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How do you develop a realistic budget (the amount you can
afford to spend) before you even have a sketch, let alone a plan?
The following preliminaries will get you started. (For a
more in depth explanation, see our manuals.)
If you want to define a realistic budget- long before you
develop plans- you must put it firmly in the driver's seat. What does
this mean? Decide in advance how much you can afford. If you have a total
of ten thousand dollars to spend (or a hundred thousand), write that down
and make a commitment to yourself (and your spouse) you will spend no
more than this amount.
Next, tell those involved in your project your budget is
already set at no more than eight thousand (or eighty percent). When you
finally meet with an architect, you must state, "we have eight thousand
dollars in our budget." Keep twenty percent of your budget for the
unexpected. We call that a contingency fund. This gives you some spare
cash for surprises and (later) upgrades.
If you try the opposite approach: "We have to remodel
our kitchen and replace the tub in our master bathroom... can we do it
for eight thousand dollars?" The answer will always be no.
Why is that? If you say to someone, "Can you figure
out a way to do this for under eight thousand dollars?" you appeal
to their ingenuity. In effect, you throw them a challenge. Your question
stimulates their own creative abilities to achieve efficiency and economy.
But if you start with the project: "I want you to
remodel my kitchen and my master bathroom ..." Your unspoken emphasis
is on you. Your language is really about them doing something for you.
Without a word being said, priorities have been communicated. This project
is more about what I want than what it costs.
There's nothing wrong with this emphasis. For some, excellence
is far more important than price.
But in the realm of intangibles- of feelings and personal
values- an opportunity has been lost. And you, as the homeowner, have
made a statement.
Most of the time, that unspoken emphasis will prevail: project...
or budget. Look on these early conversations as ground rules. Whether
your discussions are with an architect or a contractor, make sure you
are clear on your priorities.
#1) Put your budget first.
#2) Set your budget at 80% .
#3) Enlist help with a challenge- not a command.
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Bear in mind, the best way to make that budget control
everything else is to start with the amount, not the project. Otherwise,
people will take a wild guess as to what your undefined verbal ideas are
going to cost. Ninety percent of the time, everyone underestimates!
Instead of hand wringing and hair pulling, you're going
to make that budget work by giving yourself more time to plan. More time
to research.
"But how do I find out whether the funds we have are
enough to do what we want?" If you are stuck here, ask friends and
neighbors if they know some reliable contractors they have worked with.
Then, when you finally get through to them on the phone, ask this question:
"Can I hire you as a consultant?" Don't ask them to "Check
out your remodel for a bid." That will come later, when you have
plans and details.
Most contractors are usually surprised by this question,
but will probably say yes. Ask them how much they charge per hour, then
arrange a date and time. You will find it much easier to bring contractors
to your home when you offer to pay them. This way you have no future obligations,
but they do.
And, not surprisingly, they will be more attentive and responsive
because your offer to pay is actually a way of honoring them. Instead
of the unspoken, I want to use your experience at no cost to me,
you have communicated respect. When people feel valuable, they usually
do their best to live up to that perception.
For probably fifty dollars, you will get one or two hours
of invaluable advice- without any obligation. And, when you finally get
to a point where you want bids, you will now have at least one eager and
responsive contractor who feels appreciated by you.
Make sure, as you enquire for contractors, that you talk
with someone who is qualified to do your sort of project. Additionally,
follow the checklist requirements we cover in our manual on selecting
contractors.
This process of discovery typically takes a month or so.
Don't rush. Before you have that contractor come over, make out a written
list of all the questions you have. Then, after introductions are over,
make that statement we talked about earlier: "Can you figure out
a way to do this project for eight thousand or less?" go over your
list items one by one. Make sure you take notes.
Once you feel confident your project is within the scope
of your available funds, you are ready to take the next step.
Copyright © C. S. McMinn 2003
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