12 Hidden Costs That Could Arise with Your Remodeling Contractor

Are you gearing up for a home remodeling project but worried about unforeseen expenses draining your budget?  Without a clear understanding of potential hidden costs, you risk being surprised at cost fluctuation during your renovation journey.

For over 15 years in business, we've had direct conversations with homeowners who've shared their experiences of unexpected project expenses or hidden costs while collaborating with contractors. We understand the stress and uncertainty of budgeting for renovations. To help you along this journey, our team has put together this resource to assist you.

In this article, you'll gain valuable insights into 12 hidden costs that could arise when working with a remodeling contractor:

1. Permit Fees
2. Structural Modifications
3. Material Overages
4. Change Orders
5. Unforeseen Labor Costs
6. Temporary Living Expenses
7. Waste Removal and Disposal
8. Utility Upgrades
9. Design Consultation Fees
10. Cleaning and Restoration
11. Storage Fees
12. Homeowner Association (HOA) Fees

1. Permit Fees

Depending on the type of project you are taking on, obtaining permits from local authorities can be necessary. This ensures compliance with building codes.

These fees can vary based on the location and scope of the project. It's crucial to budget for permits upfront to avoid delays and potential fines.

If you are working with a general contractor or design-build firm, permitting fees will be included in their fixed price.

2. Structural Modifications During Construction

Discovering structural issues during the remodel, such as damaged walls or subflooring, can lead to extra costs. Reinforcing structures or addressing plumbing and electrical concerns may require additional funds. It's essential to have a contingency plan in place for unexpected structural changes.

You are more likely to experience this issue if:

• Your home was built over 20 years ago.
• Your home has experienced water damage.
• Your home was infested with pests.
• Your home has undergone previous renovations without permits, increasing the likelihood of hidden structural problems surfacing during remodeling.

3. Material Overages

Underestimating the amount of materials needed is common in remodeling projects. If you’re working with a general contractor or design-build firm, they will cover underestimated materials. However, if you’re managing the project yourself, you may have to cover extra materials.

We’ve seen this issue arise when: 

• Design changes are made
• Measurement discrepancies
• Damaged goods upon delivery

With most materials, we recommend ordering 10% above what you estimate is needed to account for potential overages.

4. Change Orders

The term change order refers to any adjustment made to your construction plans after the design phase is complete. Making changes, adjusting plans, or dealing with unexpected problems may take extra time and materials.

Clear communication with your contractor and thorough planning will help minimize change orders. However, even the best-laid plans may encounter unexpected challenges

5. Unforeseen Labor Costs

When you’re working with a general contractor or design-build firm, you should not experience increased labor costs without a change order.

However, if you’re working directly with subcontractors, you could experience increased costs in a few other circumstances: 

• Paying subcontractors extra hours (overtime fees).
• Hiring specialized workers to resolve unforeseen problems.
• Additional work is required due to changes in project scope.
• Delays in project timeline result in extended labor hours.
• Specialized skills or equipment are needed for unexpected tasks.
• Inflation or market changes affect labor rates.

6. Temporary Living Expenses

For larger remodeling projects, temporary living relocation may be necessary. At Custom Built, we understand the disruption remodeling can cause. While we offer personalized recommendations to each client, our general advice is this: if your only kitchen or bathroom will be disrupted, or if your home will be open for an extended period, we recommend finding a comfortable place to reside during the project.

Temporary living expenses can often catch homeowners off guard during a remodeling project. These expenses include costs for accommodations such as hotel stays or temporary rentals while your home is undergoing renovation. 

Factors such as project delays, unexpected structural issues, or health and safety concerns may necessitate temporary relocation, adding to the overall expenses of the remodel.

7. Waste Removal and Disposal

Proper disposal of construction debris is essential for maintaining a clean and safe work environment. Contractors might add fees for removing waste - especially with big projects or hazardous materials. Knowing these costs beforehand can avoid surprises later.

At Custom Built, similar to many other design-build firms, waste removal and disposal are included in your contract price.

8. Utility Upgrades

You might need to upgrade or move plumbing, electrical, or HVAC systems for the remodel. This happens often for major changes in homes built 20 years ago. Here are some frameworks that you can keep in mind:

Plumbing:

• Home built before 1950 with cast iron piping

Electrical:

• Knob & tube
• Power supply to panels could be too small, 100amp. Need to add more circuits. Because electrical requirements have increased, you will need more circuits.
• Fused vs breaker panel. Fused cannot be used.

HVAC:

• Replaced every 25 years. 
• Efficiency has massively increased. Even in the past 5-10 years.
• Old homes may have a boiler, no AC. Fan might need to be added. Mini splits, etc.

9. Design Consultation Fees

Some contractors charge for design consultations to develop remodeling plans. These fees may vary depending on the complexity of the project and the level of customization required.

10. Cleaning and Restoration

If you're not partnering with a general contractor or design-build firm (such as Custom Built),  cleaning and restoration to complete your space may entail additional costs. 

It’s wise to ask the contractor what tasks are typically covered, such as: clearing debris, cleaning surfaces, and conducting minor repairs. 

11. Storage Fees

You may incur storage fees if you need to store furniture or belongings temporarily during the remodel. Renting a storage unit or utilizing off-site storage facilities can add to the project costs. Thinking ahead about storage costs can prevent you from rushing or facing surprise charges later.

12. Homeowner Association (HOA) Fees

If you reside in communities governed by Homeowner Associations (HOAs), there may be extra fees or requirements for remodeling projects. HOAs may have strict guidelines about exterior modifications, architectural styles, or construction schedules. Understanding HOA rules and fees upfront can prevent conflicts and delays during the remodel.

Next Steps to Hiring Your Home Remodeling Contractor

You're not alone if you've been concerned about the potential hidden costs involved with your home remodeling project. Many homeowners embark on renovations without fully understanding the financial implications, leading to stress and budgetary strain.

Now that you've gained insights into the 12 hidden costs to expect from home remodeling contractors, you're better equipped to tackle your project with confidence.

At Custom Built, we've made it our mission to empower homeowners like you with the information and resources needed to navigate remodeling projects successfully. With over two decades of experience in the industry, we understand the challenges and complexities of home renovations and are here to support you every step of the way.

Ready to turn your remodeling dreams into reality? Our team would love to connect and  discuss your project. 

Now that you know more about the hidden costs to expect from home remodeling contractors,  let’s take a look at whether a design-build firm like Custom Built is right for you, how we will approach your project, and other ways to vet your remodeling partner options:

• Top 4 Differences Between a Design-Build Firm and a General Contractor - A comparison between design-build firms and general contractors that highlights the pros and cons that each remodeling company brings to the table.
• Dream, Design, and Build: Our Remodeling Process - This guide details how we at Custom Built will approach your remodeling project, including who you will work with and when to expect each crucial step of your renovation to occur.
• Top 8 Questions to Ask Before Hiring a Remodeling Contractor - A list of essential questions to ask your prospective remodeling contractor before hiring them for your project; with additional questions included in each section.