A well-researched & well-thought client of ours passed this article along to me that he found informative prior to us beginning his kitchen remodel. The article is from Money Magazine, June 2011, entitled How to Stick to Your Remodeling Budget.
“Everyone knows that the four most expensive words in remodeling are ‘while we’re at it…’ Yet as any big project unfolds, you’ll face innumerable temptations to upgrade the materials, features, and even layout you originally planned. Spending a few hundred extra for, say, pricier backsplash, tiles or a few thousand to add organizing systems to your new closets may be money well spend, but your cost will eventually soar into the stratosphere. Follow these tips for staying close to the expenses you intended.
The primary cause of busted budgets late in the game is having unrealistic cost expectations to begin with, says Eden Prairie, Minn., contractor Mark Mackmiller. You can avoid them by making as many specific product choices as possible early on. So as you plan your project, go to the tile shop, the stone yard, the plumbing supply, and the lighting store and make your selections – or at least figure out what price range they’ll be in. Otherwise your contractor will give you a guesstimated ‘allowance’ for each item, which may not be enough.
One you’ve drawn up your budget, add 10% as a contingency fund. That’s for surprises that are beyond your control, like termite damage or rotted framing. The good news is that those problems arise as soon as demolition is done and the contractor can see inside the walls and ceilings. Get past this phase, and the remainder of the contingency is fair game for upgrades and extras, says architect Lori Stephens of Corvallis, Ore. Just decide quickly whether you’re changing the layout, because once the crew installs framing, plumbing and wiring, undoing that work would add even more cost.
Tell your contractor – or better yet, write into your contract – that you want ‘written change orders.’ That means you get a black-and-white description and price for any add-ons, which you sign before the work commences. (If your contractor balks at extra paperwork, have him jot the information on the back of your contract and initial it). That prevents surprises – and makes it easy to track your bottom line…”