New home construction is a risk by its very nature. Construction is a precarious business, especially in today’s market with supply chain issues. Even what seems like a small omission can crush a budget. For instance, forgetting to tell the builder that you want a toilet or a sink in a utility room when the foundation has already been laid and permits secured.
Part of our job is to identify and eliminate these possible risks before they ever happen. To that point, we have put together a risk-assessment checklist of sorts to identify areas where we have seen projects falter.
The design process is very sophisticated and while there are checks and balances along the way, human error still comes into play at times to throw a wrench into the system. If a design omission is overlooked, the longer it goes unnoticed, the bigger the risk to the project.
Regardless of how large or small the project is, if it does not have timely funding, the project is doomed. When the funds dry up, construction halts, causing problems between the various stakeholders. When this happens, litigation is sure to follow, an absolute nightmare for the new homeowner.
This is something that happens on almost every project for a wide variety of reasons. This could be from labor issues to supply chain issues to funding issues. Regardless, unless the schedule can be reworked, it ends up costing either the homeowner or the contractors money, something we do our best to avoid.
Erroneous Quantity Surveying
As the bidding process proceeds, this can be a significant problem. The type of contract you sign will dictate who is responsible for cost overruns on the project.
Price Commitments Not Being Honored
During the bidding process, subcontractors will provide estimates for the job. There will be times when they will try not to honor those estimates. We saw this happen quite over the last two years with rising supply chain costs, often resulting in a significantly higher ticket price to the home, literally sending homeowners into shock at the closing table. Again, be very careful about the type of contract you sign, as it will dictate whether the buyer or contractor is responsible for those additional costs.
Methods and Materials Problems
Not to beat a dead horse, but the supply chain issues over the last couple of years have made this a real problem. We have seen certain materials or products not available and substitutions need to be used or the project gets halted.
Weather and Damage
This is an outside job, which brings two significant challenges to the table. The first of these is the weather. For instance, an unsuspecting snowstorm or long periods of rain could delay a project by days, possibly weeks, or months. High winds, cold weather, etc., can all impact construction. Theft and vandalism are unfortunate realities in this business, especially early on in the project when the walls are still open.
As noted above, if we sign on as your construction project manager, we anticipate and eliminate these challenges. We are, in essence, a risk management tool for homeowners who do not have the time or desire to oversee their construction project. If you would like to learn more about our construction services, please click here. You can also call us at 888-402-4180 for more information.