For homeowners considering a remodel, it is first essential to prepare a preliminary budget. The purpose of creating a budget is to both understand and control costs. There are many resources available to help you with creating a budget, however, it's important to understand the nature of the beast; the hard and soft costs associated with your project and some examples:

Hard costs include the fundamental materials and labor involved in building. The  nuts and bolts structural work as well as work needed to improve the site per City or County codes. Below are some examples of the hard costs you will need to budget.

1) Building costs: Cost of construction as it relates to the structure

2) Site improvements: on site costs such as grading, sidewalks, drainage, etc.

3) Landscaping: most local juridictions require a landscape plan

4) Contingenies: This is an amount budgeted in a construction loan to pay unanticipated costs incurred during construction. The amount typically ranges from 5-10% of total cost for new construction and 10-20% for remodel work.

5) Change Orders: When changes to the scope of work are implemented upon agreement by the architect, homeowner and contractor or subcontractors. Change orders are common to most projects, and very common with large projects.A Change Order is work that is added to or deleted from the original scope of work of a contract, which alters the original contract amount or completion date.

 Common causes for change orders to be created are:

- The project's work was incorrectly estimated
- The customer or project team discovers obstacles or possible efficiencies that require them to deviate from the original plan
- The customer or project team are inefficient or incapable of completing their required deliverables within budget, and additional money, time, or resources must be added to the project
- During the course of the project, additional features or options are perceived and requested.


Soft Costs are slightly more flexible items including the costs associated with your design work, the finishes chosen, appliances,  and the like. These costs also include permits and fees, which can change, off-site improvements such as sidewalks & traffic lights, and equipment such as security systems, sound systems, etc.

 There is always a cost range which correlates with the  products and materials chose to work with. For exapmle, choosing Green building products or high end appliances will add to the cost of your project. Here on the Peninsula, a good cost range rule of thumb is anywhere from $200/square foot and up.

Knowing the hard costs and then budgeting for soft costs will help you understand the feasibilty of your ideas as well as allow you to identify your project's priorities, recognize trad-offs, and revise your estimates.