1 of 6 · Design
What gets drawn decides what gets built.
Incomplete drawings turn into change orders (a price change for work added or changed after you sign) later.
What to do about it: I review the plans for gaps before they go to bid.
Free guide
Why Coastal Custom Homes Go Over Budget
Most overruns aren't bad luck. They're built into the project before the first shovel hits the dirt. Here's where, in order, and what to do about each one.
I write budgets on the developer's side and audit them on the owner's side. The same six things show up almost every time. None of them are accidents, and all of them are cheaper to fix before the contract is signed than after.
2 of 6 · Bidding
The cheapest bid is often the most expensive one.
Low allowances (a placeholder budget for items you haven't picked yet, like tile or fixtures) make a bid look cheap.
What to do about it: I compare allowances to current coastal San Diego costs so you see the true number.
3 of 6 · Contract
This is the document that decides who pays.
Vague scope, loose change order terms, and contingency (money set aside for surprises) the builder controls.
What to do about it: I flag the business risks for you and your attorney before you sign.
4 of 6 · Permits
Waiting is not free.
Coastal permitting and plan check delays (the city's review of your plans before a permit is issued) add carrying costs every month.
What to do about it: I track the timeline and push for answers.
5 of 6 · Construction
Where the money actually moves.
Change orders with nobody checking the price, and builder invoices that run ahead of the work.
What to do about it: I review every change order and builder invoice before you approve it.
6 of 6 · Final stretch
The last 5% deserves the same attention as the first.
Punch lists (the final list of fixes before the job is done) drag, and final payments go out before the work is done.
What to do about it: I help you hold the right amount until it's finished.
The short list
Six causes, in one place.
Low allowances
The bid looked cheap because the numbers underneath it were soft. An allowance is a placeholder budget for things you haven't picked yet, and it gets corrected upward later.
Incomplete drawings
Every gap in the plans turns into a change order once the framer is standing there asking what to do.
Unchecked change orders
Someone has to read the price, the scope, and the schedule impact. On most projects nobody does.
Ground and foundation surprises
Coastal lots bring surprises underground. Ground and foundation problems, hillside support, and drainage are where quiet money disappears, and all of it can be tested before you buy, not after.
Permitting and schedule slip
Every month of delay costs you interest, rent, and insurance, what I call carrying costs. The schedule is a budget line, not just a calendar.
Small additions add up
Small additions feel free one at a time. Together they move the budget by millions over a two-year build.
Before you sign
Five questions worth asking any builder.
- 1. Can I see the allowances in writing, line by line, with the cost of each item?
- 2. How do you price change orders, and who signs off on them?
- 3. What is your markup on change orders, and on materials?
- 4. How much contingency is in the contract, and who controls it?
- 5. What happens to the schedule and the price if permitting slips two months?
Get answers to those five in writing and you'll know more about your project than most owners learn in two years.
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I send the guide and the occasional note about building on the coast. Nothing else, and you can unsubscribe any time.
Talk to Luke
Want me to check your numbers against it?
Send me the bid or the plans and I'll tell you where I'd look first.
The OWNER'S RepCustom Home Advisory · San Diego