because you will have more time to scout and look for real quality but cheap materials if you are not rushing.

Keep your ear and eyes open for inventory sale or similar events because shops do offer their wares at almost 50% discount during this time. If you have enough budget, then you can scout all shops doing their inventory, opening or closing sale to get the best but quality construction materials.

Also, make your mark by doing something special for your home. Why not paint your bedroom or kitchen personally? Consider this bonding time for you and your family. Most importantly, it can keep labor costs low.

It is also a good idea to canvas construction materials prices first before you decide on where to purchase them. Purchasing all of your materials in one place can mean a big discount for you depending on how you discuss it with the manager. Most shops provide discounted packages for people who commit to buying all their materials in one shop until the construction work is completed. If they sell quality materials and they can offer you a good price then why not?

There are a lot of ways to save and keep your construction costs down. You only need a lot of creativity, determination, and willpower. Plus, of course, haggling power.