Housing and You...Attempting to rein in those runaway costs

Housing and You…Attempting to rein in those runaway costs

Mar 30, 2014 News

By Leonard Gildarie

Most folks I know are working class and never had the opportunity to hold three or four million dollars at any one time. It is an intimidating situation. The money looks a whole lot and at the first stage of actual construction, intense attention is placed on the contractor and getting the job done right.
However, while the foundation is probably the most critical part, other areas are by no means less important. The money will start going fast when you are constructing the roof, installing internal fixtures and buying wood. Contractor’s fees and transportation all add up quickly, leaving you wondering where the money went.

It may be a good idea to go through with the contractor the jobs that have been completed, and whether the right materials were used.

We have been examining the many pitfalls of home construction with the main intention of reducing cost and having the structure delivered in the shortest possible time. Some of the measures include watching the contractor closely; not allowing him to make purchases; shopping smart at the hardware stores and ensuring no waste.
Well, the experts too have many tips on how to cut costs on construction. I love the internet. Google’s possibilities, of allowing one to find just about any information, are unbelievable.
HGTV is probably one of North America’s most powerful and respected television and magazine forums for anything about a home. According to HGTV, one of the biggest mistakes being made over time is the actual design or plan used in the construction.
This is again a topic I hate repeating. Our drawings in Guyana, in most cases, merely show the structure and location of bedrooms and size. While there are a few exceptions by homeowners who are more enlightened, generally the drawings remain a major problem. In the US and other developed countries, drawings have to include specific details like the size of beams and joist, etc.
All the local lending institutions would ask for an estimate when you are applying for a mortgage. Most folks continue to make the same blunder…rushing through these estimates. The lender will give you what you ask for. The problem is that most times scant attention is paid to these estimates. The problem comes when the contractor, in some cases a different one, would order materials. Obviously, it will affect the budget, as you will be digging into monies that were set aside for something else.
HGTV says that it is wise to develop preliminary costs for each phase of the home, using actual costs that hardware stores will be charging and then attempt to maintain these. There will always be variance, but if one can set aside an extra 15% on top of costs, to cater for transportation, among other things, some control can be exercised.
Again, like I mentioned before, all drawings must be uniformed and detailed, to ensure that when you order materials, it is what you would have catered for.
A simple illustration would be the contractor all of a sudden deciding that he is short of three pieces of two by fours. Right away, you have to find the money for that and the transportation. A horse cart starts $2000. It adds up.
Of course, HGTV is aware of the scams by contractors. They recommend putting systems in place that will allow you as the homeowner not to accept bills for materials from contractors who took it on their own to buy.
HGTV also says that probably the easiest manner to deal with contractors is by issuing what we Guyanese call ‘job work’. This is simple. You are not paying a contractor by the day, but rather, for a finishing a particular phase. Say a bathroom or the foundation or roof framing. ‘Day pay’ calls for intense monitoring to ensure that the workers are not liming.
Now, new construction materials are being introduced all the time. Some would be cheaper. While I love local materials like the many types of wood, there are other options available. So even though the estimate for the materials would have initially been handed into the lending agency during the mortgage application stage, there is still a chance to make some changes on the materials you want to use.
I would recommend you, as the homeowner, to talk to the lender as what freedom you have to make those changes, even after the mortgage financing would have been approved.
My neighbours are building and the workers are coming to work after 08:00 hrs. They take about one hour to change. So they start after 09:00hrs. With lunch hour, smoking time etc, the time can run out. HGTV has recommended that a good relationship with workers might not be such a bad thing, as it would help to push them to work better.
Another recommendation that I found interesting is what HGTV called audits. At each stage, it may be a good idea to go through with the contractor the jobs that have been completed, and whether the right materials were used. This audit will also give you an idea whether the contractor is wasting the materials.
HGTV says that it can be a good idea to shop around, as money can be saved. While some hardware stores may offer almost all the items, there are frequently issues of quality and price.
Well, another weekend is here. Enjoy yours, be safe and continue to send those comments to [email protected] or call weekdays on 225-8491.